The Four F’s for Today
Yes, the BIG NEWS! for the economy and the housing industry is the take over of Freddie Mac and Fannie Mae. I hesitate to use the word “takeover” but it almost seems appropriate.
No one really knows what this means yet. In the Sunday Business section of the Arizona Daily Star there was one article suggesting this could bring 30 year fixed interest rates down to the 5.50 to 5.75% range.
Fannie Mae and Freddie Mac Are They our Children
I’ve read how much this bailout will cost. I was around when the S&L bailout took place. I also remember the dire predictions of the future of the economy because we did and the same dire predictions if we didn’t.
I was thinking this morning on my way back from breakfast how this really is like a family. I’m the head of a family, I have several adult grown children with spouses and some with children of their own. From time to time I help them out. Sometimes it is something they couldn’t avoid, sometimes it is due to a bad decision which didn’t seem bad at the time.
I could let them work their way out of the situation (which I do sometimes) or I could help them avoid a bad situation becoming a much worse situation. Spend a little to keep from spending a lot.
Parents do this all the time. My parents did it for me when I needed help.
That is as far as this analogy goes. I don’t have to be in on who is to blame, or figure out where it all went wrong, I think we have a pretty good handle on where it went wrong. My point.
For the good of the economy and the future of our country it is better we (the taxpayers) plug this leak in our very big ship before it gets so big the ship goes down or at least takes on so much water it will take a very long time for it to sail again.
Most people younger than 40 don’t even know there was an S&L crisis and bailout. Many think we are kidding when we tell them in the 70’s you could wait in line for hours just to get 5 gallons of gas for your car. They don’t remember or know about the truck caravans at that time traveling together for safety. And those stories go on and even back further.
My parents were depression kids. They know about tough times. They also know what happens when the country waits to long to deal with an issue.
Of course Fannie Mae and Freddie Mac aren’t our children. But in this case we should probably treat them as if they are and get on with life. Whether you support it or not, it looks like that is exactly what is happening.
One week from today, Sept. 15 I’ll be sending in my next contribution to the economy and the country. Uncle Sam sent me a little a couple of months ago. I’ll send him a lot more next week. And life goes on. Make it 5 F’s for today and chalk one up to Family.
New York Times Take on the Bailout
Finally, if you want the New York Times take on this here is a link to their article: “Fannie, Freddie and You: What It Means to the Public“