Fannie Mae-No Politics (FNMA)

[DaJester]

"Given that the total stated value of the juniors is $33B and the market cap of the existing common is around $1.3B, yes that sounds about right"

Yes, existing common is very suppressed due to questionable if not completely illegal actions by FHFA and Treasury. If (and that's a big if) rectified, the common value will not be where it is today. Stated value of juniors, so not even a slight haircut eh? Sounds like wishful thinking.

"It's all in Calabria's book. Treasury doesn't want its equity stake to rank below any other investors"

I really could care less about what Treasury wants. Their current equity stake sits on top of everything already, so by that argument the recommendation should be that they should literally do nothing. Wait for the GSEs to hit their capital thresholds, and then resume the NWS. Who cares about JPS or common if you are the Treasury.

"Recall that they nearly went through with a preferred-to-common conversion already of both the seniors and the juniors."

Yah, how can I forget - you keep bringing it up as if it means the future is set in stone. I recall lots of things that almost happened. Like when I almost won the lottery. If I had just played my numbers they would have hit. I also recall a time when Bradford nearly had a correct prediction. Oh wait, now you know I'm lying...

"I think the P/E will struggle to hit double digits"

Agree. Out of the gate no way it will be anywhere near where it was pre-conservatorship let alone near S&P averages. I also think Treasury would struggle to sell off their common shares in any reasonable amount of time. The "sell 100B shares at $1" sounds easy because hey, it's just a buck... $100B easy-peasy right? Wrong. Where does the $100B come from? That's a large offering. In the meantime Treasury owns a majority stake? Taxpayers on the hook? Explicit guarantee? Those are not slam dunk selling points.