Shame, Shame, Franklin Raines
Leaving economic destruction in your wake is shameful.
"The greatest trick the devil ever pulled was convincing the world he didn't exist." Verbal Kint
We've located our pal Franklin Raines and, as we've been monitoring the risk in the GSE's for the last five years, I thought ye faithful would like an update on his whereabouts as Fannie (FNM) and Freddie (FRE) share the spotlight.
Some highlights since he left the helm:
- He's shaved eight points off his golf handicap.
He's taken the corner office in Steve Case's company.
He's driving a sleek BMW sedan.
He's taking calls form Barack Obama's team seeking advice on mortgage and housing policy.
He's ducking responsibility for Fannie's problems and pointing the finger at the Bush administration.
He's praising Hank Paulson for "propping up the company."
He said "Watching from outside the limelight has been frustrating"
His payment of $2,000,000 and the forfeiture of $22.7 million in stock did not come out of his pocket. It was covered by insurance!
He's in strong recovery mode. (More than his former employees can say).
We avoid acrimony in the 'Ville-it's not our style-and I'm trying hard to not break tradition.
After all, Ruby taught me to take the high road as it's less crowded and boasts a better view.
What I will say is this-shame, shame Franklin Raines. Much like Alan Greenspan was the architect of cumulative imbalances that will burden our children with obligations, you helmed the Titanic and snuck off with the life-vests.
There are two lenses with which to view your legacy.
You knew what you were doing and for that, you should be liable, be it in the court of public opinion or otherwise.
Or you didn't, in which case you had no business running the company and accumulating your fortune.
As policy-makers and politicians point fingers and paint banks with the blame brush, you're enjoying a posh life and lamenting about your legacy.
It seems to me you've gotten off easy and for that you should be thankful. More likely than not, those left in the wake of the housing destruction weren't as fortunate.
To be sure, there is no one person responsible for where we now find ourselves.
The DNA of this market has been baked in the cake since the back of the tech bubble.
Financial engineering certainly exacerbated the risk.
And, as discussed, many of the big picture blues are now baked in the cake, a necessary evil that will ultimately allow us to build a sustainable foundation for future growth.
We all share responsibility for living beyond our means for as long as we have and that immediate gratification mindset has come home to roost .
Time, and price, are the only solutions. The good news, for all of us, is that we've embarked on that process. After the debt destruction process runs it's course, those who have properly protected capital and armed themselves with financial intelligence will be in a fantastic position to prosper
As for you, kind sir, it's not to late to make a difference and affect positive change.
Charitable efforts to help some of the folks who no longer have a roof over their head would be a great place to start.
Redemption, as Warden Norton once noted, lies within.
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