Long time doomers will recall that my blogging specialty has always been worrying about the effect excessive amounts of QSPEs might have on the health of Fannie Mae. So it was a bit disturbing to dig a bit deeper into the Vanity Fair article Doom featured last Saturday.[1] Here’s something to get us oriented about the backstory to the story:
Consider for a moment that former Fannie CFO Tim Howard was featured several times in the VF article. As CFO he may just have hatched the biggest pile of those SFAS 140 off-balance-sheet vehicles ever. Now as you can see in the above video, reporter Bethany McLean was the journalist who broke the Enron story open, which has got to make her awfully sensitive to QSPEs, as that was where the Enron finances fell apart. So given that Steve Schurr and Peter Eavis among others were all over Fannie’s QSPEs as early as April 2005, and the final collapse was touched off by the July 7, 2008 Lehman note on QSPE consolidation, why didn’t that aspect come up in VF?
Lets hope there’s a Part II in the works somewhere, so we can get a bit more insight into what might well be the biggest part of the undertow dragging down the world’s financial services industry today.
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[1]: "Fannie Mae’s Last Stand", by Bethany McLean, Vanity Fair, Februray 2009.
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John-
You gotta love CNBC this morning- it looks like they are really bailing out everybody with a new TART bailout: [Hat tip L!]
It is unclear from the article whether the TART money is for pastries or shady ladies. There is however, the possibility that their proof-reader has MLK day off. In addition to the above, I offer as evidence this ghastly run-on sentence:
It’s time for a editorial bailout!
The magnifying glasses are springing up all over to prove that the mud splattered on the other guy is worse.
http://images.starcraftmazter.net/4chan/scapegoat.jpg
But don’t you understand that this is simply a very small part of what’s going on? For example, we are currently in a currency race to the bottom, at the bottom of which the dollar will be worth so much less that housing will be virtually worthless.
While a thief like Barack Obama prepares to loot the government for his banker friends (it’s so much more sexy than participating in penny ante pay-to-play at the behest of Tony Rezko!!), the entire structure of the economy is collapsing. Not just the idiotic banks. Take a look at the supply chain, which is crumbling because it can no longer be financed.
Don’t you realize that investors now look at Americans as useless clods, unworthy of even a cent of investment? We are a useless civilization. Nothing but a bunch of corrupt clowns. We’re the new Somalia–lunatic zombies.
Congress will do all within their power alleviate America’s pain and restore the economy To this end, they mutually pledge your children’s Lives, Fortunes and hope of sacred Honor.
Igor says: loony