CHESSNOID

I just finished reading a Bloomberg article called Fannie Mae’s U.S. Bailout Reaches $60 Billion After Ninth Straight Loss.  You would think just after reading the title it would be common sense for the government to say enough is enough.  We need to close shop, sell assets, and all the investors must take  a haircut (loss).

Still, we have the new 3 stooges taking the place of the old ones trying to figure out what to do.   Obama, Bernanke, and Geithner are responsible at this point in making decisions on how best to spend taxpayer money.  I definitely don’t want to keep pumping money into a company that has assets that are in the negative.  Why are these academic genuises making bonehead decisions.

Bloomberg:

The fair value of Fannie Mae’s assets was negative $90.4 billion last quarter, compared with $102 billion at the end of June. Fannie Mae increased reserves for future credit losses to $65.9 billion last quarter from $55.1 billion in the previous quarter.

Honestly, after 9 straight losses and pumping $60,000,000,000.oo into Fannie Mae, shouldn’t they try something new? Or let the system we have set up take care of it?   Businesses fail all the time.  Assets are sold, then the funds are divided up among the creditors and then it is done. That is what bankruptcy courts do.

For banking entities, we have the FDIC that takes over the banks, gets rid of management, and stabilizes the company.  Can it be that simple to let the organizations that have been around for a long time just do their jobs, instead of throwing $60 billion at a problem and demonstrate they are incompetent.  We had Bush, Bernanke, and Paulson doing this just a year ago and saw them fail.  I don’t understand the logic of copying their decisions and actions and expect different results.