Replies to post #44 on Fannie Mae Preferred S (FNMAS)

[mhill_fin]

Almost no one is talking about the future fate of the shareholders once the government is paid back, because no one believes the payback will occur.

We are not dependent on congress to get paid. The conservatorship was designed to be temporary and can end without congress doing a thing.

I think the talk about "letting" shareholders prosper is flawed. No one has to let us get paid on our contracts we have with Frannie. The preferred still currently trades on an open market. If the government or anyone strongly feels that future equity gains should not go to anyone else but the taxpayer, then they can go ahead and buy the stock. That's how the market works. It's free market ownership. It's pretty black and white. Either you own or you don't own. The government currently owns 85% of the common stock. the agreement has already been signed. That other 15%, plus the preferred's can be bought and owned by anyone else at will.

All of the above can change if congress passes an unconstitutional bill that changes things.

Anyone that is skittish about what ownership means and does not agree with the concepts above should not own the stock.

[woondedeagle]

Just don't see how F&F, both of which are steadily improving their balance sheets, rapidly paying down their debts while increasing dramatically their revenues, and nowhere near bankruptcy, can arbitrarily be dismantled. I think this is all noise designed to take up space while the market rights itself. Five years from now, or four, or three, F&F will be fine - and debt-free. Their share of the market will shrink to below 50%, and will no longer be too big to fail. And we few, we happy few, we band of brothers, will be very, very liquid. JMHO.

[44centsAKAchoccake]

They would exercise the warrants and start selling off common shares in the market while retaining control. They can't nuke the common or preferred shares, but they need to create a context where the shares they sell have value. They need to do that to make taxpayers whole.