Fannie Mae-No Politics (FNMA)

[LuLeVan]

5. It is your opinion that ... Mr. Market is rational when it comes to the JPS but Mr. Market is wildly irrational when it comes to the current price of Common?

No. I think Mr. Market is wrong about both the JPS and the commons. Commons are still too expensive even at current prices due to the high dilution risk, while the JPS are priced irrationally low given the fact that they will reach near par value once the GSEs are released.