Fannie Mae-No Politics (FNMA)

[kthomp19]

I didn't say it was a bankruptcy, I said when this is released it will be analogous to a BK re-org, and the gerrymandering to get this released will be analogous to a bankruptcy plan.

Actually, Mark Calabria said that conservatorship essentially is an administrative bankruptcy.

But the semantics don't really matter. You're right in that this is going to be resolved like a bankruptcy restructuring, no matter what it's actually called.

Since there is no opportunity to cash in with the status quo, the government will look for a way to reap further rewards. And the way to do that is with conversion to warrants, super warrants and commons.

Right. A conversion to commons is really the only reasonable way to cash out the seniors, and it is what would be needed to raise outside capital.

JPSs will likely be unaffected. And the reason why they will be unaffected is because it would bring about a new round of lawsuits.....just as converting the conservatorship to a receivership would do.

What do you think might be attempted against the juniors that would trigger a lawsuit? I am generally quite skeptical of any lawsuit threats I read about, but at least the juniors have specific contractual rights, that's the Lamberth case.