Fannie Mae-No Politics (FNMA)

[JCRod2018]

Interesting views. Good comments.

Re # 1;
It is not related to #3

Re # 2;
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Re # 3;
Liquidation Preference, Warrants, etc., should be the standardized ones. No special adjustments to these two. Fannie and Freddie are special but the tools to fix them remain the same.

About the AIG example, its strike price was $45, its costs was twice the call option.


The warrants were distributed to shareholders of record, and the Treasury Department did not receive any of the warrants.
https://economictimes.indiatimes.com/news/international/aig-to-issue-warrants-as-part-of-govt-exit-plan/articleshow/7238010.cms?from=mdr

A higher strike price will compensate dilution. Final price after strike and dilution could be anywhere from $5 to "infinity". It is better for the Government to have a high price per share.

Re # 4;
You are right, it was James Lockhart, but he was the director of OFHEO.

Thanks for sharing Tim Howard article about toxic mortgages.


Re # 5;
Paydown of the Senior Preferred Liquidation Preference; Can only wish they will be considered paid.

Agree with you about the non-cash accounting entries and Tim Howard analysis; Now it doesn't matter.

Re # 6;
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Re # 7;
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Re # 8;
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Re # 9;
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