Fannie Mae-No Politics (FNMA)

[Potty]

Kthomp, I reread your earlier message and your inferences about Calabria's preferences were bang-on. Taking "bank-like" requirements, following Basel, to focus on CET1 leads us to the focus on common. Converting JPS to common immediately increases the CET1 by 33billion -- and hence lessens the new to issue new common by 33 billion in order to meet the all important CET1 target.

I think this alone suggest a conversion.

I agree about the mindset of new investors re existing JPS.

We should also remember that even the FHFA director, and Secretary of the Treasury, lack the power to FORCE a conversion since the the JPS contracts fix when conversion can take place. So any such conversion has to be sweet enough for 2/3's of the holders of each class to take the conversion. (Maybe in concert with the unappetizing nature of holding unconverted legacy JPS...).

Thank you for sharing your past, and present, insights. I continue to learn from them. I bought back into the prefs last week through FNMFO. Now I am thinking I may buy more of the other issues, best, Potty