Fannie Mae Preferred S (FNMAS)

[rosen62]

which cannot happen while the companies are profitable

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I think that depends on either a liquidity issue or an insolvency issue, not earnings. Right now, companies are solvent and liquid due to Treasury's funding commitment. It has not been canceled. But if it is canceled the companies have little to no net worth to rely upon and would be technically illiquid. In fact, Paulson called the commitment the "ultimate liquidity backstop".