"So I am looking at this Big, Big Problem (BBP)...when I was saved by a little-known Law Of Physics: 'If at any time you find yourself doing a transfinite amount of work, the answer can be obtained by inspection.'"

Apparently, Franklin Raines, ex-CEO of Fannie Mae (NYSE:FNM), has a lot of time on his hands, enjoying his retirement from being CEO of Fannie Mae after it got into its infamous period of accounting irregularities. I must assume that now, as a man of leisure, he has read everything worthwhile or interesting, and is now reduced to reading the stupid Mogambo Guru newsletter just to pass the time away, which makes me pity him and makes me hope I don't end up that way; reading worthless dreck like the MoGu. A shiver goes up my spine at the thought!

The reason that I bring this up is that I have been very politely requested to retract my irresponsible, off-the-cuff statement that he was complicit in the apparent frauds and weird stuff like "accounting irregularities" at Fannie Mae, which has resulted in them not being able to issue financial statements for years as regulators try and sort it all out.

I happily do this, and freely admit that I am just a blowhard yahoo who doesn't have any idea what I am talking about, and who usually speaks without thinking about the ramifications. Like, for example, when the minister asked me, "Do you take this woman to be your lawfully wedded wife?" and I, without thinking, just blurted out "I do", and we all know how well THAT worked out!

Well, this is another case of this, as is proved when his own lawyer has informed me that the "Special Review Committee of the Board of Directors of Fannie Mae" concluded that "as for former Chairman and CEO Franklin D. Raines, we did not find that he knew that the Company's accounting practices departed from GAAP in significant ways."

So, to set the record perfectly straight, I gladly say that, as far as I know, Mr. Raines is not personally guilty of anything that anyone can prove, and I'm sorry I rashly said otherwise, when instead, his own lawyer seems to say that he was merely clueless and incompetent. I hope this makes everyone feel better. I know I do!

And speaking of the shenanigans at Fannie Mae, Sean Olender of SFGate.com has written an article titled "Mortgage Meltdown" with the interesting and attention-grabbing subhead "Interest rate 'freeze' - the real story is fraud".

He notes that the whole "save the subprime market by freezing rates" thing is bankers paying, "lip service to families while scurrying to avert suits and prison", as "the sole goal of the freeze is to prevent owners of mortgage-backed securities, many of them foreigners, from suing U.S. banks and forcing them to buy back worthless mortgage securities at face value - right now almost 10 times their market worth."

The part that tickles me the most is the part where he notes that Fannie Mae was on tap to absorb a lot of these subprime losses, as "the idea was to use Fannie Mae and Freddie Mac to buy the risky loans, even if it was clear that U.S. taxpayers would eventually be stuck with the bill. But that plan went south after Fannie suffered a new accounting scandal, and Freddie's existing loan losses shot up more than expected." Hahahaha! A new accounting scandal! On top of all the other monumental problems at Fannie Mae! Hahahaha!

But it is not just Fannie Mae that is having troubles, as I was just looking at the massive drop in earnings of the S&P 500, and am so intrigued that I am half-thinking about doing a little research to find out if there has been any time, ever, in all of freaking Earth history, when stocks selling at a P/E of more than 18 had ever, EVER had a huge drop in earnings like this when the stock market, the economy and the whole economic thing did NOT go to hell.

Then I decided that the problem was a big one, and I had to also incorporate the massive amounts of debt in every nook and cranny in the economy, including house prices falling, including how inflation in consumer prices was rising, and then somehow incorporating over $600 trillion in world-wide derivatives into the mix.

So I am looking at this Big, Big Problem (BBP) and how it looks like the whole thing is going to degenerate into real work, when I was saved by a little-known Law Of Physics: "If at any time you find yourself doing a transfinite amount of work, the answer can be obtained by inspection."

So I stood back, I looked at the problem, and decided the Law was right: it's obvious just by looking at it that we're freaking doomed! No work needed!

And apparently Richard Benson of Specialty Finance Group has confirmed my suspicions the old-fashioned way - by doing work. He says, "The US economy is continuing to weaken in many areas: The US Treasury has received lower income tax receipts forcing state and local governments to cut back because they're coming up short; capital gains on home sales are falling as home prices fall; property tax receipts are also declining as assessed values go down; weak retail sales mean lower sales tax receipts; corporate profits are down, along with corporate taxes paid; and, many self-employed workers may be employed, but they're not making anything or only half of what they used to."

And if you want more proof that people don't have any money, from online.wsj.com we get the headline, "Surge in Auto-Loan Delinquencies Is Latest Trouble for the Economy."

An interesting bit of trivia is that "car delinquencies are closely linked to the health of the economy", because the "typical delinquent borrower" made a reasonable, good-faith estimate of the future economy, and buying the car "seemed like a manageable payment." It turns out the economy did NOT turn out as expected, and now the borrower can't make the payment. Bad, Bad News (BBN).

With a little history thrown in ("That is the biggest one-month jump in at least eight years"), I will take this interesting bit of automotive trivia to bring up the fact that if you have to choose between your house or your car, a car is more important than a house, as you can live in your car, but you cannot drive your house to someplace looking for a job, or to the street outside of your parents' house where you can park and look so miserable day after day that they finally get embarrassed and agree to let you into their house where you can gradually take over after stuffing them both in a nursing home against their will.

So you get another house to live in, and you still have a car to drive!

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