Fannie and Freddie and shares suspended – a scatological update

Both Fannie Mae and Freddie Mac have de-listed their shares today. Under the orders of their conservatorship.

The reasons are not hard to find – both are in a realm of brokeness for which there is no adaquate word. We are talking of a Trillion dollars worth of worthlessness. Last month their shares went to zero – or within a few cents of it. Today they were at 92 cents. The US tax-payer owns it all. All the promises to pay the bearers of all its debts. THE LOT.

Why de-list them though? Apart from it being fraud to sell something worthless you mean?

Well there was as story a few years ago, 2005 I think it was, about the state of America’s hog farms. That’s pigs for us Europeans. Hog farms means shit. To give you an idea, back in 2000 in North Carolina Hog farms produced about 19 million tons of shit and urine. None of it is treated. Most of it gets pumped into shit lagoons. These lagoons are typically the size of two or three football fields and about 30-40 feet deep. One such lagoon in Utah holds the shit of 850000 hogs that are reared on the mega farm and take a dump everyday. That’s the same volume of crap, give or take a jobbie or two, as NYC produces. NYC has 13 sewage plants to treat the stuff. The Hog industry has none.

So what happens? Well , its not pretty. Sometimes the lagoons explode. In 2000 a small lagoon exploded and launched its owner 40 feet into the air. He was lucky. In Oklahoma a lorry driver pumping shit into a lagoon drowned when he and his lorry fell in. It took weeks for his body to be found. In another incident, ” a worker who was repairing a lagoon in Michigan was overcome by the fumes and fell in. His fifteen-year-old nephew dived in to save him but was overcome, the worker’s cousin went in to save the teenager but was overcome, the worker’s older brother dived in to save them but was overcome, and then the worker’s father dived in. They all died in pig shit. (Porks Dirty Secret by Jeff Tietz).

The point of this scatological nonsense? Well the Hog business is a good guide for understanding the mortgage and securities business of Fannie and Freddie.

Hogs can be legally sold as good-to-eat meat as long as they can get to slaughter on their own feet. So no matter how very sick and close to death a hog is, it can be sold as long as it can walk to its own death. Not surprisingly it has been known for a vritually dead hog to be shot with more drugs and anti-biotics than an olympic sprinter. They walk, they are sold, they get eaten by unsuspecting yanks.

Fannie and Freddie did for mortgages what the Hog business did for sandwiches. Any toxic bag of shit pumped with drugs and wrapped in too-good-to-be-true insurance was sold as good to consume. And the Chinese did. Probably washed down with a nice chilled glass of melamine laced milk. Poor bastards!

Doesn’t the profit motive make the world so much better!? Brings out the best in people.

Anyway, F&F are now nothing but two immense lagoons of rotting excrement. If they explode they will shoot shit into low earth orbit and it will land as far away as China. That is why their shares have been suspended. To avoid that explosion.