Bubble Scandals Taint Another Corporation
Another reader recommended story is that of Allied Capital, which is hastily selling it's mortgage securites. "Commercial lending company Allied Capital Corp. sold a portfolio of commercial mortgage-backed securities, bonds and preferred shares to a Canadian fund management company for about $976 million and plans to sell the remainder of its commercial real estate assets to the same firm."
The firms stock is under pressure, off 4% today, as news of government investigations emerged with ties to the AIG scandal. Herb Greenberg has a more serious question. "Questions about whether Allied or any of its subsidiaries authorized anybody to look into my phone records? It came to my attention that last year somebody had illegally gained access to my phone records and the phone records of several sources."
Anyone interested in the housing bubble must pay attention to the financial firms. The GSE's alone cannot guarantee all the mortgage securities. As the value of MBS's comes under scrutiny it will certainly take down corporations you wouldn't think are exposed.