Replies to post #605562 on Fannie Mae-No Politics (FNMA)

[mrfence]

Here's another SOLID POINT of interest for anyone contemplating their choice of owning shares of preferred debt or common ownership shares $FNMA~ $FMCC~ of the GSE entities themselves.

A shareholder of a company is related to the ownership interest[, that is, the ability to vote directly on the decisions of the management in the Annual Shareholders' Meetings and the appointment of the members of the Board Of Directors, who are tasked with the supervision of the management. A common stock, unlike the debt instruments Obligation, Bond, Note, MBS, etc, reflects the value of the enterprises because it has an economic claim over the entire quarterly profits after the distribution of the fixed dividend to the Preferred Stocks (Line item in the Income Statement: Profit/Loss Attributable To The Common Shareholders). Also, all the Equity ex-Preferred Stock value belongs to them (Retained Earnings account, Reserve for Guarantee Losses, etc)
The holders of JPS aren't FnF shareholders, but holders of "obligations with regard to Capital" (the Treasury's own words in the SPSPA) or non-convertible Capital Notes, recorded as Equity due to their Liquidation Right set forth in the specifications of the security outlined in their contract (Prospectus) with FnF, which makes them have "other ownership interest" in FnF (as outlined in the definition of Capital Distributions in the 1992 FHEFSSA. 12 U.S. Code §4502 (5)), that is, the ownership once FnF's status is Liquidation or Dissolution. A Conservatorship hasn't changed their status as private shareholder-owned corporations, operating business as usual. A Conservatorship has more to do with naming a Conservator to fix their operations and a Capital Restoration Plan.