Fannie Mae-No Politics (FNMA)

[chessmaster315]

Your arguements are non sequitir, mostly.

First, your conclusion does not follow, and you make "unjustified" assumptions, for example:

3) Converting the juniors to commons adds $33B to CET1 capital, not $35B.

Did you miss that assumption? The "assumption" is that "juniors will be converted to commons".

Its an assumption primarily based on your own Preferred bias, not on any real indications that our government will "convert JPS to commons" to raise capital.

Its not clear that converting JPS to commons "would" raise capital, but instead take money out of your front pocket and place it in the back pocket.

But, to buy preferreds, you must "hope" there will be a favorable conversion, where preferreds are given a bucket of cash at common shareholders expense, that is, a "favorable conversion", not aa "conversion". If you wish to convert your preferreds to commons, you can do so now: Just sell your prefereds and buy commons. Simple. But, the "preferred conversion hypothesis" always assumes preferreds will get some sort of multiple conversion rate above market. There is no justification for this...

By rendering an "invalid asssumption", you make your conclusion non sequitir.

Its like making statemtents like:
1. The sun rises at about 7 AM tommorrow.
2. Banks pay a very low interest on savings accounts.
3. Since my lottery winnings could be converted to an annuity earning 300,000 per month, if the sun rises tommorrow on time, I will earn 300,000 per month.
Its non sequitir.