Replies to post #608578 on Fannie Mae-No Politics (FNMA)

[Guido2]

Great post! If I may add, how long would it take (at the right time) to buy back/redeem the preferred when they were able to raise over $60 billion, without any fanfare, in such a short time?

[trunkmonk]

P shares are what’s in the way of resolve. Don’t let anyone tell u different. They are the reason for greed statements, anyone talking greedy commons IS a P and wants to screw commons to inflate Ps, which are useless in this process

[chessmaster315]

How come there is no talk of converting commons to preferreds??

Ans: Nobody wants preferreds. Preferreds are hoping to convert to common, but not the other way around.

You dont trade in a new car for an old clunker, unless you are in dire financial straits.
Instead, you trade your old junker for a new car.

You can convert, but nobody is converting commons to preferreds. I already converted my preferreds to common, you can too. Just push "sell" to the preferreds and "buy" to commons.

[camaro4me]

Do you have a link for the Treasury Departmen Release Plan? Thank you.

From Treasury Dept release plan for GSE's:

The guiding principle for ending the conservatorships should be that each GSE should remain in
conservatorship until FHFA determines that that particular GSE can operate safely and soundly
and without posing an undue systemic risk. The specific preconditions for FHFA considering a
particular GSE’s exit from conservatorship should include, at a minimum, that:
? FHFA has prescribed regulatory capital requirements for both GSEs;
? FHFA has approved the GSE’s capital restoration plan, and the GSE has retained or
raised sufficient capital and other loss-absorbing capacity to operate in a safe and sound
manner;

Notice to prefs, it does not say that fhfa IS RESPONSIBLE to undertake raising capital, it does not say to do a pref conversion, it does not say to do a reverse split.

You gotta wonder if pref shares are even necessary at this point in the GSE's business since they ARE too big to fail and the government has proved this by forced conservatorship and said taxpayer bail out (which we all know was unnecessary). My point being...if government is going to say too big or economically important to fail, then why have pref class share that only counts on a liquidation that will never happen. Basically pref's are loaning the companies their money with no say so and no guarantee of coupon payment since the companies can postpone that indefinitely until healthy.