Fannie Mae Preferred S (FNMAS)

[Donotunderstand]

feral

if the GOV could have gotten away with it - without adding 5T to their books - the GOV would have put FNMA in receivership

that 99% likely would have resulted in common and preferred equity being wiped out 100%

the distinction here is there was no receivership action when it was EMERGENCY time and now receivership post fact is insane and likely illegal

if the GOV was debtor in possession in action but not name - what is the hedge fund - high risk - rate of return?

So figure 8% v 10% and figure any sweep above 8% under amendment 3 and you have the amount that would go to principal - likely about 60B of the 100B or so - very rough estimate

and as debtor in possession that is not unfair in anyway IMO
(unfair is the sweep !! ...unfair is congress talking about winding down a company 20% or more owned by private hands that are citizens etc)

I would love to get 100% of the company but I do not expect that and on the preferred side I suspect the GOV will put back some but not all of the dividend and try and buy back the preferreds at say 50-60% of face (a market like price for say a 3.5% preferred)