Fannie Mae-No Politics (FNMA)

[ReadyToRumble]

Quote:
"The shares might not increase in price. What you're missing is that if Treasury is ordered to pay FnF $124B, they keep the seniors fully intact. That means they get 10% cash dividends on $192B of liquidation preference forever."

Feel free to quote this:
Your statement is absolutely without merit.
Sticking with the thought that the senior preferred will remain intact, that a 10% dividend remains in place, or even the premise of the warrants being exercised is complete bunk(I know, you didn't mention them)... if indeed the courts are able to make the government pay back $124B.
I'll be the first to admit that the Treasury doesn't even have that kind of coin to "give back." And even if they do, they'll likely maintain a Kung Fu grip on that $$. Perhaps even come up with a settlement that will include wiping out the dividend, SP, and warrants in return for having to payback less $$.

Either way, your conviction that the dividend will exist in perpetuity is quite ridiculous.