I thought they were behind on their reporting. I’m quite familiar with 10-Ks/10Qs from years in public accounting, and yes, I was also concerned about whether their statements are in accordance with GAAP (which I sort of knew they weren’t), let alone Sarbox.

So how long do they get a pass until the SEC “moves in,” however they do that? I mean, at some point they’re supposed to suspend trading, I would think. How the bleep are investors supposed to evaluate these messes?

And while we’re at it, if their financials are screwed up, it’s almost certain their tax returns are a mess too and at some point need to be amended (going back how many years??). Shouldn’t the IRS be on their butts? Oh, I forgot, in another post I dealt with how THEY are screwed up (I suggested SarBox for them too).

This got out of control in the 1990s, which is bad, but the fact that they can’t get it back in control now is disgraceful. I think Raines, the guy who ruined Fred, has been gone for at least 2-1/2 years now.

I have some sympathy for the tax actually, because Fred and Fan are exempt from other taxes, therefore the playing field isn’t level vs. others who might privately securitize mortgages. But the tax should go straight to the Treasury, not create another slush fund, which the Affordable Housing Fund is.

But our boneheads in Congress won’t force them to rein in their portfolios, and as the Congressman said, this in fact sets them up to expand their scope. This could be an OMFG mess, as he noted.

When you get right down to it, Fan and Fred are already “scandals” in failure to report, and to report accurately. The question is whether they are financial disasters waiting to happen as well. Until the “scandal” part gets cleared up, how do we know?

Talk about a question that gets to the heart of the matter!!! Very insightful.

Check out the following from FannieMae Web Site:

Cautionary Note Regarding Previously Reported Financial Results - On December 22, 2004 Fannie Mae announced that its previously issued financial statements should not be relied upon in light of the SEC’s determination that the financial statements were prepared applying accounting practices that did not comply with generally accepted accounting principles, or GAAP. For more information, please see the Form 8-Ks Fannie Mae filed with the SEC on December 22, 2004, March 18, 2005, May 11, 2005, August 9, 2005, and November 10, 2005. As a result, investors and others should no longer rely on Fannie Mae’s previously issued annual and quarterly financial statements and the corresponding information for those periods contained in earnings releases, Annual Reports, Form 10-Ks, Form 10-Qs, Form 8-Ks, Form 12b-25, Monthly Summaries and Business Activity Supplements.

So what happens when one starts looking for the current 10-Q?

Well, according to this link

Fannie filed this Notification of inability to timely file Form 10-Q or 10-QSB just one week ago on 11/10/2005.

The 10-Q is ” a comprehensive report of a company’s performance that must be submitted quarterly by all public companies to the Securities & Exchange Commission. In the 10-Q, firms are required to disclose relevant information regarding their financial position. The form must be submitted on time, and the information should be available to all interested parties.”; according to http://www.investopedia.com/terms/1/10q.asp .