Fannie Mae-No Politics (FNMA)

[bradford86]

days like today are sad/weird/unnerving

i'd like to see this come down:

https://stockcharts.com/h-sc/ui?s=fnmas:fnma

when it goes up, it makes me wonder if preferred are settling for less than par where they convert before the warrants are exercised.

that said.. if the eventual ratio ends up being closer to 2:1 like moelisv2 might suggest if backdivs/interest are ignored then now would be an absolutely fabulous time to sell preferred and buy common.

5.58:1 is the highest this ratio has ever been since i've been watching.

if the preferred settle for subpar, i'd expect this ratio to go over 10:1 though

so what might be happening is that the market is handicapping both scenarios..

if the eventual plan is moelis style, now appears to be a great time to start picking up common. interesting to see all this anxiety around the fhfa proposed capital rule comment period ending / end of elections

also.. the breadth of the preferred.. fnmas/fmckj/fnmat are participating in this but the rest of them seem to be lagging / not much

doesn't look like anyone is switching from fnma to fmcc or vice versa. looks more like a rotation into preferred or just panic selling or i'm not sure.

not sure what ackman's cost basis is/was. but i think he's underwater now.. wasn't it like $1.30?