Replies to post #768020 on Fannie Mae-No Politics (FNMA)

[kthomp19]

Just because a solution was considered by Treasury and NOT executed does not make it more likely to be the correct solution in the future.

Yes it does. The views of government agencies as a whole, especially vitally important ones like Treasury, don't really change that much across administrations. Notice how Treasury (with the help of the DOJ) defended every NWS lawsuit to the hilt under every President's DOJ from 2013 to now, including Presidents from both parties.

Treasury told Calabria that they believe a senior pref writeoff is illegal, and that was under a Republican administration!

And just because something was executed with AIG does not obligate Treasury to replicate that agreement with the GSEs or any other situation in the future.

This is correct, but not nearly as relevant as you think. The AIG situation is a clear warning to current shareholders as to how Treasury thinks about its equity stakes.

I'll say it again for those in the back. Things change. Situations are unique. Plan accordingly.

This argument works far more against you than for you. There are many reasons to believe that FnF common shareholders will fare far worse than AIG common shareholders:

1) AIG's board of directors had a fiduciary duty to its shareholders and yet still approved Treasury's preferred-to-common conversion.
1b) The same happened with Citi.
2) FHFA's powers and authorities as conservator have removed the rights that AIG common shareholders enjoyed.
3) Treasury only took a 92% stake in AIG commons

By contrast, what reasons are there to believe that Treasury will treat FnF common shareholders better than they treated AIG common shareholders?