Reuters Update: Fannie Derivative Loss
At mid-day Reuters had posted an update that seemed to pull back from its earlier reporting. As for the original WSJ numbers "some analysts questioned the analysis." Matthew Park, analyst at AG Edwards in New York said "This particular article was looking at one particular factor and was presenting a worst-case scenario snapshot."
It is curious that Reuters did not have the story up on its breaking news web site. The company has declined to comment as has the regulator (OFHEO) and the SEC. Keep in mind the basis of the story was "sources familiar with the matter." So perhaps it was a leak and those involved are trying to quash it.
Whoever the source was had a fair handle on the details. As for failing to report the loss against earnings, this is where we may see the Special Purpose Entities of Enron fame(see yesterdays post).
At this point the press seem to be ignoring the matter. The stock is taking a hit, down 1.8% at 1PM Eastern time. I agree with Mr. Park in this regard, "Obviously there are a lot of unknowns out there. I don't think anyone out there knows what the outcome will look like."
2 Comments:
Ms. P,
I had not seen that info. It could work similar to shorting stock, etc. But only sophisticated investors with a lot of cash are allowed to do that (90% lose their entire position). The cash would come from someone betting in the opposite direction - it is not a given that would occur. It is a clever idea that will probably not get off the ground. Thanks Ms. P!..Ben
Fannie Mae. It sounds like a character in the Wizard of Oz. Anyways it's all make believe accounting. Where is the bunnie ? In the hat ? No in Washington.
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