Fannie Mae-No Politics (FNMA)

[The Man With No Name]

The key word is "IF". If they do, then they will have successfully stolen more than they already have. Investment involves risk. However, I think any new examples of FHFA engaging in contracts with Treasury that are clearly harmful to the entity under Conservatorship, and clearly not arm's length negotiations (breach of good faith), are less likely in the future than in the past.

Back to you. What if they don't dilute to oblivion?

Diluting commons to oblivion is helpful to the entity because it is the ONLY path out of Conservatorship within the next 20 years (assuming the portfolio doesn't outpace retained earnings with regards to the capital buffer requirements)

If they don't, this will flounder for pennies for decades. When it trades for 50 cents in the year 2040, it is the equivalent of about 15 cents in 2008.

Said another way, if 15 cents was your cost basis when the Conservatorship began, you will need a 50 cent return to break even. No one has a 15 cent cost basis.

More likely most common holders have a cost basis of around $1. If you had a buck/share in this since 2008, you will need $3-$3.5 to break even. I predict that will never happen.