Replies to post #14139 on Fannie Mae Preferred S (FNMAS)

[JosephS]

Sounds like you are saying to sell the preferreds.... If you don't like the preferreds, the commons must look like complete compost!

No worries, though. Some preferred holders understand that they are higher in the capital structure than the common(aka Ackman) some think that the common and preferred stock will both benefit from the constitution. some think that the constitution will be overrun again....

Dividends in arrears are also a possibility given that it is only 2 billion per year. If 185 billion in divvies can be paid in something like 12-18 months, there might be room for a measley 2 bil.

not a recco to buy or sell.

[rosen62]

excess capital?

What do you mean? Dividends come out of profits. They are a portion of the earnings passed unto shareholders. It has nothing to do with capital or excess capital. Plus, how do you know what the board of directors may decide once/if c-ship ends and the companies are returned to shareholders? Who knows what threshold must be reached before they ok a distribution? Dividends are decided upon. And what is in the mix of that decision nobody knows.

[rosen62]

And I don't believe c-ship is the critical issue for our dividends.

The real issue is Treasury's funding commitment that is keeping the companies afloat as they don't have real capital and are being denied recapitalization. It is this funding commitment that needs to end. Right now this funding commitment takes the place of *their* capital. Declaring it "no more" will signal the possibility of recap.

1. Taxpayers need to be declared as paid off.
2. Funding commitment finished.
3. Reversing yearly wind down of networth.

All this can happen while in c-ship. And #2 will open the doors for the companies to rebuild their own capital.