Fannie Mae-No Politics (FNMA)

[Latergater]

If Bright becomes director, as Maloni says, that spells almost certain death to common shares. A few highlights from that piece.

"Maloni says the prevailing GOP opinion in DC is to do away with the GSEs replacing them with something else."

"the plan with the most support is one that Bright has been pushing to largely substitute Ginnie Mae--moving into the conventional market, for Fannie and Freddie."

"If Bright were to head up the FHFA, he could still pump that proposal while strangling Fannie and Freddie with regulation."

It is all starting to make sense as to why Ackman opened a position of 21% of his GSE holdings in preferreds. His nomination would almost certainly send commons sub .75 while holders rotate to preferred.