[laserboy]

One of the key concerns regarding Fannie Mae is that they operate under a different set of standards than traditional mortgage lenders. For instance, whereas banks typically operate under a fractional reserve system where their loans are backed by a certain amount of cash reserves, Fannie Mae operates under no such restrictions since they are not a "bank" and are free to use corporate debt instead.

Again I am not an expert on derivatives, but if ever there was a company where solvency was an issue, I would think Fannie Mae would be it. Their debt to equity ratio is 35 to 1 for goodness sake. Do they know what they are doing? The fact that they lost $9 billion and tried to sweep it under the rug does not inspire a great deal of confidence in me.