Fannie Mae-No Politics (FNMA)

[Louie_Louie]

How does a pref share liquidation or liquidation pref work when GSE's are deemed too big to fail? Pref's fail to see their lost cause. If GSE's are ever in trouble, bankruptcy just is never gonna happen, so pref's are basically just loaning money. They will never see a liquidation or bankruptcy of the GSE's... Definition from wikki:

in the U.S. at the federal level, in September 2008, the chief executive officers and board of directors of Fannie Mae and of Freddie Mac were dismissed. Then, the companies were placed into the conservatorship of the Federal Housing Finance Agency (FHFA) via the determination of its director James B. Lockhart III, with the support and financial backing of U.S. Treasury via Treasury secretary Hank Paulson's commitment to keep the corporations solvent.[8] The intervention leading to the conservatorship of these two entities has become the largest in government history, and was justified as necessary step to prevent the damage to the financial system that would have been caused by their failure. Entities like this are considered "too big to fail