Sunday, September 07, 2008

Farewell Fannie and Freddie

So farewell
Fannie Mae

You were
like the relatives
who wouldn't
magnanimous by
sharing with your friends
the best bottles
from my

And drinking
my beer...
but not

At least
you could have had
the courtesy
to put some of
my warm ones
back in the

You went
(with an

Stealin' money
from my purse
and using my
charge cards
to pimp and party
with every lowlife
in town.

Some people
were happy
you were shacked-up
at mine, but
it wasn't

But the thing
that I really
wanted to ask you was:
WTF-ingF were you


Etz said...

It's all good. Dan Mudd, the CEO of Fannie Mae, is getting $9.3 million of severance for destroying his company. Richard Syron, the CEO of Freddie Mac, is getting $14.1 million--in part because of a clause he added to his employment contract two months ago, when it was clear the company was headed for disaster.

God bless taxpayers!

Anonymous said...


Doesn't that mean they are going to survive?

As Mark Twain might have said: Reports of their death seem to be grossly exaggerated.

"Cassandra" said...

Etz, the sums are indeed galling for running the ship aground. In some places, such abject failure leads to docking of pay...

anon - they are dead in their current form. It will effectively become a an operation in runoff. The days of the free-lunch are over. If the guarantee is in fact a guarantee,I personally would at least like the Feds to claw back spread from the bondholders. Fine underwrite potential losses, but make them give back the spread to Treasuries.

The good thing is that we'll be back to 20-25% loan to value ratios. And if that makes housing unaffordable to some until later in life so be it. The positive side is that this will feed back into fertility rates and lower them - hopefully to (at least) continental levels.

Anonymous said...

You don’t really believe they’ll be put into run off, do you? The bellows from Washington already ring with chants that FNM & FRE are the ‘only game in town’, I see little to zero chance that they’ll moderately expand their balance sheet and then gradually wind down like the bullet points on the Treas. plan outline. Rather, they’ll ramp much more and stay that way.

Your spot on though about the PIMCO’s giving back the tightening that’s been bequeathed to them.


Anonymous said...

Apologies for being OT but are you the selfsame Cassandra that posts comments on Gideon Rachman's blog?

I certainly hope so.

"Cassandra" said...

Anonymous 11:00 -

No. The closest I get to GR is the fact that FT Alphaville occasionally finds merit in my musings and drivel.

Out of curiousity, why do you hope so?