Congress: Put Genie Back In Bottle

Now that the GSEs have blown the debt bubble to historic levels, the US congress is moving swiftly to regulate the lenders. "(A) clear consensus has emerged in support of one regulator," Federal Housing Finance Board Chairman Ronald Rosenfeld said.

For its part, the GSE regulator OFHEO has signed a "supplemental" agreement (PDF) with Fannie Mae. But the new arrangement raises new questions that suggest criminal actions within the firm, such as the suggestion that one not falsify signatures on journal entries! "(M)any disturbing questions, especially about tampering with records, and we need to know the nature of the records and the extent of this outrageous practice,' said Richard H. Baker (R-La.)"