In an attempt to save his job, Fannie Mae boss Daniel Mudd has tossed three lieutenants overboard and replaced them with three other insiders. From AP:

WASHINGTON (AP) _ Mortgage finance giant Fannie Mae shook up its executive ranks Wednesday, after shares in it and sibling company Freddie Mac rose for a third straight day as investors appeared less certain a government bailout of the two troubled companies is imminent.

Fannie Mae, the largest buyer and backer of U.S. home mortgages, said its chief financial officer and two other top executives are leaving the company. Three current executives were promoted to replace them.

This pathetic paragraph is at the end of Fannie's press release:

"The Board of Directors is firmly committed to Dan Mudd, the management restructuring, and the strategic objectives around capital and credit he set forth on August 8," Stephen B. Ashley, Chairman of the Board, said. "The Board will continue to work closely with Dan and his management team to guide the company and support the housing finance system through a very challenging period."

The Board of Directors may think it's still in charge. But when companies veer toward insolvency, like Fannie, power shifts toward the creditors. When too-big-to-fail financial companies veer toward insolvency, power shifts toward the regulators. In this case, the creditors and the regulators are the same -- the U.S. government. I wonder how much Mudd and the board consulted with the Treasury Department and the Office of Federal Housing Enterprise Oversight before dumping these guys. The Feds should be calling the shots or at least closely consulting. A lot of people expected a federal bailout of Fannie and brother Freddie last Sunday.