What Will Happen Next With Fannie, Freddie?

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Nov. 18 (Bloomberg) -- TIG Securitized Asset Fund Portfolio Manager Jeffrey Lewis discusses his investment ideas with Betty Liu on Bloomberg Television's "Money Moves." (Source: Bloomberg)

Into the jewels.

What is your big takeaway?

Others have been involved, you can go back a couple of years.

The preferred is a relatively straightforward set of circumstances and relatively straightforward argument as to where the value might be.

The introduction of acumen -- of ackman changes what is going on here.

Most people look at it as a way out of the money option.

It changes the way people are looking at this.

What we all have to remember is if there is a $30 billion cap for the common in these companies, the 24 billion of that will belong to the taxpayers through the want the federal government holds.

What he think ackman went in on the common?

The benchmark prefer one for fannie and one for friday.

Their training $.30 on the dollar.

You can triple your money.

The common can be five or even 10 times.

The proposal that bruce ergo it's is leading on, you say this is an interesting proposal -- bruce berkowitz is leaning on comedy citizens an interesting proposal.

There was a great headline, something to the effect of their homes crazy proposal is maybe not so crazy.

This is one topic that create consensus in washington.

There is an agreement that everybody hates fannie and freddie.

You want the government to have a smaller participation in the mortgage market.

They play their roles positively on the other side.

There is no question that the federal government accurately understood that the mortgage market and not have adequate capacity to take on all of the lending that needed to be done in the country at that time.

The decline in the capital base of the existing banks, there was no where to put the activity that was going to take place.

The only place to put it was in those entities.

Their balance sheet illumined dramatically because of the takeover and because of the change and the way they operated.

One of the points that they missed was that a lot of the costs that -- a lot of the assets that went into fannie and freddie went in post that change because of a policy.

On the fair home proposal, what is next year e the next big benchmark will be the government's response to all of the lawsuits.

They are going to have a motion to dismiss.

What we see in terms of arguments, with respect to why the common shareholders are not necessarily entitled to any of the cash that is being generated are mostly what i would call political and emotional arguments.

It is time now to see what the legal arguments are.

And for the common shareholders, what is next for them?

The common shareholders have a long road.

There is a tremendous amount of risk.

Anybody looking at either one is

This text has been automatically generated. It may not be 100% accurate.

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