Resort to Idiocy

I read this morning that Fannie and Freddie should be combined. I think they should use the Name ‘Frantic’ instead of ‘Frannie’ if they do so. You take an immense structure with a huge amount of Bad Paper, and join it with another outsize structure with terrible amounts of Bad Paper; in the process, absorbing a gigantic amount of Bad Stock in order to issue a greater amount of Bad Stock to cover the Bad Paper of both units. Sounds a little weird to me, and I must ask who is going to buy the newly-issued Bad Stock? I have a little Comment for a Big Problem: The Suggestion that their combination would, in itself, forestall Failure; does Anyone remember the collapse of the Soviet Union? The later was much larger with more Resources than even Fannie and Freddie coupled, and it’s Downfall was very rapid, even faster than Expectations, because of loss of Confidence. Size only guarantees a heavier thud!

There is still some Sanity, but no Vote, at the Federal Reserve. Thomas Hoenig states institutions must fail when they screw up Operations, and also wants to fight Inflation; correctly ignoring the ‘Rome is Burning’ scenario. Rome is always burning, and no one ever worries except when major Investors are threatened. Small Business suffers failures every Business day, Mutual and Hedge Funds lose Investor funds daily, and Mortgage losses are nothing new, even in the last so-called Boom. There is Crisis, though, when Investment losses threaten to greater degree than the Internal Revenue Service. Fearful Investors should take heart that it could not be worse than the Tax rates of the 1970s, except for extremist fringe Investors. Close Examination suggests the debacle will not affect Investors worse than the Gas Prices have impacted the lower half of Income Earners. Investors may lose a couple years of Investment Profits, still a better Position than they held in 1992.

Here is a very important reason that I do not fly! I need not be a Captive audience listening to a Sales Pitch for a Product I will never purchase. There are People who find such solicitation entertaining, I simply have yet to meet them. It amazed me all my life that total Strangers felt compelled to invade my Space. Unusual Product does indeed need unusual Venue, but I do not need the occupation of my Time. Most Business practice effects some degree of etiquette, though Someone always feels no compunction about violating the Rules. lgl