quote:

Originally posted by occrider No my logic implies that people read the ratings reports of auditors who actually have a clue about what they're talking about and some basis of opinion. It's no accident that stock price increased by a large margin on the same day the Moody's report came out.

And it's not accident that Fannie's stock price was up today on the news of the CEO and CFO departures...despite the fact that their whole accounting situation still stands in limbo and there could be more shoes to drop.

quote:

Originally posted by Shakka And it's not accident that Fannie's stock price was up today on the news of the CEO and CFO departures...despite the fact that their whole accounting situation still stands in limbo and there could be more shoes to drop.

Because the hit it took for the actual financial impact on the company were sustained back when the news was released:



It makes no sense to continually sell without the disclosure of additional bad news. The fact that FNM is pro-actively dismissing its executives without ofheo needing to go through the steps of filing a federal statute to remove the CEO and CFO sends a promising signal to investors that FNM is going to be pro-active in restoring investor confidence. But anyway why are we talking about fannie? You still haven't addressed specific freddie concerns with its derivatives portfolio. All of whose concerns were addressed by S&P and Moody's in the industry analysis of housing GSEs.

___________________
Retro ...

I'm still sticking by my argument that someone taking "two seconds" to sign a piece of paper pushed in front of him without taking the time to register the significance of what he is doing is no greater than having a robot sign it. I'm sure Mr. Rumsfeld wakes up every day hearing new reports of casualties in Iraq and if that doesn't make him feel condolence for those loses than him putting his John Hancock on a piece of paper sure as hell won't.

I'm sorry that these families are upset, but that's what happens in war. Their loved one signed up, voluntarily, to serve their country, no matter what she asks of them and as a by-product some will die. I don't know what these families want. How is a signature going to make their loss any easier or less painful? Are they going to demand personal letters from every member of the armed forces or maybe a private visit from the President next in some desperate hope of making their loss more palatable?

Part of being a soldier is the real possibility of dying. If the family or the soldier was oblivious to this fact, I feel for them. But when one dies in the line of duty, with both family and soldier knowing full well what may happen, I fail to see how a "personally signed" letter from the Defense Secretary is going to make their lives easier or their loss more justifiable in their grieving eyes.

4 words: Much ado about nothing.








And Occ, Fannie's derivative/hedging tomfoolery makes Freddie's look pristine. It will get much uglier before it's resolved.

I think either a) he should sign them or b) he shouldn't send them.

They have to be signed by him(as small a gesture as it is) just to make tht connection and actually make them from him. If he's never seen it how is it possibly from him? All it is, is some sort of weird (and quite perverse) mail distrubution.

As for being soliders and that being their job, it is a kind of vaild point but as the person who sent thouse troops all of them to war and as he took the desision to send out letters "from him" he should bloody well send them out himself not fob off the task to a computer. The least he could do is take the time to photocopy them himself I supose..........

___________________
If you can read this, I'm seriously fucking bored.

Kind of like all of those letters "sent" by James Carville with his "signature" on them asking for campaign money? Or any other politician for that matter. I'm not trying to downplay this(as much as it may seem like it), but isn't there just the slightest double-standard going on here?




and like I said above, I still feel like this is much ado about nothing.

quote:

Originally posted by occrider This really pissed me off. Traditionally, the secretary of defense personally signed the condolence letters to families of the deceased. For some reason, Rumsfeld felt the need to assign that duty to a computer. Reminds me of how we were putting armor on humvees "as fast as possible", only to discover that the company making the armor had additional capacity for more units if the defense department had requested it.

Well, dang Occrider, he might get writer's cramp!


[[[smoke]]]

quote:

Originally posted by NeoPhono I'm still sticking by my argument that someone taking "two seconds" to sign a piece of paper pushed in front of him without taking the time to register the significance of what he is doing is no greater than having a robot sign it. I'm sure Mr. Rumsfeld wakes up every day hearing new reports of casualties in Iraq and if that doesn't make him feel condolence for those loses than him putting his John Hancock on a piece of paper sure as hell won't. I'm sorry that these families are upset, but that's what happens in war. Their loved one signed up, voluntarily, to serve their country, no matter what she asks of them and as a by-product some will die. I don't know what these families want. How is a signature going to make their loss any easier or less painful? Are they going to demand personal letters from every member of the armed forces or maybe a private visit from the President next in some desperate hope of making their loss more palatable? Part of being a soldier is the real possibility of dying. If the family or the soldier was oblivious to this fact, I feel for them. But when one dies in the line of duty, with both family and soldier knowing full well what may happen, I fail to see how a "personally signed" letter from the Defense Secretary is going to make their lives easier or their loss more justifiable in their grieving eyes.

It's not so much that the families demanded or required the personal acknowledgment from the sec-defense or the President, nor are they expecting to make the loss any easier if they had gotten a personalized signature. It's the fact that he attempted to console them with a form letter with an auto-signature is an insult. Particularly when it involves something as momentous as the loss of a loved one. If you had read the reactions from the family members, they weren't more sad or greiving because they didn't get rummy's john hancock, they were pissed and mad as hell that Rumsfeld would insult them by sending something with a fake signature.

quote:

Kind of like all of those letters "sent" by James Carville with his "signature" on them asking for campaign money? Or any other politician for that matter. I'm not trying to downplay this(as much as it may seem like it), but isn't there just the slightest double-standard going on here?

How many fake letters were sent by Carville, or any other politician for that matter, to soldiers who died in combat?

quote:

and like I said above, I still feel like this is much ado about nothing.

A) Support the troops!

B) The outrage coming from the troops and the families of dead troops about this incident isn't a big deal. Really ... blown out of proportion. You signed up to fight in the army, and now you or your family should expect deaths.

Must be one of those "mixed messages" that Bush talked so much about during the campaign.

quote:

And Occ, Fannie's derivative/hedging tomfoolery makes Freddie's look pristine. It will get much uglier before it's resolved.

Oh yea? Like what? You must have a juicy source. I have a friend who is a fannie examiner at ofheo and I've heard squat.

___________________
Retro ...

You could understand how during a major conflict such as ww2 or vietnam..because there were so many casualties tens of thousands dead that the secatary of defence shouldnt be signing all of the letters as it would take up so much of their day..but given that this conflict is going on for a couple of years now and the death toll is approx 1200..it works out 2 or 3 letters at most per day..hardly an inconvience for somebody who just died for their country

quote:

Originally posted by occrider How many fake letters were sent by Carville, or any other politician for that matter, to soldiers who died in combat?

Don't make it an issue of degree. My question was simply, isn't there the slightest double-standard at work here?

quote:

Oh yea? Like what? You must have a juicy source. I have a friend who is a fannie examiner at ofheo and I've heard squat.

I have a friend who ate breakfast with a guy who's brother's sister's girlfriend saw Ferris pass out at 31 Flavors last night...but I digress. One of my main sources is a very smart research boutique that does excellent forensic accounting work among other things. Not to mention sources such as the WSJ, periodicals, and others. But like they say, "The market can stay irrational longer than you can stay solvent." Alas, here are a few snippets anyway(Pardon my paraphrased notes):

From the WSJ on 9/24/2004:

quote:

According to OFHEO, FNM's accounting for its hedging activities and derivative transactions is not in accord with GAAP. OFHEO found that FNM used "an imporper cookie jar" reserve for its portfolio of MBS, the likely source of most of the "smoothing" of EPS. Both findings contradict FNM's assurances that it can deliver non-volatile earnings, year after year, b/c its business isn't risky. OFHEO found that FNM "tolerated" lax internal controls, deferred expenses to achieve bonus compensation targets, and "maintained a corporate culture that emphasized stable earnings at the expense of accurate financial disclosures."

Comments from Lynn Turner on 10/14/2004:

quote:

FNM's study of its practices & policies for OFHEO will take at least as long as FRE, possibly up to a year or two. SEC informal inquest will likely become a formal investigation in due time. There's a possibility that FNM will be reporting unaudited earnings going forward, but unalbe to give an audited account in the 10Q filings as KPMG has recently refused to certify financial statements when there is an investigation ongoing. That KPMG put $200M in unrecognized errors from 1997 on the scoresheet will go towards showing materiality under SAB 99 that mgmt left it out there to affect bonus payouts. Being an SEC registrant exposes the CEO and CFO if internal controls are no good and the SEC would likely push to remove them if it believes they made false certifications. Facts so far indicate that there are serious internal control issues. It will be difficult for the CFO to survive, especially since he's on the board.

Restatements that could total in excess of $5B will dramatically reduce the company’s book value, its regulatory capital levels, and its ability to grow. The process will take time...

And the kicker/summary/ramifications from my source...

quote:

12/16/2004 Fannie faced with a potential $9B earnings restatement following SEC investigation for improper hedging and improper accounting. Ramifications of the SEC decision include: · Likely departure of Franklin Raines and Tim Howard, leaving FNM temporarily without leadership. · Restatement of 4 years of earnings, leaving the company vulnerable to investor lawsuits, like that filed by the Ohio AG. · A filing of potential criminal charges by the DOJ. · Need to raise capital, which could come from preferred stock, balance sheet shrinkage, or asset mix changes(i.e. securitizations require lower capital requirements). ·An impetus for Congress to push through GSE oversight legislation tha t will result in a stricter and more powerful regulator. Rep. Richard Baker(R-LA) has already called for further investigative hearings to take place in early ’05. ·Incentives for OFHEO to push harder with their investigative probing into the management practices, accounting policies and auditor independence. The SEC’s decision may actually provide Congress with the impetus to provide greater funding to OFHEO to pursue this role. ·Potential for the rating agencies to review their debt ratings of the GSEs, with the prospect that a downgrade in the future could have negative ramifications in the banking industry for holders of agency debt of GSE guaranteed MBS. · A move by accountants, particularly Deloitte & Touche(which aided in the forensic accounting review of FNM’s accounting practices) to review the accounting policies and procedures for derivative structures at firms like IFIN or COF. ·This action could further spur the PCAOB to take further steps toward insuring auditor independence. · Now that the losses in the “pay fixed/receive floating” rate swaps will be recognized, there could be an unwinding of the hedge of the hedge(i.e. selling the “receive fixed/pay floating” rate swaps), which could put pressure on the bond markets thereby creating a whipsaw to higher rates and a widening of swap spreads. · A widening of swap spreads and higher nominal rates would send a chill through the “games playing” occurring right now in the sub-prime market. ·A significant delay before any SEC certified financial statements are made available again, which technically should bring into question NYSE listing requirements.

Not to mention the imminemt slowdown in the housing boom/rising rate environment/move to ARMs from FRMs, which Fannie can't deal in. And now that juicy little 3% dividend might be in jeopardy? Where do I sign up?!

But on second thought, you're right. This sounds like the ideal place to stash my hard earned duckets. These guys are the poster child of proper management and accounting. All of the negative issues are clearly behind them now and the skies are clear going forward. I know this is true because the stock price has gone up. Nevermind what could possibly happen if the government didn't give them "implicit backing". But I digress...this is for another discussion on another day.

Last edited by Shakka on Dec-23-2004 at 16:29

quote:

Originally posted by zig You could understand how during a major conflict such as ww2 or vietnam..because there were so many casualties tens of thousands dead that the secatary of defence shouldnt be signing all of the letters as it would take up so much of their day..but given that this conflict is going on for a couple of years now and the death toll is approx 1200..it works out 2 or 3 letters at most per day..hardly an inconvience for somebody who just died for their country

I agree--hardly an inconvenience, and hardly worth 2 pages of debate over. The implications of the argument are that somehow Rummy simply doesn't care about the soldiers or their families, and is only some old stodgy bastard who could care less that people are dying. I for one don't think that that is the case at all. I'm waiting for the day that we see these letters for sale on eBay. If you got an authentic signed letter, you could probably sell it for hundreds, if not thousands. Again, I just feel like the media is desperate for a story--and they love stories that make the administration look bad. Here are some thoughts by Boortz today. A lot of you may hate him, and that's fine by me. But I think he makes plenty of salient points.

quote:

Thursday, December 23, 2004 HOW MUCH HAS THE LEFT HURT US? While I was getting ready for the show today I heard a station promo offering support to "our men and women in uniform fighting the war against terror." Seems simple enough, doesn't it? But stop to think just a moment .. let those words roll by just once more. We are fighting a war against terror. The problem here is that no everyone is on board. There is no question that things in Iraq have not gone precisely the way many expected after the fall of Saddam. I don't think anyone foresaw the level of the insurgency that would dog our efforts to establish a free and independent Iraq. We also didn't foresee the degree to which the left in this country would continue, day after day, to criticize and condemn virtually every step taken by George Bush and coalition leaders in first liberating and then attempting to secure Iraq. Virtually ever action taken by the American military in Iraq has been criticized by the left. First coalition forces didn't move on Fallujah soon enough, then it was too soon. Too many troops, not enough troops' too bold, too timid. Wrong war. Wrong place. Wrong time. Since the very beginning there has been virtually no support for the liberation of Iraq from the left in this country, and the enemies of freedom in Iraq have certainly taken notice. How could they not? As soon as the United States appointed an interim Iraqi government to run the show until elections could be held, the left launched attacks on the validity of that government and predicted that it would fail. Don't you just know that those who opposed any freely elected government in Iraq just beamed? When Iraqi Prime Minister Iyad Allawi visited Washington DC this past Fall the American media virtually ignored him, an attempt to strip him of any vestige of legitimacy, respectability and authority. How could the enemies of freedom in the Middle East not notice? There are people in the Middle East, around the world and here at home who earnestly want the US to fail miserably in Iraq. In the Middle East you have leaders in Syria, Iran, Saudi Arabia and other lesser countries who are frightened to death over what a freely elected government in Iraq would mean to them. These people are doing all they can to support the Iraqi Islamic insurgency. Around the world we have nations and leaders who want to see the role of the United States in international affairs weakened. They want a power vacuum that perhaps they can move to fill. The see a U.S. failure in Iraq as something that would weaken this country. The future lives of Iraqi civilians means nothing to these people compared to their desire to see the United States take a hit. And that brings us here to our own people. There are people in this country: call them Bush-haters, Democrats, liberals, progressives ... call them what you will ... but they are dedicated to the idea of discrediting George Bush in any way that they can. They are dismayed over even the most remote possibility that Bush might actually pull a free, independent and stable out of his hat. They know that success in Iraq could change the face of the Middle East for ever. It could be the beginning of the end of radical Islam .. and eventually make Islamic terrorism a thing of the past. Freedom is the greatest enemy of tyranny .. and those are the two sides battling it out in Iraq; but to listen to the left in this country you would think they're leading the cheers for the tyranny side. n Let's cut to the chase. How do you think things would be going in Iraq right now if there was unity in the United States? What do you think the situation would be in Iraq today if the American left had adopted the attitude that "Well, we're in this. So let's get the job done."? Would American soldiers have died be alive today if the left in this country had not done so much to discredit Bush and virtually everything he's done in Iraq? How many insurgents would have stayed with their goats in Syria and Iran if they had believed that the United States was of one voice when it came to establishing a democratically elected government in Iraq? Here's what I'm saying ... in more concise terms. The obsessive compulsive Bush haters in America have been giving aid and comfort to the Islamic terrorists and insurgents who want to make Iraq a theocratic Islamic state run by a group cloned from the Taliban. The encouragement these Islamic goons derive from the bleatings of the left in this country might be your most prominent cause for the level of insurgency that exists in Iraq today.