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The Fannie Pack


Where there's smoke...


I'm jumping into a lunch meeting but I wanted to quickly point out the Fannie Mae (FNM:NYSE) news to those Minyans who aren't on the Buzz. Bloomberg is reporting that a federal regulator, in a statement, warned that Fannie may have used improper procedures in accounting for impairments.

Bloomberg further quotes the director of the Office of Federal Housing Enterprise Oversight (OFHEO) as saying "our review of this particular matter, while not concluded, has led to concerns that Fannie Mae may not have applied the proper accounting guidance in this area. This could affect not only the company's manufactured housing portfolio but other assets as well."

I've been sniffin' smoke in this sucka for a long time--and it's been a long haul--but I feel compelled to keep you up on what I see and feel in the name. Why? The implications are massive--far bigger than Worldcom, Enron, Adelphia and Tyco combined--as an unwind, if and when, will ripple through asset classes like a Tsunami. THE question--and it really boils down to this--is whether the government will let it play out.

And as always, Minyans, I offer this with educational intent only. This is the biggest blip on my trading ship, however, and I needed to make sure it's on yours as well.

position in fnm

Todd Harrison is the founder and Chief Executive Officer of Minyanville. Prior to his current role, Mr. Harrison was President and head trader at a $400 million dollar New York-based hedge fund. Todd welcomes your comments and/or feedback at

The information on this website solely reflects the analysis of or opinion about the performance of securities and financial markets by the writers whose articles appear on the site. The views expressed by the writers are not necessarily the views of Minyanville Media, Inc. or members of its management. Nothing contained on the website is intended to constitute a recommendation or advice addressed to an individual investor or category of investors to purchase, sell or hold any security, or to take any action with respect to the prospective movement of the securities markets or to solicit the purchase or sale of any security. Any investment decisions must be made by the reader either individually or in consultation with his or her investment professional. Minyanville writers and staff may trade or hold positions in securities that are discussed in articles appearing on the website. Writers of articles are required to disclose whether they have a position in any stock or fund discussed in an article, but are not permitted to disclose the size or direction of the position. Nothing on this website is intended to solicit business of any kind for a writer's business or fund. Minyanville management and staff as well as contributing writers will not respond to emails or other communications requesting investment advice.

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