Replies to post #622886 on Fannie Mae-No Politics (FNMA)

[FFFacts]

The pref holders are way too confident imho

There is a correction coming and maybe it arrives in the Fall along with the recession - big risk conditions may not be right for admin action

On court side, Treasury looks like it wants to exhaust its court options - and who knows how SCOTUS rules?

I think risks are higher here than pref prices reflect and I think prices come down once it is clear Trump will lose and the senate too... and bad economic numbers start weighing...

Not sure I want back in here

In traditional corporate bk's preferreds can get wiped out in a prepackaged proceeding with the approval of bondholders. In this case I don't think it is possible or feasible. There are instances in which common can outperform preferred. It could also take a few years to fully recap, or it could be done near instantaneously depending upon the option that is chosen.

I do believe the macroeconomic is very uncertain, but how many of those actually unemployed long-term have a mortgage? Housing is getting hot in certain areas and that is not good. Forbearance is a good concept but Fannie and Freddie should be funded for this expense under the cares act. senate is definitely at risk but trump is really good at marketing, if he does lose he direct treasury to negotiate agreements with fhfa. The real question is why hasn't anything meaningful been done during the past 4 years with trump, treasury and fhfa despite all their talk.