a dog-eared town

I can’t put it any more bluntly, but Fannie Mae is a giant fraud and you should either get out or go short the stock.

Down Jones Newswires had the story on Thursday.

News that investigators have found evidence Fannie’s executives embellished earnings over the years by overvaluing assets, underreporting credit losses and misusing tax credits sent the housing agency’s stock tumbling and pushed risk premiums on its debt wider Wednesday amid concerns that the company’s multiple- year earnings restatement could be delayed beyond the second half of next year.

This is the same case as Enron. They made it all up and then ran when they were found out about it. The problem with THIS company is there are so many banks that own the stock and it’s bonds that there will be a systemic issue if the company truly does crater.

This company has for years made the case that they can consistently return 15% a year with no risk because they know what they’re doing. Heck, they even said trust us. Let’s face it, when someone says trust me, I know more than you and stop questioning me, it’s time to get the hell out of dodge.