Fannie Mae-No Politics (FNMA)

[capitalismforever]

I agree their accounting employed craftiness, but it wasn't illegal. The main component was a deferred tax asset impairment. The GAAP rule for a DTA impairment is very oblique.

From Fannie Mae's 10-K:



It is completely up to the company to determine their own reasonability standards. Because of that vague GAAP accounting rule, the government did not incriminate themselves by finding a crafty accounting mechanism to make the GSE's appear insolvent, regardless of how wrong you and I believe that was to do.