FBI, Why Now?

"Federal investigators looking into possible accounting violations at Freddie Mac are raising questions about whether the giant government-backed mortgage company improperly delayed the recognition of billions of dollars of losses, according to people familar with the matter. ... Investigators from the [FBI] have obtained a copy of that report, which was never publicly released, and sought more information on the issue, these people said. ... A spokeswoman for Freddie said: 'We are confident that our accounting treatment was appropriate and consistent with all applicable accounting guidance.' ... The regulator, the Federal Housing Finance Agency, said it had decided early last year, 'not to take issue with the accounting' despite the findings of Kroll, which had been hired by the regulator to look into the matter, a spokeswoman for the agency said. ... Until 2004, Freddie used a set of rules known as 'hedge accounting' to recognize gains or losses on such derivatives over many years rather than including them immediately in earnings. ... Kroll accounting experts found that Freddie didn't quality for hedge accounting on those losses and should have recognized them when they were incurred, according to a person familiar with the report", James Hagerty and Evan Perez at the WSJ, 30 April 2009.

What's going on here? Why is the FBI wasting time on this? Didn't Freddie pay PWC $73 million last year? If Freddie's SFAS 133 accounting was in error, why didn't PWC find it? What did Kroll find PWC didn't? If Kroll found anything, why isn't the PCAOB all over PWC? The concept of "hedge accounting" as found in SFAS 133 uses metaphysics. SFAS 133, as interpreted, runs 809 pages. It's economic nonsense.