It seems like it is open season on financial companies.
- First the SEC went after Goldman Sachs. There were congressional inquiries as congressmen decided that they wanted to be seen asking Goldman Sachs tough questions.
- Not to be outshined by their colleagues at the SEC, US Federal Prosecutors announced that Morgan Stanley was being probed by US Federal Prosecutors.
- Now it is announced that it isn’t just about Goldman Sachs & Morgan Stanley anymore, the SEC is also looking to target Deutsche Bank and Citigroup for their CDO related activities.
- In the meantime, the CFTC and with the DOJ antitrust division decided to look into the internet rumors that JP Morgan is manipulating the precious metals market, in particular silver.
- Finally, Moody’s announced that it was served a Wells Notice by the SEC. Apparently their actual ratings methodology in practice might not actually have matched up with what they told the regulators they were doing.
All of this is going on as Fannie Mae announces that they lost $13.1 billion dollars in Q1 2008 and need $8.4 billion dollars from tax payers to survive. They don't expect to be profitable for the foreseeable future. A lot of bad things come to light when bubbles burst. It is starting to look like this latest cycle is no exception.