Replies to post #660699 on Fannie Mae-No Politics (FNMA)

[montecristo]

This will get litigated for decades until SCOTUS releases them from the claws of the government.

[Louie_Louie]

Soooo, how many law suits are going to be issued due to this new revised bullshyt? Lol
Watch, it's coming.

[kthomp19]

By the time F&F are ready to be released the accumulated liquidation preference will total nearly $500 billion.

Not even close. If FnF do the full $70B common raises and offer the juniors a full conversion to commons, Freddie could exit immediately and Fannie would need 3 years of retained earnings.

The liquidation preference would "only" be around $250B at that point, and 10% of that still eats up all earnings. However, the seniors only get a dividend when FnF hit full capitalization, which is $420B more in core capital than they have now. That would take decades to achieve with earnings alone, so while the seniors might eventually hit $500B in liquidation preference, FnF would have exited conservatorship long before.

They don’t make that much money so they can NEVER exit conservancy.

I don't understand; you said this would happen when they are ready to be released, meaning they would already be out.

The other good news is that this constitutes a new taking, and the court cases can start all over again.

I completely disagree. There is no taking here, and the existing court cases have nothing to do with this agreement. New lawsuits would need to be filed if this agreement were to be challenged. Do you know of anyone who plans to do so?