Wednesday, April 15, 2009

WONDERING WHETHER TO LAUGH, CRY, SCREAM, OR ENGAGE IN SOME COMBINATION OF ALL THREE

From the "Laughably Crazy Ideas That Are So Laughable I Really Can't Laugh" Files, we get this nugget from Bloomberg (H/T Ritholtz): Fannie Mae -- the quasi-governmental entity that holds a huge portion of the shit mortgages dragging down the economy and still stands only because we pumped billions of dollars of bailout money onto its balance sheet -- is exploring the possibility of acquiring Freddie Mac -- the other quasi-governmental entity that holds a huge portion of the shit mortgages dragging down the economy and still stands only because we pumped billions of dollars of bailout money onto its balance sheet.

Whoa.

After giggles and chuckles and head-shaking, I'm left only with a strong sense of dismay and shock at the incomprehensible levels of stupidity, hubris, tone-deafness, and sense of entitlement of the various Insiders running the country (into the ground). A short highlight or two from the Bloomberg article:
Executives at Washington-based Fannie, the larger of the two, have discussed internally the possibility of taking over McLean, Virginia-based Freddie’s operations, according to people familiar with the matter. A formal approach isn’t imminent, said the people, who asked not to be named because the discussions are private.
Private discussions. Hmmm, where have we seen that before? Could one of those Sunday meetings with Bennie and Timmy be in our future?
Fannie, created by the government in 1938, and Freddie, formed in 1970 to be a competitor, ensure that banks have cash available to make loans by buying mortgages or guaranteeing securities they help create from the debt. Together they own or guarantee about 56 percent of all U.S. home loans.
Just read that highlighted portion again. They were not able to ensure that banks had enough cash available to do anything. (How could they?) And even with each other in place to act as "competitors," they fucked it all up in historic fashion.

So what are we gonna do? Let them continue on their idiotic course . . . and remove the ostensible "competition" that theoretically keep costs down and leads to good decision making! Yeah, baby. Who needs good ideas when you can just keep doing the same stupid things that got you into trouble in the first place!

You know, in the battle of snickering and chortling versus sputtering outrage on this one, I think the laughter faction is winning. Sometimes something is so ludicrous you can't even get angry. Anyhow . . .
Barney Frank, a Massachusetts Democrat, is exploring ways to separate the companies’ private and public missions, said Steve Adamske, a Frank spokesman.

A government trust fund would assume the companies’ responsibilities to subsidize rental housing and a remaining company would continue to do business in the private mortgage market, according to Adamske, who said it’s too soon to say what the final structure would look like.
Well there's the standard Congressional legerdemain we're so used to seeing, ain't it. Barney Frank, the tireless crusader for The American People the humongous banks that flood his coffers with campaign money, looking out for the ability of incompetents and crooks to "continue to do business in the private mortgage market."

I'm putting that in the outrage column.

All-in-all, this shit is just so ridiculous I don't even know where to begin. Except to say that since we've taken them over and injected billions of dollars, that means we own these suckers now. So we should put them both into receivership, wind them down, tell their creditors to take a walk, tell their stockholders to continue the walk they've been on for months, and place a giant gravestone over the stinking corpses of both these dead entities, and leave an epitaph reading, "Here Lie The Remains Of Two Really Stupid Ideas. May We Never See Their Kind Again."

R.I.P. (And whether that refers to Fannie or Freddie, or the American -- and global -- economy, remains to be seen.)

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