The solution to the Freddie Mac and Fannie Mae mess is to move all the bad loans off book. Or so thinks the Obama Administration. You see, the problem isn’t that political motivations caused quasi-governmental entities to make (purchase) and securitize loans that no bank on its own would have made, the problem is that Fannie and Freddie now have to bear the consequences of their poor decisions.

Look, ‘Puter understands a little something about government servicing and collecting of loans. ‘Puter’s worked on loans originated and serviced by the government, particularly the SBA. The loans were mostly bad at origination, because politically inspired regulations prevented government agencies and/or their private partners from making rational decisions. So, out the door goes taxpayer money. When ‘Puter would call the borrowers, they seemed shocked that they had to repay the money. ‘Puter would patiently explain that the borrower had signed a note, and had to repay it, or risk losing the collateral. Invariably, the response came that no one from the government had ever contacted them for payment (sometimes for as long as six years), so the borrower figured he didn’t have to pay it. Moving Fannie and Freddie’s bad assets off books isn’t going to solve anything; the government is incapable of collecting loans.

And forget about outsourcing the collection to a private agency. Private contract servicers for the government are hamstrung by politically correct rules and regulations more concerned with the defaulted borrowers than with getting taxpayer money back. See this HUD servicing page for examples. ‘Puter’d cite you to the CFR, but it’d just make you sick to your stomach.

Again, the solution to Fannie and Freddie’s crisis is the same as that for the banking crisis: force them to sell at auction their bad loans without reserve. It cleans out the “toxic” assets, forces the entities to recognize losses immediately, allow investors the transparency they seek and permits public (bad idea) or private recapitalization of the entity. And if private equity does not want to recapitalize the entity after its bad assets are sold off, liquidate the entity. It’s not rocket science.

But when official Washington policy is predicated on infantilizing American adults in order to make them utterly dependent on the benevolent state, ‘Puter’s not holding his breath for tried-and-true market based solutions to problems.

'Puter

Always right, unless he isn’t, the infallible Ghettoputer F. X. Gormogons claims to be an in-law of the Volgi, although no one really believes this.

’Puter carefully follows economic and financial trends, legal affairs, and serves as the Gormogons’ financial and legal advisor. He successfully defended us against a lawsuit from a liquor distributor worth hundreds of thousands of dollars in unpaid deliveries of bootleg shandies.

The Geep has an IQ so high it is untestable and attempts to measure it have resulted in dangerously unstable results as well as injuries to researchers. Coincidentally, he publishes intelligence tests as a side gig.

His sarcasm is so highly developed it borders on the psychic, and he is often able to insult a person even before meeting them. ’Puter enjoys hunting small game with 000 slugs and punt guns, correcting homilies in real time at Mass, and undermining unions. ’Puter likes to wear a hockey mask and carry an axe into public campgrounds, where he bursts into people’s tents and screams. As you might expect, he has been shot several times but remains completely undeterred.

He assures us that his obsessive fawning over news stories involving women teachers sleeping with young students is not Freudian in any way, although he admits something similar once happened to him. Uniquely, ’Puter is unable to speak, read, or write Russian, but he is able to sing it fluently.

Geep joined the order in the mid-1980s. He arrived at the Castle door with dozens of steamer trunks and an inarticulate hissing creature of astonishingly low intelligence he calls “Sleestak.” Ghettoputer appears to make his wishes known to Sleestak, although no one is sure whether this is the result of complex sign language, expert body posture reading, or simply beating Sleestak with a rubber mallet.

‘Puter suggests the Czar suck it.