Replies to post #714091 on Fannie Mae-No Politics (FNMA)

[JOoa0ky]

They indeed do list that as a possibility but the general consensus is that, that option is off the table because it does not maximize the benefit for the regime.

I mean if we just run through some scenarios of what would benefit the govt the most to what benefits them the least... it would go as such in descending order:

1) Senior conversion w/ warrants execution
2) Senior cancellation w/ warrants execution
3) Senior cancellation w/ warrants cancellation

It makes the most sense for you to maximize whatever position you are in. The govt is in the position of holding seniors and warrants... why would they choose to leave money on the table?


I did not make my decision based on if I think JPS will do better or commons will. I made a decision based on what I think the govt will choose.

It is absolute insanity to choose a position first such as commons and then go writing off and supporting what outcomes will maximize commons position.

Yes very viable and a true possibility first paragraph quote from your link

“In other scenarios, the GSEs would not be able to raise enough to
meet their capital requirements. In those cases, their regulator and the Treasury would need to explore other plans, such as putting the GSEs in receivership (which would involve liquidating their assets or transferring the assets to other entities).”