Sure, blame the CEO. But when you're done, blame investors, those poor bastards. Has anyone, anywhere ever understood why traders were so enamored of Fannie Mae and Freddie Mac. Yes, the firms may be "government sponsored enterprises" (GSEs), but their mortgage-backed securities are certainly not insured by the government the way, say, T-Bills are. By rights, the market should treat Fannie and Freddie bonds just like any other corporate bond. But it doesn't, and investors continue to settle for relatively low returns, and that's partly how Freddie and Fannie have made such a tidy little profit.

Alan Greenspan and John Snow tried to drill some sense into GSE traders a few months ago, but they failed, and now it looks like regulation will have to do the trick. Oh well. The Congressional Budget Office doesn't think that good old fashioned SEC disclosure will have much of an effect on mortgage rates. Come to think of it, I'd like to know how much Fannie and Freddie have really knocked down mortgage rates.

Pre-emptive "free market" spin: Of course poor Fannie's going to make herself into a glorified hedge fund. For years politicians in Washington have wrung their hands about the firm's volatility. The only way Fannie could dodge those mean old regulators was to give off some semblance of stability. And stability means over-gorging yourself on derivatives. So, uh, blame the government. Yeah! That's it!