Fannie Mae-No Politics (FNMA)

[contrarian bull]

have zero capital and "owe" $187.5B. Cancelling the senior preferreds means they would have zero capital and not "owe" anything. It doesn't suddenly cause $187.5B to appear in their bank accounts.

You guys are mis-reading the balance sheets.

Some of these entries are negative, some positive, some on the asset side, some on the liability side.

Bottom line - the Senior Preferred are currently showing as a liability. The NWS takes that into account and has left $187.5B in their net worth all along and to this day.

If that senior preferred liability is removed that asset is still there - giving them suddenly a positive net worth of $187.5B.

It's a little confusing with the double negatives in the balance sheet, but that's the net effect.

Some had asked where that $187.5 billion went - it has been sitting in their balance sheets all along. Of course they don't keep it in cash - they used it to buy mortgage securities and the like... but it's still there.