Fannie Mae-No Politics (FNMA)

[The Man With No Name]

there are political reverberations that may force the government to compromise. These compromises could include assessing the SPS as "deemed paid" even though they are not debt.

Treasury says that's illegal. Treasury controls the release. It is far more likely that Treasury legally converts the SPS and lets the warrants expire. Lamberth means nothing.

If the government just exercises the warrants, it would still raise over $100 billion. The SPS conversion would raise only about $25 billion more - but could cause problems, such as subscribers to the new shares holding back on the IPO.

No problems with AIG. $25 billion goes a long way in politics.

I find it hard to believe that the government will haggle over $25 billion when two TBTF enterprises with total assets of over $7 trillion are to be re-listed.

They don't have to haggle, they are in total control. $7 trillion? Doesn't matter what the portfolio entails, what matters is the Newco Enterprise Value.