Fannie Mae-No Politics (FNMA)

[The Man With No Name]

I think both that Treasury cramming down all but $1B of the senior pref liquidation preference into common would push the per-share price to $0.10 or lower, and that the probability of this happening is at least 15% at this point. That alone makes the commons uninvestable to me, even if their upside is greater than I estimate ($4-7 or so).

You should note that both the takings cases and the constitutional/appointments clause cases, which comprise basically all the ones outstanding other than Lamberth, allow for the possibility that the plaintiffs win but Treasury gets to keep the seniors anyway, so the cramdown remains on the table even if all the cases are victories for the plaintiffs.

However structured, a cram down is a 99% certainty IMO. Either that or there will be no exit from conservatorship in our lifetimes.