Replies to post #223633 on Fannie Mae-No Politics (FNMA)

[big-yank]

The conservatorship was done properly and was approved by FNMA's board of directors. How was it done was wrong? It was done by the book.

On the "greed" issue, the warrants were not taken out of greed. In fact, they have yet to even be even exercised. The warrants were the last way out for FNMA to survive as its world was imploding and a hugely unpopular taxpayer supported bailout was required.

I think "jumping in on the issue" is fine, and all, but there was scant negative rhetoric expressed at the time the conservatorship was established. Right? And I could reluctantly agree that "jumping in on the issue" when the controversial Amendment 3 was enacted has merit.

Where you and I totally disagree is you, somehow, feel people that knew about Amendment 3 and still chose to buy FNMA shares were some how robbed or their property seized. I say they took a risk, just like many investors take when they choose to invest in a bankrupt company like American Airlines, Kodak, General Motors or Pilgrims Pride. You win some. You lose some.

Where you and I do agree is that I have often stated that I think the legacy shareholders of record at the time Amendment 3 was enacted have a fair beef with a 100% sweep provision which could, I believe, be argued successfully in court. I think the shareholders probably are entitled to the 20.5% of FNMA that is not due the US Treasury, once sufficient reserves are set aside to offset possible future events like the last bailout.