Replies to post #745885 on Fannie Mae-No Politics (FNMA)

[kthomp19]

Common sense is not that common.

Common nonsense, on the other hand, is extremely common. And certainly not preferred.

After 14 years, I have no reason to believe the government will become kind and charitable.

Back when the court cases looked like winners - most notably in September 2019 when the Fifth Circuit en banc panel said that the NWS was an APA violation - I could understand owning commons to play offense. If the government was really on the back foot then there was upside value.

Now that basically all the court cases are losers, and even the remaining ones are willing to accept a senior-to-common conversion as a remedy, playing offense makes no sense at all. The government won't be forced into any concessions. Defense is the name of the game now, and there might not be any of that anyway.

If it weren't for pesky margin requirements I would open up a long juniors/short common pair trade. But those requirements make the irrational common pops like we saw last week into existential threats, so I will just stick to being long the juniors and avoiding the common.