The funniest part of the whole SEC vs Fannie and Freddie debacle, by which I mean the saddest part (obvs.) is the absurdity of it all.

Namely, Fannie Mae and Freddie Mac aren’t ACTUALLY being held responsible.  “Fannie Mae and Freddie Mac entered into agreements with the securities regulator to avoid civil prosecution. In the civil non-prosecution agreements, the firms said they would accept responsibility for the conduct and not dispute the SEC’s allegations, without admitting or denying wrongdoing, the SEC said.” So the corporations responsible, which are now government supported, aren’t going through any prosecution for the wrongdoing, but instead a handful of executives (FORMER executives at that), which is just kind of silly.  The executives didn’t mislead investors.  A handful of people didn’t create the subprime mortgage disaster.  It was a system-wide failing, and LETS BE REAL, a failing of the SEC itself probably more than any other one thing.  But people like scapegoats.  It’s bread and circuses.

What’s even more ridiculous (could there be anything more ridiculous), is that they aren’t being charged with criminal wrongdoing!  This is a civil prosecution!  The entire SEC regulation is such a joke that there are not actual criminal charges to pursue!  Did Fannie Mae and Freddie Mac mislead (lie to) investors regarding their assets of subprime mortgages resulting in a catastrophic weakening of both companies as well as the loss of billions of dollars in what can only be described as fraud?  Of course they did!  Can any of the people responsible be sent to jail?  Well, no.  In fact, in all likelihood they won’t even lose any money, as they’re protected by Fannie and Freddie insurance policies, which will be paid using the $151 billion in taxpayer money that was used to bail the two corporations out. “The company’s bylaws indemnify execs for anything but ‘willful misconduct or knowing violation of the criminal law,’ tough bars to get over.” (Forbes).  The entire world is taking crazy pills.

Bloomberg has a good take on it.  Back to the circus.