Fannie Mae Preferred S (FNMAS)

[Joe Stocks]

Preferreds are going to be at redemption value, and commons will be 20-30 bucks in due time.

You were not real clear on what you think I am wrong about?? The above backs up what I am thinking about the common versus preferreds. You did see where I said I am long common and have been adding? Where is the Fnf bashing? Being cautionary on FnF stories is not bashing. There are several issues that are not exactly clear the FT story.

There is a difference between "their' preferred and "the" preferreds in general. Saying "they" will underwrite a $17 bil rights offering makes me wonder what they want in return. Obviously in their self interest they would try to maximize the value of their investment in "their" preferreds. Knowing hedge funds I don't think they will be as sympathetic to our shares as theirs. This deal looks like a spin-off buy-out proposal from private equity to me. I don't think it is so clear to assume that just because one owns preferred shares that they are a party to that private equity group proposal. Also the conversion to common is not real clear. But, we do know the new entity will have equity ownership with common shares so mu thinking is that they are saying they will be converting "their" shares for new common shares in the new enterprise.