Replies to post #722961 on Fannie Mae-No Politics (FNMA)

[Donotunderstand]

The argument - IMO IMO - for JPS (I own both and 2 months ago moved from 1:1 to 2:1 JPS) -- is not that JPS get rich

The argument is that common Will or MIGHT get so massively diluted that it is wise to own some JPS

If - If - GOV decides to have common equity pay the LP $ SP - and issue the WTS and go to the market for 80B new common --- that destroys common

If - If - GOV decides that LP (SP) is paid by prior payments and uses YEARS of future earnings to raise capital with an interim - say 10 year TREASURY back up guarantee (no SPO) - common can explode

So - IMO - there is upside to both - and right now I am not sure which is a higher multiple ---- but there is an ADDED risk to common from diulution that does not impact JPS

NOW if GOV force converts JPS to common ? but I do not think they can or will do that

[jog49]

"Will government do the right thing"

Every time I read such, it makes me laugh. The answer is only if forced or to save face. That's all the choices!