Fannie Mae-No Politics (FNMA)

[LuLeVan]

"I don't know why some people are stuck on the SPS conversion being necessary to unwind anything..."

It is based, first, on the assumption that the government needs an incentive for recap/release. If only the warrants are exercised, the government will get about $80 billion (80% ownership). If the SPS (or LP, or LP - SPS) are converted to commons, the government will receive about $100 billion (99.5 % ownership).

Second, it is based on the assumption that the government will - once again - throw common shareholders under the bus for just additional $20 billion. And this assumption is entirely realistic in light of past anti-shareholder actions, from HERA to NWS.

(My calculations are based on the assumption that the market cap after recap/release will be $250 billion ($25 billion profit x PE 10) at IPO, and that $150 billion of that will be raised from subscribers to the new shares, leaving $100 billion for the government and legacy shareholders.)