Fannie Mae-No Politics (FNMA)

[Robert from yahoo bd]

But I don't think previous government misdeeds will prevent new investors from coming in, instead it will just lower the price they will pay. If the government offers a 500% return on investment would they dig into what happened to the last guys? 700%? 1000%? Everyone has their price.

It's hard to attract private capital willing to deal with an unreasonable governmental actor who has Nationalized the Shareholders capital and can see clearly in a short time frame just how abusive and coercive the governmental overreach and theft was.

Look at the $100B+ IN CASH SWEEPS TO THE TREASURY (in return for NOTHING to the capital in a 1st Loss Position equity Shareholders) in 2013 ALONE.

How did the federal government take SO MUCH CAPITAL AWAY FROM THESE INVESTORS? Because as Regulator FHFA under HERA can command the GSES to artificially inflate credit loan loss reserves and write down $50B DTA'S.

And THEN after equity Shareholders spent $100 million plus in Litigation, HAVE THE GOVERNMENT HIDE BEHIND EXECUTIVE PRIVILEGE AND NATIONAL SECURITY PRIVILEGES to avoid disclosure and have ZERO culpability for their actions to the existing common and jps Shareholders who could NEVER have imagined such behavior.

Just horrible behavior from our federal government to destroy these Public Mission/Private Capital enterprises.

That doesn't change the fact that converting the seniors makes more sense for Treasury than cancelling them. Why would Treasury leave any more money behind than is absolutely necessary? (Which is next to nothing.)

If the UST wants to cash out a 2nd time from the theft of shareholders wealth and wants the best possible price, it would likely sell off the warrants over subsequent time frames as the investor risks of potential future regulatory misdeeds and conservatorships and Nationalization retreats gradually, perhaps after certain milestones are reached. Isn't that what happened with AIG and weren't they allowed to repay the 'bail out' funds from the federal government?

So if the topic is Treasury maximizing its stake, the discussion starts and ends with a senior-to-common conversion.

Why not just turn on the Cash Sweep and take their profits forever than? Let me guess because another POTUS or this one has a special pet project to spend it on. Well that may run into a bunch of issues that you and I already talked about.

No claim will be able to undo the dilution anyway.

Really? You've already come up with every possible legal and constitutional claim and what federal agency overreach each one is claiming to invalidate? Can you publish that work?

Courts won't be able to take away shares that have already been issued to Treasury and sold to outside investors.

You misunderstood my question. Here's the question:

"What exactly would happen in the event the federal government attempts to implement the 'dilution solution' (i.e., dilute the existing common into oblivion) and a legitimate challenge to the abusive and coercive governmental overreach here is filed in a federal circuit court?"

If Litigants go to court asking for an injunction against the US's Dilution solution, wouldn't that slow down the planned 2nd steal of shareholders wealth?

What would be the impact on prospective investors who are shelling out Billions of dollars in fresh capital of the uncertainty of pending litigation?

I hope your response again isn't, "Hell if I know".

Why can't (or won't) Treasury convert the seniors to commons?

It's called a federal court injunction against a federal agency action. See WV v EPA, from late June 2022.

Occasionally Uncle Suggy losses in court even when it thinks it's PERFECTLY LEGAL IT COULD RUN INTO CONSTITUTIONAL SEPERATION OF POWERS ISSUES amongst other reasons.

The only answer I've heard so far is "lawsuits", which I believe can only result in damages equal to (or less than) the share price before the day of conversion, and in any case can't undo the dilution once it happens.

That's what INJUNCTIONS are for.

The NWS took shareholders by surprise

.

After-the-fact lawsuits against a senior-to-common conversion will be even harder to win.

So you see another public announcement about the dilution solution after it's already done? Might be a hard sell politically after 10 years of profitability, the nationalization of the GSES, and other coercive and abusive governmental overreach, to pick one investor class over the other. So you envision a 'secret sale' to one or more institutional investors and an announcement after the fact?