Fannie Mae Preferred S (FNMAS)

[JosephS]

The only thing they could do is sell the warrants. But.... Why sell the cow when you get all the milk(and by extension butter, cheese) for free?(for now, until resolved in court)

Makes no sense for them to exercise. It is a lose/lose for them(in their eyes right now). They lose the sweep(the sweep would have to be abandoned for), they have to take the debt onto the gov't balance sheet.

They also can't sell the warrants without them having value(possible future divvies)

Ackman understands that there is no mortgage market w/o a gov't implicit or explicit guarantee. There hasn't been since 1938. Back in the depression I think you had to put something like 50% down and pay it off within 7-10 years.

If we go to something like that, my 130,000 house is worth 40,000-70,000. Not that I care about that, but everyone would freak.

Any changes could be catastrophic. They know it damn well.

They figure, "why not take our chances in court?"

JMHO on all this stuff.