Replies to post #152316 on Fannie Mae-No Politics (FNMA)

[rosen62]

Very impressive music knowledge...

Question: does Ackman's suggestion that FNMA should adjust its business model to become like a REIT mean that FNMA could somehow remain in existence beyond the run-off time period (in a world where Berkowitz's offer was accepted)? Berkowitz's plan seems to preclude that possibility doesn't it? So can we surmise that Ackman thinks Berk's plan won't fly?

Ackman's idea of a REIT somewhat neutralizes a total and complete run-off as it involves getting the companies into a new line of business. A Berkowitz' offer acceptance may actually force the companies into REITs if anything is to survive. Under B's, common has little to no future so Ackman's complements B's offer in just this regard, as a way to escape the run-off. So your assumption is correct except that I do not see Ackman's as an alternative to B's in case of a rejection. Generally speaking, both plan's do not harmonize well from the little that has been published, but they could.