In an interview with Rick Santelli on CNBC today, Senator Bob Corker (R-TN) told viewers to “short” shares of Fannie Mae and Freddie. We’ve never seen a U.S. Senator comment on securities prices or give advice on securities trading before, and we’re guessing that you haven’t either. Here’s the clip from CNBC:
orker’s bias against shareholders and shareholder rights has been consistent in recent years, even as he has championed his own agenda for Fannie Mae reform that entails giving Fannie and Freddie’s business away to the big banks. In his interview today with CNBC, the Senator continues this bias by accusing shareholders of wanting to “fleece the American people.” This outrageous statement ignores the fact that shareholders are the ones who have been fleeced by the Treasury Department, their rights trampled by the Third Amendment Sweep, which is a violation of the law governing the conservatorship of Fannie and Freddie.
Furthermore, we find it quite interesting that Senator Corker would go on CNBC to tell a financial audience to short a stock, or to make predictions on a stock’s performance, especially given his active and longstanding legislative activity on the companies involved. Our readers may recall that former Corker staffer Michael Bright, who was a primary author of the Corker-Warner legislation, took a job at Blackrock last year. According to public sources, Blackrock was heavily involved in lobbying for the bill’s passage and would have been a major beneficiary. Read more about this here.
Some questions need to be answered:
1) Who else benefits from Bob Corker’s GSE Reform agenda, and is he fully disclosing his ties to these interests?
2) Why would he go on CNBC to comment on stock prices, even going so far as to recommend that viewers short a stock?
3) Isn’t it unprecedented for a Senator to do something like this?
More to come…