Fannie Mae-No Politics (FNMA)

[Louie_Louie]

Yank, if I can dig out my post....I pretty much said this same thing months ago (3, 4 or 5).
Back then pref's were more on the liquidation band wagon still.
I pointed out: commons will stay commons, no special treatment, and likewise for prefs. I also pointed out commons had stock price growth potential while pref's would have to wait for a capitalization goal to be met before a dividend coupon payment is made . I predicted 2 to 3 years. I stand by that still. Pref shares will lose in price the longer the dividend is turned off, as you said, and I agree. It will be at that point that the GSE'S start to buy back the pref's and probably close them out, especially the high interest ones.
There is a method to the government and financial advisors madness. Pref's are like the picture of the monkeys with hands over eyes, mouth and ears, all the while saying LALALALALALALALA