politically-aspirant-attorneys-general-alert.
Clang!
Probably, but we are going to need to push the financial sector for more transparancy, and there are only two ways I see to do it, through regulation, or through investors and shareholders demanding it. I am rooting for the investors and shareholders. The courts should be available to investors who lost money through undisclosed risk.
Gotta disagree.
Fannie/Freddie are not allowed to buy mortgages in the sub-prime space - ie, a “conforming” mortgage that is made by some lender and securitized is not supposed to be picked up by Fannie/Freddie.
So what did they do? They went out and bought a bunch of CDO crap with sub-prime in it. Morons. Completely, totally thwarted the risk profile set out for them.
Because these GSE’s have the imprimatur of the faith/credit of the US government, you, I and every other taxpayer are on the hook for this stupidity.
Doubly so for the residents of states who had pensions investing in Fannie/Freddie stock/bonds/preferred.
Fannie/Freddie need to be peeled open, their books laid bare and their management held up to scrutiny. It will take a court to do this, since the US Congress has been unwilling to exercise their oversight authority to the extent necessary to clean up the books of these GSE’s.
I hope all 50 states sue to open the books of Fannie/Freddie.