Replies to post #697 on Fannie Mae Preferred S (FNMAS)

[44centsAKAchoccake]

If taxpayers come out fine so will we. I don't follow the commons.

[Joe Stocks]

So you are saying that $190 billion was infused but
1. $190 billion will be collected in profit sweep
2. Another x amount collected from selling senior preferred
3. Another x amount collected from converting and selling warrants

What I am saying is that right now the government still holds senior preferreds with a face value nearly $190. Not one dollar paid to them so far has been anything other than a dividend payment.

2. The Treasury is now saying that instead of paying a dividend we are to turn over all profits. That could be more or less than what 10% would have been. IMO, the treasury looks at these payments as income for the use of the taxpayers funds. In reality they could sell the senior preferreds and adjust the terms. They could say that the senior preferreds cover the value of the company and take the whole thing, and sell it to new shareholders. There is nothing that says what we paid so far is nothing more than a dividend.

3. The government owns enough warrants that if exercised they would own 79% of the company. That is in addition to the senior preferred shares. The warrants expire in 20 years. They could sell them and keep those funds too.

Why do you think the $50 preferreds are selling for 3 cents on the dollar? Because most don't see them ever having any value. If we do receive something that value is going to be hard fought. The government knows they have us by the balls. At this point anything the that is thrown our way be it common or preferred may be considered a gift by the media. AIG, C, GMAC and others had an exit policy. FnF doesn't have one. I think the reason why everything sold off on Aug 17th is because once we saw profits, everyone was hoping for a plan that would see the government exiting. That did not happen and the govt decided they were going to take more, including anyway for our company to accumulate more capital.

IMO, the government has majorly abused their powers. We as shareholders are dependent on the favorable whims of the executive branch's authority. Why does anyone think I have been jumping up and down saying we need a shareholders association to get a voice in this matter? Heck, I don't think I have seen one word from FHFA or the mgmt of Fannie or freddie where they addressed the shareholders. Anything that has come out of them has replaced the term shareholders with 'taxpayers'. I have not even seen one party that may be a large shareholder say a peep about shareholder rights.

We as shareholders are in a very difficult position. I really do think the current administration believes that FnF are now owned by the Federal government and that it is a mere technicality that can be eventually remedied to eliminate the common and junior preferred shareholders. I am hoping tat once we pay over the govt an equal amount of what has been issued in preferred shares that the then current administration will start to consider some fairness for us.