Fannie Mae Preferred S (FNMAS)

[HUDDUH]

"Because now that FnF are profitable and have net asset value, the government can't simply shut them down without addressing our shares. It could have before, but it's too late now"

Not true. Over time they could wind FnF down to nearly nothing. Then sell the assets. The govt gets the first $190 bil worth through their higher ranked senior preferred shares. Only after they are fully satisfied would then the junior preferreds get anything.

Such a scenario would be akin to Zuckerberg using his majority position in FB equity to transfer all the company's assets to a new entity - let's call it Zuckerface - and leaving FB's shareholders with squat. Now, a scenario like that happens when an entity is no longer a going concern and those assets are at risk, and it is deemed a just manner to protect any remaining value, but it has never happened to a going concern of no threat to its bondholders.

If the Treasury wants to shut FnF down, fine, but you will reimburse us fully for our investment first.

"And if by chance they pulled rank with their seniors - but really, why would they?"

Why would they? Because the US treasury is ultimately running the show and wants whatever is in the best interest of the taxpayers. No US Treasury secretary would ever think of writing something off like the senior preferreds if assets are available to satisfy them.

The Treasury is not running the show, HUD and housing policy is. The Treasury's role is more like a bank, and they own the right to be reimbursed for their loan in a manner fair to both parties.

Who would be the biggest hero in Washington? The guy that saves FnF, or the one that sticks a wooden stake through FnF's heart?

This statement and others like it, made often by you, is as bizarre as your manipulatin MM's conspiracist theories. No one cares, and when I say that I don't mean no one here cares, I mean no one in Washington does. It's silly.

"I agree with others that the sweep amendment was the best thing that could have happened to FnF. Since I believe the Treasury just wants their money back - and why not? isn't this consistent with how they exited other companies they recapitalized?"

Actually the Treasury is quite proud of the "profits" they have made on tarp. Here again, the treasury just doesn't want their money back. If FnF has used taxpayer funds for 4.5 years now, and could go another 4.5 years, the taxpayers through their elected officials will demand something for the use of the money. I don't think they are going to be interested in the warrants as payment if there is relatively no equity. Keep in mind that amendment also calls for FnF to reduce the shareholder equity down to zero. Don't you wonder why the treasury demanded that?

The Treasury is proud that its pundits were wrong about tax payers losing trillions on TARP, but except for a few notable exceptions (BAC, AIG, one or two others), it has only demanded a full return on funds lent. See here

"Two, some entity will exist to pool the crap JPM wouldn't touch with a ten foot pole"

That would be PennyMac(PMT). I own some. Nice dividend. There are others out there that buy the garbage loans.

Hey! A REIT with $45mm on hand! LOL!

The world's Central banks are simply not going to buy our repackaged shit which is only semi-insured by our government.

The government has a choice, either it maintains an explicit guarantee on FnF purchased mortgages, allowing for a robust secondary market and liquidity for new loans, or new loans fall of a cliff and, with them, homes values. Period.

And everything else we're reading of? All that is just politicians blowing smoke up our asses.