Fannie Mae-No Politics (FNMA)

[contrarian bull]

We go in circles about this over and over. I'd love to hear you explain why the senior preferred stock, which is an equity, is not a liability on the balance sheet.

Of course senior pref doesn't count towards liabilities: it isn't a liability, it's equity.

Well - technically it's both.

It's right there under the heading "LIABILITIES AND EQUITY (DEFICIT)" and then under "LIABILITIES", then under "Fannie Mae stockholders’ equity (deficit)". Same for junior preferred.

When the draw was taken cash and senior preferred stock both increased by the amount of the draw, keeping the balance sheets balanced

Exactly! It appears on both sides of the balance sheet as the same amount, thus having zero effect on net worth.

It will be interesting to see the Q1 balance sheet when all this is put to paper.