Fannie Mae-No Politics (FNMA)

[Robert from yahoo bd]

One point I have made recently, after looking at the numbers,

I think Dick Bove recently commented on the veracity of the numbers on the books.

Something to the effect that they were created as a fiction to cover the governments questionable 13+ year conservatorship.

This may be the first time in American business were a 'conservator' has tried to take 100% of a Corporations profits for nothing in return and Dick Bove seemed to think some of these 10k and 10q numbers may be misleading.

A large capital raise will be required whether it happens now or in 5 years

What if these multi billion dollar lawsuits last more than 5 years? After the S&L crisis, the government, as here, fought tooth and nail throughout the protracted litigation.

Right now it would be $115B if the requirement is lowered to 2.5% (from the current 3%)

Is the 2.5% capital mandated in HERA CET1 Capital? I'm sure if the federal government can pull off the biggest heist from private corporations in US history they will be able to figure out how to release them with less than $115B.

In addition, Treasury has no incentive to cancel both the seniors and the warrants.

They do if they want to get out of the mortgage banking business (of course we haven't seen the outcome of any full blown trials yet.)

Put bluntly, the numbers tell me that dilution is the only solution.

I TOTALLY DISAGREE!

I think at this point we can agree to disagree! You have stated your opinions and I have stated mine. We both could be wrong and no one really knows how if ever this ends!

If I think that massive dilution is inevitable and that the juniors will outperform the commons from any ratio I have seen in the last few years, why would I have a reason to own the commons?

Does that mean that you backing away from the instant recap and bankruptcy arguments?

I don't think the dilution solution will happen, Why? I've already been over this with you over and over and over again.

You are free to do whatever you want but I am just pointing out that the rigid stance on your thinking does have some possible holes, that's all.

Both common and jps are priced so low, we should both do well. GLTU!