Replies to post #508981 on Fannie Mae-No Politics (FNMA)

[kthomp19]

Why would anyone use current market cap as a basis of future share value???

Where did I do this?

The only place I used the current market cap was in determining how much the commons get diluted at the beginning of the senior-to-common conversion case. That calculation didn't involve the future share value at all, only the value of the current commons (current market cap) versus the value of the seniors ($193B in par value).

Current market cap is in no way indicative of future valuation of the GSE's after release.

Again, I never actually link those two things anywhere in my post. So this point is moot, regardless of whether it is correct.

[jog49]

Current share price and market cap are useful for only one thing and that is the same purpose as a light switch. The lights are either on or off. Current share price and market cap indicate to the viewer that Fannie is either in business (on) or out of business (off).
When Fannie becomes unencumbered, share price and market cap will become indicators …. right now, not at all.