Search Our Site

Custom Search

September 20, 2010

Fannie and Freddie's $4 Trillion Fraud

In an effort to understand the scope of the Fannie Mae and Freddie Mac insolvency, I decided to take a look at each company's balance sheet and go through each 10-Q filing going back to the middle of 2008. What I found was quite interesting.

Mortgage Portfolio

So why did Fannie and Freddie's mortgage portfolio skyrocket from under $1 trillion to over $5 trillion?

The companies engaged in nearly $4 trillion in off-balance sheet financial activities. In their several hundred page 10-Q filings, off-balance sheet financing got one paragraph of honorable mention. That's one paragraph for 80% of the finance activities that you (and now the American people) are on the hook for.

What's more shocking is that these accounting regularities were exposed several years ago. Guess who exposed them and guess who rejected them.

Popular This Month