![](https://investorshub.advfn.com/uicon/266079.png?cb=1486312581)
Friday, October 09, 2015 9:16:50 AM
Posted By: Guest PostPosted date: October 09, 2015 08:44:24 AMIn: BusinessNo Comments
We're not the only ones stunned by U.S. Senator Bob Corker's call on Wednesday for investors to "short" shares of Fannie Mae and Freddie Mac.
Yesterday, Bethany McLean, Vanity Fair Contributing Editor, and author of Shaky Ground: The Strange Saga of the U.S. Mortgage Giants, went on CNBC to say Corker's comments on companies in which he is actively engaged in shaping policy on were, in a word, "crazy."
"Can you imagine the outrage on the right if Elizabeth Warren said you should short 'short JP Morgan?!?' People would go crazy," she said.
Here's a link to McLean's interview, which we recommend viewing if you haven't already.
It seems clear now that Corker appeared on CNBC in part to beat back a rumor, which he supposedly thinks was started by Hedge Funds, that the government was considering taking the GSEs public in an IPO. But he used the appearance to promote his bona fides as a champion of the taxpayer.
But as McLean pointed out, and as we have noted, the interests of taxpayers and investors are actually aligned on this issue. That's because, if the Fannie Mae / Federal National Mortgage Assctn Fnni Me (OTCBB:FNMA) and Freddie Mac / Federal Home Loan Mortgage Corp (OTCBB:FMCC) were taken public, the warrants the government currently owns in the companies would be worth hundreds of billions of dollars. Yes, investors in those companies would benefit in an IPO but, because the government owns warrants for 80 percent of Fannie Mae and Freddie Mac stock, it would be a good deal for taxpayers, too.
In a post Wednesday, we noted that it was unprecedented for a Senator to go on television and recommend shorting a particular stock, especially when that Senator is heavily engaged in promoting legislation that would affect the company involved. Years ago, CNBC created conflict of interest of guidelines for commentators and analysts. The guidelines are quite detailed, and state that commentators, "… must also disclose any other conflict of interest on the part of you, your household members or your firm."
We're betting that Senator Corker wasn't required to fill out the CNBC disclosure forms before his appearance yesterday. But even if one allows that he appeared as an elected official and not as a regular market commentator, his comments strayed far afield from legislation and policy and were totally inappropriate.
http://www.valuewalk.com/2015/10/fannie-mae-more-controversy-over-bob-corkers-cnbc-appearance/
Glidelogic Corp. Becomes TikTok Shop Partner, Opening a New Chapter in E-commerce Services • GDLG • Jul 5, 2024 7:09 AM
Freedom Holdings Corporate Update; Announces Management Has Signed Letter of Intent • FHLD • Jul 3, 2024 9:00 AM
EWRC's 21 Moves Gaming Studios Moves to SONY Pictures Studios and Green Lights Development of a Third Upcoming Game • EWRC • Jul 2, 2024 8:00 AM
BNCM and DELEX Healthcare Group Announce Strategic Merger to Drive Expansion and Growth • BNCM • Jul 2, 2024 7:19 AM
NUBURU Announces Upcoming TV Interview Featuring CEO Brian Knaley on Fox Business, Bloomberg TV, and Newsmax TV as Sponsored Programming • BURU • Jul 1, 2024 1:57 PM
Mass Megawatts Announces $220,500 Debt Cancellation Agreement to Improve Financing and Sales of a New Product to be Announced on July 11 • MMMW • Jun 28, 2024 7:30 AM