A TOTALLY RUUD ASSESSMENT.
<< This post shows a shocking lack of insight into what has been going on over the last 18 months. >>
Really? Please enlighten me on all the good stuff that has been manifested over the last 18 months of NOTHINGBURGER. Conservatorship just crossed the line into its post ten year anniversary celebration. The S/P has declined from around $3 to a buck-fifty (Moelis uses a $2.73 benchmark). Case after law case has been lost or continued into oblivion. Over a dozen new lawsuits have been filed by angry and frustrated shareholders. Both GSE's management teams are leaving, along with boardroom departures. The conservator's term is about to end in a cloud of potential disgrace with no successor nominated in sufficient time to be installed when he departs. Both GSE's capital has been depleted to a meager buffer of $3 B apiece. New capital standards have been proposed by the conservator that, if adopted, would require either years of continued incarceration or massive amounts of dilution to exit solitary confinement. Liberal advocacies are screaming that affordable housing is on the brink of extinction. Conservative constituencies are screaming that Fannie and Freddie are teetering on the brink of another crisis and meltdown. Congressional leaders are holding hearings on mal-management and out-of-control GSE actions.
Please feel free to stop my misleading of myself and others by presenting a conclusive summary of why the last 18 months are so wondrous that they insure some better outcome than just restoring the GSEs to where they were in August, 2008. For me, I'll go with FMCC CEO Don Layton who says "Why not just let them go?" At least until such time as you can convince me that some better option exists besides another decade-long slog through the swamp in bare feet and no mosquito repellent.
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