- “It’s hard to find any reasonable outcome that’s really terrible for the preferreds, given what I perceive to be the value of the business that’s already there," says portfolio manager Jeffrey Lewis, an owner of the shares. Investors in the common stock, however, are making a bet Fannie Mae (FNMA +12.4%) and Freddie Mac (FMCC +13.4%) will be allowed to become dominating private companies again and keep their profits.
- It's up to the courts to decide how investors will be treated, says Sen. Mike Crapo, who co-wrote the bill to wind the GSEs down. "We are not necessarily going to dictate the outcome."
- As for whether a bill actually becomes law anytime soon, former Senate banking panel aide Mark Calabria gives it maybe a 10% chance of getting to the president's desk this year. The dim prospects look to be giving a boost to the common shares today.