Replies to post #510709 on Fannie Mae-No Politics (FNMA)

[kthomp19]

We know who holds the cards and the veto power.

Exactly. In order, that list is:

1) Treasury
2) FHFA
3) New share buyers (who will recap the companies and therefore have bargaining power)
4) Junior pref litigants (whose cases must be settled before the recap and release can happen)

There are pretty big gaps in power between each of those tiers. By far the most important one to pay attention to is Treasury. They hold the seniors and the warrants, and have no incentive to give either of those up for nothing.