Fannie Mae Shareholders Optimistic About Recent Rulings

Fannie Mae and Freddie Mac stocks gained about 2.7% apiece in trading yesterday as shareholders interpreted a ruling for AIG’s Hank Greenberg as a sign that they were also more likely to win. But this ignores the fact that Greenberg wasn’t actually rewarded anything as well as a ruling from last week that undermines shareholders’ position.

For Fannie Mae shareholders, winning is only half the battle

In his ruling, Judge Thomas Wheeler explains that the he has to first determine whether the Federal Reserve Bank of New York had the legal authority to take the harsh measures that it did when bailing out American International Group, whether the terms of the deal constitute a taking under the...