FBR analyst Edward Mills, in a note on Tuesday, said the president's speech was likely to be "all but an endorsement of the Corker-Warner GSE reform proposal and would make any efforts at a recap of Fannie Mae and/or Freddie Mac even more unlikely."
Then again, with the Republicans in control of the House of Representatives, the president's support of the Corker-Warner bill could make it even more unlikely for the bill to be passed.
What gives hope to the junior preferred and common shareholders of Fannie and Freddie is that the companies keep booking tremendous profits. Institutional investors holding the shares are braced for a multiyear battle.
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