Fannie Mae Preferred S (FNMAS)

[rosen62]

Four, there is a reason why he is not backing out the $33.5b

He uses this amount to argue that the Tsy and Congress have in mind an everlasting appropriation of earnings.

If both Congress and Tsy could expropriate earning for reasons other than crediting taxpayers (like the 33.5) but magically net them against taxpayers, then there would be no conflict. He is actually saying "because Congress has done that, FF cannot do this and taxpayers lose". According to his argument, the 33.5b went into a black hole. Money lost. Cannot be netted. This is the essence of his argument.

His article is very well written. It is logic and precise and has the correct figures for net investment. His article deals with a solution for something we have feared: the Sr. preferred debt. He handles that by conversion to equity so those preferreds need no redemption. Just as part of equity (together with warrants) they could be maximized for a profit.