Replies to post #436644 on Fannie Mae-No Politics (FNMA)

[kthomp19]

Scenario with revoking NWS retroactively

I completely agree with you here. The NWS must be gone and the senior preferreds declared paid off/extinguished (without having to be repaid again) in order for any reform to move forward. Your scenario with the senior preferred still outstanding in their full amount is not worth considering, in my opinion.

If pref shareholders benefit unfairly at the cost of common shareholders, then there will be more lawsuits from common shareholders.

But what is "unfair" about making a 200-300% return as Moelis envisions? No lawsuit will ever fly when there are negative damages.

Under Moelis plan, it requires $487.5B to be raised from markets.

Where are you getting this number? The end of page iii in the Moelis plan says:

Capital Build
The Blueprint envisions a robust capital build, up to a total of $155 to $180 billion of core capital, through a combination of retained earnings, existing shareholder participation (e.g., conversion and/or participation in a rights offering), and third-party primary equity raises.

With Moelis plan, current common shareholders will be reduced below 4%.

I understand this, and it is one reason I own junior preferreds. I fail to see why this means the Moelis plan won't be implemented.

Why would investors invest $487.5B fresh capital in companies managed by fraudulent FHFA conservatoship?

The conservatorship has to end for our shares (junior prefs and common) to have value so in that case your point is moot. Whether the conservatorship is (will have been) "fraudulent" doesn't matter one bit at that point.