For entities with cutesy names, Fannie and Freddie sure are complicated. What if we swapped MBSs and stimuli for a bedtime story? If your youngin’ asks what the Fannie and Freddie fuss is all about, try out this tale:
Dear old Fannie and Freddie, our ailing economic grandparents, are very sick. Grammie and Pappie used to bake us hot apple pie in our brand-new homes. Now they’re in the ICU.
Several talented MDs tried to save the ailing pair. Dr. Billy Syron tried to find organ donors for Fannie and Freddie, but nobody would give. Dr. Jimmy Lockhart said Fannie and Freddie weren’t as sick as the others thought.
As the other doctors desperately attempted to solve the problem in their own ways, a very important man stood silently behind them. Dr. Hank Paulson, Head of Surgery at the United States National Money Hospital, pondered the situation. He brooded and bit his nails as the situation got worse.
When he found his nails chewed to the quick, he decided to visit his boss, Georgie. “I need to take over this surgery,” Hank pleaded. “Freddie and Fannie are going to die if these two turkeys keep treating them. If they perish by Thanksgiving, their millions of grandkids won’t have any fresh apple pie for desert. Please, boss, give me control of the case.”
Georgie scratched his head, then nodded. “I will give you complete authority over the case until late next year. And whatever you do, keep the grandkids happy until November.”
So Hank took over. He told the other doctors to assist him while he experimented with a radical new treatment. He told them about his plan.
“First, we need to stabilize Fannie and Freddie. As we all know, Western medicine hasn’t been working very well. So I’ll be trying something unconventional, inspired by the East. It’s a homeopathic treatment that involves injecting other patients’ waste products directly into Fannie and Freddie’s systems. Their immune systems will turn those waste products into valuable phagocytes. Fannie and Freddie will soon grow strong enough to bake apple tartlets for their favorite grandchildren.”
“Isn’t that treatment expensive?” Asked a concerned Dr. Syron.
“Yes,” Paulson affirmed. “We’ll have to get money from the grandchildren.”
“The grandchildren!” Gasped Syron. “But how?”
“Easy. We take 50% of their annual allowances for the next several years. At $10 per grandchild per year, we’ll eventually have enough to pay off the treatment.”
So the doctors went to work, collecting bile, urine, and mucus from other sick patients. They created the mixture in special containers provided by Buffett and Xiaochuan Ltd., a medical supplies company.
As Dr. Hank worked, he noticed that millions of grandchildren and their friends were staring at him from around the world.
“Don’t worry!” He assured them. “We’re taking your allowance, but the good news is that you don’t need the money. Just write us an IOU slip, and we’ll have apple pies ready for you in no time. Now go play while we do our work.”
The grandchildren obeyed with troubled minds.
And this, my dears, is just the beginning.
