Freddie Mac-No Politics (FMCC)

[RDG013]

The common are likely to be heavily diluted to the tune of the govt getting an 80% stake. Keep in mind that this does not in fact wipe us out, nor does it mean that the 80% stake is immediate. In addition, if the bailout works, the GSE's become strong a viable again. Last time that was the case, the SP's ranged from the $30's to $60's. If you are hedging for a recovery, figure those prices in with the dilution of govt shares. IF you do this, you will see we have a olong way to climb from here, even if fully diluted.