Fannie Mae-No Politics (FNMA)

[The Man With No Name]

So now you admit that it is possible for senior securities to get a haircut while commons still have some value.

By the way it is NOT federal law. They senior holders don't want to go through the hassle of litigation and formal processes.

It IS federal law. If you actually had any experience in bankruptcy re-orgs (which you apparently don't even though you say you do), then you'd understand the Absolute Priority Rule.

Haircuts are only by agreement. Senior holders sometime offer a few pennies because it saves time and thus, legal fees. It's cheaper to pay the bribe than lawyers.

But as you all know, this is a conservatorship, not a bankruptcy. The Government, who is SENIOR to you, does not have to give you squat if the Newco Enterprise Value doesn't give any value to current shareholders.