Fannie Mae-No Politics (FNMA)

[LuLeVan]

This is really stupid:

"The JPS are mispriced (way too cheap)," but not due to the reasons that you think, claiming that in a cramdown scenario the JPS are valued at par value. In that case, they are worthless with today's Net Worth of $118B, but $311B SPS outstanding.

As someone who is familiar with balance sheets, it should be clear to you that the SPS will disappear from the balance sheets as a result of the cramdown. So why are you still counting them at $311 billion after the cramdown?

Furthermore, you have overlooked the fact that - at least according to Mnuchin - SPS and JPS will be converted to commons together, in one go. So after the crawdown there will only be common stock. That means: There will be no more JPS at all which could become worthless.