The Mirage of Fannie Mae-White House Truce Talks . Speculation that a pro-investor settlement looms in the Fannie Mae and Freddie Mac cases has driven shares sharply higher, but this is wishful thinking.

The Wall Street Journal reports:

Rallies based on rumors all too often end in tears.

That is almost certain to be the outcome of a rapid rise in shares of Fannie Mae and Freddie Mac, which have gained 15% since last Wednesday. This has followed reports speculating that the Obama administration could be close to settling a number of lawsuits filed by investors in the two mortgage giants.

The thin reed on which such speculation rests: a request by the government that three attorneys working in the Office of the White House Counsel be permitted to access information covered by a protective order issued by the U.S. Court of Claims.

That is one of the courts where investors have filed lawsuits against a 2012 deal under which both companies agreed to pay nearly all of their profits to the government. At least two other federal courts have dismissed similar lawsuits.

Fascism update.