Fannie Mae-No Politics (FNMA)

[The Man With No Name]

Glen, I appreciate all the info you provide on the various platforms.

In regards to option of converting the senior preferred to common, what are your thoughts that Tim Howard mentions on his blog… “would truly nationalize Fannie and Freddie, and, with nearly 100 percent government ownership (compared with “just” 79.9 percent with the warrants), put their $7 trillion of assets on the federal balance sheet”.

Wouldn’t having $7 trillion of assets on the balance sheet make them think twice about converting the senior preferred shares?

Apparently Mr Howard is clueless when it comes to re-orgs. Treasury can assign (sell) a portion of their existing warrants to a third party (new investors), thus for book purposes, they keep their equity ownership at 79.9% or less while still diluting legacy shareholders up to 99.9% with a SPS to equity conversion.

This is simple stuff.