Here’s something interesting: even though there is a massive push to limit leverage in financial instruments controlled by private parties, Congress allows politically connected entities to drink from a different punch bowl. Today’s example of poor risk control? The FHA, better known as the Federal Housing Administration. Congress mandates that the FHA maintains at least 2% of their outstanding liabilities (they insure home mortgages) in the form of cash reserves. For those keeping score at home, that’s an implied leverage of 50:1. Fifty to one would be bad enough – but FHA’s reserves actually sit at just .24% of their $1.1 Trillion in insured mortgages.