Marvin Gandall wrote:
But I think the strongest concerns may be coming from the holders of Fannie Mae bonds, shares, and mortgage-backed securities, worried about the safety and value of these in the wake of the company's questionable accounting practices. Since the explosion in derivatives and in the wake of Enron and its aftermath, reliable accounting (oxymoron?) has, as we know, become a major issue for big institutional investors like banks, mutual funds, and pension funds, worried about the complexity of these "structured" products and the ease with which they can be manipulated and moved off balance sheets. Fannie Mae is simply the latest corporation to come under investor scrutiny for its accounting practices, with the attention magnified because of its size and critical role in the financial system and housing market, and, additionally for conservatives, their residual antagonism stemming from its origins in the New Deal.
Yup. It's weird, though. During the boom, lots of people knew the accounting was funny, but no one cared. Then suddenly they cared. Now they're not caring again. Similar thing with FNM - some bearish sorts had been raising questions for years, but no one cared. Then suddenly everyone cares. Markets are so rational, aren't they?
Doug
