Buzz & Banter
The Freddie Mac (FRE:NYSE) story may, or may not, be the lightning rod upon which the financial firmament gets impaled (to mix some metaphors). There is simply no way to know at this early stage, as the details remain murky. But the most important headline of the day related to this issue just crossed my Bloomberg: "Freddie Mac named in shareholder lawsuit, firm says."
It seems the law firm Milberg, Weiss is the first to the trough on this particular scandal. This is important not because investors might get some recompense from the alleged wrongdoings of executives (though a notable cause nonetheless). Rather, this is important because of the discovery process that will be part of such a class action suit: detailing the risk controls, the accounting processes, and the reporting rules of a highly complex financial entity. If there is one thing that could make the derivative cockroaches scurry, it's the white light of the lawsuit discovery process.
Keep an eye out for some critters, you know what they say: There's always more than the one you see.
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