Fannie Mae-No Politics (FNMA)

[LuLeVan]

Preferreds give up... the right to vote

In conservatorship shareholders have almost no rights at all, commons and JPS alike. The "fate" of FnF is solely determined by agreements between FHFA/Calabria and treasury/Yellen.

Preferreds are selling at a premium vs commons, a premium many feel is not justified.

LOL. Is this your conclusion because commons trade around $2 while most JPS trade around $6? I agree that the number 6 is greater than the number 2.

One could argue that JPS trade at 20% of real (par) value ($25), while commons trade at 1% of real value - IF you assume (like many here) that the commons' real value is $200. However, in more realistic calculations the commons (after warrants execution and cap raise) will have a value of just $5. Based on that, they trade at 40% - which is a premium to the 22% of the JPS. (That's why I think with JPS you get more bang for the buck.)

Preferreds [are] "hybrid" between bonds and stocks

Correct. That's why comparing JPS to commons is like comparing apples to bananas.