Fannie Mae-No Politics (FNMA)

[kthomp19]

Ok, how about I try to simplify this. The probability is higher that FHFA and Treasury will claim something is legal when it isn't, rather than the inverse (which is what you are assigning a 75% probability).

75% is my estimate of the probability that Treasury will convert the seniors to commons, rather than write the seniors off. That's the important number to estimate when it comes to deciding whether or not to own the commons at any particular price point.

Your argument here only reinforces my point anyway. If it's more likely that Treasury will lie and say an action is legal when it in fact thinks that action is illegal, as opposed to the reverse, then the fact that Treasury stated that writing off the seniors is illegal means it is unlikely to be lying.

And you still haven't given a number. What is your estimate of the probability that Treasury will change its mind as to its opinion of the illegality of writing off the seniors?