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Strategies & Market Trends : Value Investing

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To: Madharry who wrote (31947)	9/8/2008 10:49:18 PM
From: Madharry	Read Replies (1) of 78785

Im really surprised there hasnt been more discussion of the legal ramifications of this governmental arrangement regarding fnm and fre. I'm very confused that all of this can be done without shareholder approval. If I'm a preferred shareholder suddenly according to this arrangement I get no dividend for the forseeable future and the government a new lender gets a priority preferred shares that apparently yield 10%, yet I get no say to vote yeah or nay on this proposal. not only that but I believe virtually all of the preferred shares are non cumulative so once the dividend is not paid for a given year its lost. Seems like more of an expropriation than a conservation to me. any attys want to weigh in on this? This could be the death of the preferred share issuance. I cant see how anyone would buy a preferred non cumulative share ever again. If im a serious preferred share owner of fannie mae I would much rather have seen the company sold. at least I wouldnt be wiped out this way. did the board try to sell the company, but was not successful? I will be surprised if this goes through without any legal battles.

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