I have never said McFarland lied or that her statements and later testimony were anything but her best factual interpretation of the matters under consideration. She actually had impeccable credentials when she was lured away to serve after her career at Capital One.
But Susan was a newbie. New in CFO responsibility. New in leadership of a behemoth operation like Fannie. New to the mortgage finance/MBS part of the business. And new to "odd couple" relationship between Fannie Mae and the big banks that she only peripherally came from. There is a big difference between Capital One and Morgan Stanley, Goldman-Sachs, Citibank, Wells Fargo, Lehman Brothers, Bear-Stearns, WAMU, Countrywide... ad nauseum. Right? Any disagreement, there?
But if the government acted solely because of her analysis of future profitability, without a LOT of further fact-checking and alternative expert analysis, I would think THAT would be a crime... not what transpired despite her rosy predictions. This surely never happened.
The part that gets lost in the shuffle for a shareholder bonanza is the narrow perspective that government acted only to "take" something from FnF shareholders. The broader question remains whether their actions weren't perhaps more broadly focused on preventing more "takings" of personal property like the 4.5 M homes already in foreclosure. Or, perhaps, whether government acted to prevent a broken system from collapsing again, of which Fannie Mae based on huge market share was the largest and most vulnerable player?
You have to look at the gamut of STUFF going on in 2012 in the housing market. Very little of the bailout money had been repaid. The fears of a double dip recession were rampant. Congress was recoiling from further risk exposure for taxpayers. Citizens were protesting against Fannie Mae in the streets. Lawsuits were piling up seeking damages and penalties from government for trying to save the economy and banking system. And the newswires were littered with stories of alleged scandals, misdeeds and wrongdoing by gamesters in big money houses trying to exploit the housing "buck" for huge monetary gains at other's expense.
The Magnetar Trade is not some little, piddly event with no relevance to the logic of simply winding down TBTF banks and TBTF GSEs. The CDO "events" clearly interlock with the crisis and price paid by taxpayers, either in bailout funds, unemployment or lost housing equity values. That part is not disputable. The intelligent person's interpretation of events in that sad timeline can only be that big money cared more about making more big money than the fringe legality and socially devastating consequences of what their greed foisted off on the mass of taxpayers that footed the eventual bills.
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