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To: Secret_Agent_Man who wrote (287327)	5/17/2004 8:19:53 AM
From: Pogeu Mahone	Read Replies (1) \| Respond to of 436258

Suicide Attack Kills Head of Iraqi Governing Council VOA News 17 May 2004, 10:20 UTC A suicide car-bomb explosion in Baghdad has killed the head of the U.S.-appointed Iraqi Governing Council. The blast Monday killed Abdul Zahra Othman Mohammad, better known as Izzedin Salim, at a checkpoint just outside the headquarters of the U.S.-led coalition in the Iraqi capital. Officials said at least eight other people were killed by the blast, which struck a convoy carrying Mr. Salim - a Shi'ite Muslim who led the Islamic Dawa movement in the southern city of Basra. He was one of 25 members of the Iraqi Governing Council and was serving a one-month rotating term as president of the body. The council quickly named a successor to replace him. Sunni Muslim Ghazi Mashal Ajil al-Yawer from the northern city of Mosul will be council president until the scheduled June 30 transfer of sovereignty from the Unites States to Iraq. There has been no claim of responsibility for the attack, which U.S. administrator in Iraq Paul Bremer called a "vile act." He vowed to defeat the forces responsible for the bombing. Iraq's interim foreign minister, Hoshiyar Zebari, says the attack will only strengthen the resolve of those involved in the political process. U.S. officials said the suicide attack was carried out by a driver who pulled up next to Mr. Salim's car and detonated explosives. U.S. Brigadier Army General Mark Kimmitt says the blast was apparently caused by artillery rounds placed in the trunk of the bomber's vehicle. He says six Iraqis and two U.S. soldiers were wounded by the blast. Mr. Salim was the second Governing Council member killed since the group was formed last June. Aquila al-Hashimi, one of three women on the U.S.-appointed body was gunned down last September in an ambush near her home in Baghdad. Some information for this report provided by AP and AFP. Email this article to a friend. Printer Friendly Version Related Stories Powell Takes Lead in Defending US Policy in Iraq Powell Expects US Forces to Remain in Iraq for 'Considerable' Period of Time Coalition Forces in Iraq Continue Battling al-Sadr Loyalists US Troops to Stay in Iraq After June 30, Bush Says Bush Asks Congress for $25 Billion for Continued Iraq, Afghan Operations Rumsfeld: Abuse of Iraqi prisoners Is ‘Body Blow’ Rumsfeld in Iraq After Prison Scandal, Fighting Continues English - Worldwide Home\| About Us\| Contact VOANEWS\| Disclaimer & Privacy Notice\| Top of Page

To: Secret_Agent_Man who wrote (287327)	5/17/2004 8:20:12 AM
From: zonder	Respond to of 436258

Barron's on FNM: Fannie Mae faces more income issues By Rex Crum, CBS.MarketWatch.com Last Update: 5:15 PM ET May 15, 2004 SAN FRANCISCO (CBS.MW) -- In the latest criticism of Fannie Mae, this week's Barron's says the mortgage finance behemoth is on shaky ground regarding how it records billions of dollars of losses and presents its financial appearance to Wall Street. Barron's cover story says the root of the issue is how Fannie Mae (FNM: news, chart, profile) and its cousin Freddie Mac (FRE: news, chart, profile) manage to keep derivative financial holdings off income statements. With its 2003 core earnings of more than $7 billion expected to grow even higher over the coming years, Fannie Mae would appear to have little negativity on its horizon. Yet a Barron's analysis of Fannie's picture says the company took a major hit to earnings as mortgage rates dropped in recent years. Prepayments on mortgages trimmed the portfolio gains that Fannie would otherwise have received, and it was further hurt by the locked-in rates of its financing sources. To avoid recording a loss, says Barron's, Fannie Mae used a series of legal mechanisms to transfer negative numbers to its balance sheet under "accumulated other comprehensive income," or AOCI. The AOCI strategy lets Fannie Mae "burn off" losses over time. Without that, says Barron's, Fannie's 2002 earnings of $6.4 billion would have been overwhelmed by $8.9 billion in cash-flow hedging losses. Barron's says $3 billion in losses that were recognized in 2002-2003 "pale against" $19 billion paid to settle underwater interest-rate swaps in those years. Indeed, a Barron's comparison of 10-K filings says the company's interest rate swaps on its books rose from $23 billion in 2002 to $149 billion in 2003. The aim of the rising use of derivatives, says Barron's, was to defer losses instead of recognizing them. Fannie Mae can pull this off, notes Barron's, because it has the legal status of a government-sponsored enterprise, or GSE, and can exclude its AOCI numbers from the calculations of capital that are used to support its $1.35 trillion in mortgage-backed securities. The 1938 law setting up GSEs includes Freddie Mac. Federal agency objects Earlier this month, the federal Office of Federal Housing Enterprise Oversight, or OFHEO, which regulates Fannie Mae and Freddie Mac, said that a probe of Fannie's financial records showed the company had failed to follow generally accepted accounting principles on obligations for manufactured homes and aircraft leases. In an agreement with OFHEO that avoids earnings restatements, Fannie Mae will take a charge of up to $260 million in the second quarter to account for the losses. Barron's analysis of other manufactured housing securities suggest more write-offs will be needed in future quarters. That OFHEO investigation followed on the heels of Freddie Mac admitting last year that it used derivatives to hide $5 billion of income so it could be reported as profits in future years, which could dress up earnings reports. Critics of Fannie and Freddie say that any crisis they suffer could rock the international finance system. The companies make most of their money by borrowing at favored rates as GSEs and using the capital to buy mortgages from smaller lenders such as banks. Groups of mortgages are packaged together as securities, and in that system Fannie guarantees or owns about half of the $7.8 trillion worth of U.S. residential mortgages. The benefits of the security structure provide liquidity to the original lenders and help make Fannie appear to be one of the most-profitable public companies in America. Barron's maintains that Fannie Mae has done nothing illegal; that the company has just used financial loopholes to adjust its books in order to solidify its position in the eyes of Wall Street, investors and federal regulators. But Barron's also says that as pressure continues to mount on Fannie Mae to provide a clearer look at its finances, the company could be on the brink of having to disclose income restatements that bring an end to its long run of unfettered profitability.