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Thursday, August 24, 2006

Free Pass: DOJ drops Fannie Mae charges

How surprising!

This morning at CNBC.com, Reuters news services is reporting that the Department of Justice has dropped charges against Fannie Mae and has concluded their investigation. Fannie Mae was "fined" $400 million.

"The Justice Department probably decided that there was little to be gained by bringing charges against the company because that would only punish shareholders, who have been punished enough," said Josh Rosner, a housing analyst with Graham Fisher & Co. in New York. "But that does not mean that former executives are not being scrutinized."
My last post a couple weeks ago about this scandal... I recall thinking and suspecting that some very very high level talks would take place behind closed doors. Seems like my hunch had some merit.

Fannie Mae gets a pass. Unbelievable. Franklin Raines and all his former Fannie Mae executives under him—do you really think this guy will get prosecuted? Time will tell, but when this guy is connected to Washington the way he is, it's going to be difficult.

8 comments:

Eleua said...

Amazing! Had FD Raines been Ken Lay, he would be in the slammer.

This is a financial grenade that will be measured in MEGATONS.

I think this shows the government is in a full panic over the housing bubble. They will do anything to delay judgment day - all while the financial imbalance piles up.

Eleua said...

So, Fannie misplaces $9B and they pay $400M?

WTF?

So, you get to keep $43 of every $45 you steal? Is that how it works?

Can I underreport my IRS income and get to pay 4 cents on the dollar, and avoid Federal Pound-me-in-the-ass prison and sharing a jail cell with Richard Hatch?

Anonymous said...

I have been watching the history channel on the Roman Empire.

I get the feeling that future generations will be studying our downfall.

The eyes of truth are always upon you.

Crashcadia

Lake Hills Renter said...

History Channel rocks if you like ancient/medieval history. Some good stuff on this "ancient week". I highly recommend the HBO series "Rome" too.

Anonymous said...

Time to bring out the bulldog: Eliot Spitzer.

cosmos said...

It's outrageous. Why should FNM shareholders be protected more than any others? Bush & friends are probably holding a bush-el load of shares. But "they" also can't risk removing the smoke and mirrors they are using to keep the illusion going.

Anonymous said...

"Why should FNM shareholders be protected and not everyone else?"

GOOD QUESTION

I WANT to hear the answer.

Eleua said...

"Why should FNM shareholders be protected and not everyone else?"

Because the gov't is scared shitless over the implosion of the Baby-boomer housing bubble. They know it is a financial black hole on the other side of this, and if Fannie were held up as the problem, people would be looking to carve it up to satisfy the financial bloodlust they will have when their home/retirement nest egg goes kablooie.

If we can just smooth over the fact that GSEs like Fannie create artificial liquidity, and that liquidity can become jeopardized, the Lumpenvestoriat will look somewhere else (mid-East) at the cause of their problems. The politicians/FED get a pass on this.

Everytime someone makes a move to scrutinize the GSEs, they spin up their propaganda and say that the GSEs make the "American Dream" a reality - which is complete B-S.

Crime does pay - provided the crime is big enough.