Fannie Mae-No Politics (FNMA)

[JOoa0ky]

Bradford you can't think like that. If you think the Govt is going to MAXIMIZE their holdings, there is no way they would spare the JPS. If we're going to talk about capital stack, the govt is going to want to place themselves above the JUNIORs.

If they were to maximize their value it would go like this.
1. SPS convert to commons.
2. Convert JPS to commons.
3. Exercise warrants to dilute JPS.

In that scenario we're all F....D.....

i think i was overdue; i think the main change was reassessing the impact of the supreme court ruling.

the net worth sweep is not going to be put back in the bag.

then you look to the other lawsuits

1. takings in federal claims
2. breach of contract in lamberth
3. constitutional claims ---> trump memo

i think that these do not put the net worth sweep back in the bag. so i think the net worth sweep is here to stay. but so the government can equitize its position and then you have to deal with jps to get them out of the way and then you can raise capital.

so to answer your question, the supreme court abandoned the law, and so the net worth sweep has teeth, so to speak.. a writedown of spspa is just probably not going to happen when that can be another $10-15B for the government (which is what i see it being)