It’s About Time

Reported by Reuters

Fannie, Freddie get federal grand jury subpoenas

NEW YORK (Reuters) – Fannie Mae and Freddie Mac, the U.S. mortgage finance giants that were taken over by the government this month, said on Monday they were subpoenaed for documents as part of a federal grand jury investigation into their accounting.

The U.S. Attorney’s office for the Southern District of New York subpoenaed the two on Friday for documents related to accounting, disclosure and corporate governance dating from January 1, 2007 to the present.

The Securities and Exchange Commission is also investigating these matters and directing the companies to preserve the documents, Fannie Mae (FNM.P: Quote, Profile, Research, Stock Buzz) and Freddie Mac (FRE.P: Quote, Profile, Research, Stock Buzz) said.

Both companies said they will cooperate.

Yusill Scribner, a spokeswoman for U.S. Attorney Michael Garcia in New York, declined to comment, citing the office’s policy not to confirm or deny the existence of investigations.

The SEC also had no comment on the Fannie, Freddie investigations.

The FBI said last week it was expanding its probe of possible corporate fraud related to the U.S. mortgage market collapse to include Fannie Mae, Freddie Mac, Lehman Brothers Holdings Inc (LEHMQ.PK: Quote, Profile, Research, Stock Buzz) and insurer American International Group (AIG.N: Quote, Profile, Research, Stock Buzz).

The allegations would deal with misstatements of assets, FBI Director Robert Mueller told Congress earlier this month.

Financial upheaval tied to the mortgage market meltdown has propelled the government toward a $700 billion financial rescue package.

With the broader stock markets down more than 3 percent, shares of Fannie Mae were up more than 6 percent at $2.11 and Freddie Mac’s shares were little changed at around $1.85.

(Reporting by Lynn Adler, additional reporting by Martha Graybow in New York, Rachelle Younglai and James Vicini in Washington)

Now, if execs at either Lehman or AIG get indicted, do you think there will be some fast talking about the role of the Fannie and Freddie execs? Think this will make the MSM?

Edit: Sister Toldjah has a related post which is well worth your time.

Surveying the Carnage

Well, the markets have recovered a little (Dow up 262 at the time of this post) from the failure of the bailout bill yesterday in Congress. The Wall Street Journal has an editorial here which is worth your time. Here’s the first few paragraphs.

“America has survived a feckless political class in the past, and it will again after this week. But Monday’s crash and burn of the Paulson plan on Capitol Hill reveals a Washington elite that has earned every bit of the disdain that Americans have for it. This crowd can’t even make sausage.

The 228-205 defeat reflects badly on all concerned, starting with the Democrats who run the House. The majority party is responsible for assembling a majority vote, and Speaker Nancy Pelosi failed in that fundamental task.

Her highly partisan speech on the floor — blaming “right-wing ideology of anything goes, no supervision, no discipline, no regulation” for the financial distress — is no excuse for Republicans to vote no. But it is indicative of the way she has governed for the past two years — like Tom DeLay without the charm. The cynics are saying Ms. Pelosi deliberately tanked the bill by giving 95 Democrats a pass, knowing failure would hurt John McCain, and given her track record we can see why people would believe it.” [...]

On the whole, I liked most of the bill for the way it injected liquidity into the system while providing certain protections to taxpayers in the form of being able to share on the upside. I blogged about it here, if you’re interested.

There was a lot I didn’t like. The first part was the name. This was not a bailout of “Wall Street Fat Cats” as morons politicos on both side of the aisle would have you believe. I’ve got news for you…..Wall Steet, or at least those firms that had value (not so fast there, Lehmann) are already back in business thanks to Warren Buffet, Bank of America and some sovereign wealth and/or foreign pensions funds.

The ultimate beneficiary of this would have been liquidity for local banks (in MKE, think Associated Bank or Guaranty Bank, maybe even M&I) some of which are rumored to have some severe liquidity problems. (See: Wachovia of all banks.)

I didn’t like some aspects of the bill. The bailout of pension funds, for example. Some allegedly smart people run those funds. You bought it, you own it. (This provision was inserted by Dems to help the unions…seems some fat cats are OK).

I didn’t like the fact that the bill did not address the Community Reinvestment Act, which is really at the heart of the problem. Underwriters were, in essence forced, to write mortgages for people who couldn’t afford them. Let the games begin.

I didn’t like the fact that the bill did not address the abuses and outright fraud at Fannie and Freddie. I guess if you’re a friend of Dodd, Pelosi, Obama, Frank, et.al. it’s OK to make as much as you want, even if your only talent is perpetrating, what is in essence, fraud.

In line with the above, I didn’t like the absence of a reformation of Fannie and Freddie.

Where do we go from here? Will there be a new bill? Not out of the House. It’s too deeply divided and ineptly led. Plus, with precious few exceptions, no one in The House understands economics. Maybe something will come out of the Senate. But I doubt it.

Boy, That Nancy Pelosi Really Knows How to Inspire People

From the supereb Doug Ross.

“How Much Damage Can an Assclown Do in One Minute?

“Note: I think “assclown” is the term Nancy Pelosi prefers. Anyhow, I’m thinking the answer is about $700 billion.

Oh, and I found the following headline in CNN’s dumpster: Pelosi’s uplifting speech unites Congress behind the Bailout.

The transcript of Pelosi’s speech — which blamed the mortgage meltdown on Bush, Rethuglicans, Cheney, Rove, Reagan, Sarah Palin, radio talk-show hosts, bible-wielding Pennsylvanians and Walker Texas Ranger — is something for the ages. It was as ill-timed and as dishonest a speech as has ever been given in the halls of Congress.

Pelosi and Reid make Benedict Arnold look like Nathan Hale.

Do you think Barney Frank regrets giving up that one minute of time to Madame Speaker? Because that’s all it took for Pelosi to torch a verbal agreement in a manner similar to Genghis Kahn’s rampage through the city of Balkh (which was destroyed it in the year 1221 and “has not fully recovered from the damage to this day”).

Best. House. Speaker. Ever.

Here’s the transcript. You can read between the lines. Literally.” [...]

Go on over and read the whole thing. It’s worth your time.

What is it They Always Say? Three Sources?

From Confederate Yankee
The Anchoress
Instapundit

A READER AT A MAJOR NEWSROOM EMAILS: “Off the record, every suspicion you have about MSM being in the tank for O is true. We have a team of 4 people going thru dumpsters in Alaska and 4 in arizona. Not a single one looking into Acorn, Ayers or Freddiemae. Editor refuses to publish anything that would jeopardize election for O, and betting you dollars to donuts same is true at NYT, others. People cheer when CNN or NBC run another Palin-mocking but raising any reasonable inquiry into obama is derided or flat out ignored. The fix is in, and its working.”

I asked permission to reprint without attribution and it was granted.

Why is this not surprising?