The 800 Pound Gorilla

Sallie Mae just can't escape the criticism. If the New York Atty General investigation weren't enough of a distraction, now the chairman of Sallie Mae, Al Lord, is being investigated for a sale of stock he owned. The sale was apparently arranged just days before the president issued his Budget Request where student lending was slammed and Sallie Mae stock lost about 9%.

Of course it's Democratic senators requesting all communication between Al Lord and the White House, but jeez, the guy can't catch a break. We don't think there's anything fishy going on here, but a Senate investigation is enough to put a damper on your $18 million windfall for sure.

Sallie Mae should prepare themselves though. Because after the gang is done beating up Fannie Mae and Freddie Mac, the mortgage GSE's, attention will be turned to Sallie Mae for sure. Ask the folks over at Fannie Mae if the accounting issues were a distraction or not! It's our opinion that Sallie Mae does not have a staff nearly as sophisticated as Fannie Mae did, and we think there's likely some irregular accounting going on there -- just to reiterate, this is all conjecture, we have nothing to substantiate our opinon here. It's just that Sallie Mae runs a sophisticated operation with what we consider sub-standard people and poor decisions are likely to have been made.