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To: Knighty Tin who wrote (295700)	10/13/2004 10:54:43 AM
From: orkrious	Read Replies (1) \| Respond to of 436258

surprisingly good piece by cramer thestreet.com Fannie Mae Execs Have It Too Easy By James J. Cramer RealMoney.com Columnist 10/13/2004 10:37 AM EDT The more I think about the guts of these Fannie Mae (FNM:NYSE) executives, the more I am sick to my stomach about the way they are handling themselves. Their regulator finally does a first-rate job analyzing the problems Fannie has and what does Fannie do? It blasts the regulator! The gall of that is astounding. Can you imagine today if The New York Times issued a statement saying, "SEC, take your subscription inquiry and shove it!" Can you imagine Chiron saying to the Justice Department, "We aren't cooperating with your vaccine inquiry. In fact, we are ripping up the subpoena because do you know how hard we work to try to help save lives here?" Can you imagine if Computer Associates just said, "The SEC has no right to look at our books because they are incompetent to analyze this stuff and we are just going to ignore them"? Chaos. We'd have utter chaos. But the Fannie Mae folks have gotten away with it so far. The press has taken their derisive comments about their regulator as if that was just par for the course, as if everyone blasted their regulators when they ask a lot of questions that are a nuisance and raise worries about capital shortages and earnings management. In fact, the conventional press's tone to date goes something like this: "The inane regulators at Office of Federal Housing Enterprise Oversight have besmirched the terrific reputations of Frank Raines and Tim Howard." They have been almost apologetic that Raines and Howard had to be put through the embarrassment of the report when they are so busy building cheap homes for the poor. Look, Fannie Mae's a hedge fund gone wild, it is a total runamok make-up-the-numbers company that reminds me of the portrayal of the American military in Dr. Strangelove. And I know why. The commentators and writers simply haven't read the *%#$^&@^( report. I don't blame them; it took me six hours to read, six hours that I wish I had spent doing something else. I only read it because David Darst from Morgan Stanley -- my former boss -- insisted that I read it. It's an amazing report, covering only one small part of the abuses that this company seems to have routinely committed. If you had read the report, you would know that Fannie Mae simply makes it all up as it goes along. It's an unbelievable report. That anyone would challenge it, let alone attack the authors as Raines and Company are doing, is the height of lunacy, just preposterous. They should be thanking OFHEO, not stoning them. To me, it just proves even more so that Fannie Mae is run by a bunch of actors and politicians. And it's so darned big and out of control that nobody even has a clue how to rein it in anymore. I hope that somewhere, someone in the government will take aside a retired derivative expert from Goldman Sachs or Morgan Stanley or Merrill Lynch or Smith Barney and read the report with them and recognize all of us who trade this stuff know: The executives from Fannie Mae must be removed now and a new team, a team that understands that Fannie is not above the law, should be put in place in their stead. Period. End of story.