Freddie Mac Overstated the Size of Its Capital Base

The New York Times reports:

The government’s planned takeover of Fannie Mae and Freddie Mac, expected to be announced as early as this weekend, came together hurriedly after advisers poring over the companies’ books for the Treasury Department concluded that Freddie’s accounting methods had overstated its capital cushion, according to regulatory officials briefed on the matter.

This is called fraud.But,when Rahm Emanuel was on Freddie Mac's board of directors at the youthful age of 40 with no housing market experience: people seem to look the other way.What did Rahm Emanuel know and when did he know it? Maybe if Freddie Mac had a board of directors, with real housing experience, instead of some Chicago Democratic Machine hack:this Freddie Mac problem would not have occurred.