Fannie Mae (FNMA)

[kthomp19]

Assuming this is the case, would damages be assessed to each specific JPS series? Or would we all be bundled together? Should we be looking for junior preferred series with the largest % 1-day drop relative to current share price?

1) Yes
2) No
3) That's what I'm doing

Let's run through some numbers for shits and giggles:

FNMAT closed at $2.65 on August 16th, 2012, but closed at $1.275 on the 17th. So a difference of $1.375. FMCCK--albeit a $50 par series--went from $3.55 to $1.60, or a $1.95 drop. But let's consider illiquid series. FNMFO went from $2701 to $2,700--ONE DOLLAR, or a hundredth of a percent relative to today's share price.

Yes, the distribution would be very unequal. Look at FNMFM if you want a laugh.

As much as I'd like to see the other damage models assessed, share price drop doesn't seem like a nightmare for most JPS. In the FNMAT example above, you're looking at a 49% return based on today's share price. If we are allowed interest--I'm not sure if we are or not--then at 6% per year it's an 88% return from here. And we still have our shares to benefit from future litigation or recap.

Yup. $1.6B would be quite disappointing compared to the disallowed expectancy and restitution damage models, but it's a whole lot more than nothing.