Fannie and Freddie...Too Big To Understand

Fannie Mae and Freddie Mac. Sounds like your typical eccentric lovable aunt and uncle from the country. Hardly. These two notorious names are avuncular in tone only. You see these two cutesy names, Freddie and Fannie, formally known as Federal National Mortgage Association (FNMA) and Federal Home Loan Mortgage Corporation (FHMLMC) respectively, were stationed at ground zero of the 2008 near global financial collapse.

A little background is in order...ole Fannie and Freddie were government sponsored enterprises (GSE) whose sole purpose was to expand the market for mortgages in the United States. Through some arcane "financial engineering" they created a calculus from which the money supply for mortgages was increased and loaned to credit unworthy citizens who wanted housing. Was this risky? Very. Was it understandable? No. Yet, all of this was sanctioned by the US government with minimal oversight.

By the year 2008, F&F owned or guaranteed half of the US $12 TRILLION mortgage market. Their favorite seller mortgage instrument was the now infamous "subprime loan". Subprime loans were loans that carried an adjustable loan rate below the standing mortgage rate. Thus, named subprime. They were easy loans to get for almost anybody who could sign a loan doc. Banks, with the blessing of F&F, took on huge risks and signed up en masse for underwriting the profitable subprime business while the public lined up and dreamed of owning their first home. Affordable housing was now available for everyone. Minorities and low-income buyers became home owners for the first time. A noble cause indeed. Big money was made by all involved and homes were built and purchased. A win for all. Not so fast...

In late 2007, the housing appreciation bubble started to deflate. Home values started to drop precipitously across the country. The rates on the subprime loan began to rise. The first time homeowner already financially strapped to make payments, tried to refinance the loan. Suddenly, re-financing became difficult almost impossible for the homeowner. In many cases, the standing loan on the property exceeded the value of the real estate. Defaults on loans escalated by the thousands per week. Securities backed by sub-prime mortgages lost most of their value with no buyers. Lenders didn't have a clue of how to value these "assets". By 2008, a full out panic which started on main street spread to Wall Street and into the corridors of Washington. Everybody in the big time financial world was in on this. The enmeshed global melt down was on.

How could this happen? Maybe leadership or lack thereof had something to do with this inexplicably rare "perfect storm" event. Christopher Dodd, Senator from Connecticut and head of the Senate Banking Committee which oversaw F&F dealings, said in 2008 F&F were "financially strong." Barney Frank, congressman from Massachusetts, then head of the House Banking Committee, said early on that F&F "should roll the dice" in the name of providing affordable housing for low income folks. Franklin Raines, CEO of Fannie May in the '90s and early 2000s, reaped $100 million in bonuses based on "fabulous" returns and took early retirement in 2004. But, upon closer review, it became crystal clear that F&F was "cooking the books". And the power brokers in charge in Washington looked the other way.

Because of risky loans and the cavalier approach by those in charge as echoed by Frank to "roll the dice", the bailout of F&F alone is expected to cost the US tax payers $400 BILLION over the next few years.

However, all of above aside, I sure learned alot of new words and catchy phrases during the last 18 months of this financial hemorrhaging.

Although I lost alot of money during this tumult, my main street understanding of the Wall Street lexicon expanded my word reservoir greatly. Which reminds me of an old saying, "there are no free lunches in this world".

How can one not be in ecstasy over the discovery of such sexy terms as: moral hazard, systemic risk, sovereign debt, too big to fail, black swans, decoupling, clawback, broke the buck, collateralized debt obligations, credit default swaps, short sellers, and last but certainly not the least, subprime loans. Isn't this a thrilling time to be alive? And as an added bonus, if not for this financial calamity, we would not have intimately known what the following allegedly did for a living: Frank, Raines, Dodd, Chuck Shurmer, Angelo Mozilo, Paul Krugman, Joe Cassano, Dick Fuld, Jimmy Cayne, The Sandlers, Timothy Geithner, Hank Paulson, Ben Bernanke, Lloyd Blankfein, John Thain, Ken Lewis, Christopher Cox, and last but certainly the most notorious, Bernie Madoff.

Over time I'll try to forget about Fannie and Freddie and focus on a healthier visual and remember my two favorite great Aunts, Tessie and Nell. They were happy, lovable and simple spinsters who lived in the Missouri farm country. They fed the chickens, tilled the soil, followed their Cardinals in the summer and hunkered down in the winter. Tessie and Nell didn't know a thing about toxic assets. Unless you consider chicken manure a toxic asset.

Tiger's Nadir

Where were you when Tiger Woods finally appeared from behind the blue circus drapes to confess his adultery to the world? A day to remember? Hardly. A day to forget...I'm trying.

After three months of playing Osama Bin Laden-like hide and seek from the civilized world, Woods finally confronted the glare of the camera's red light. Standing in front of a stupefied audience of 40 representing the three F's of his life: family (mother only), "friends" and factotums, Woods admitted to his abhorant sexual behaviour for which he was totally responsible. He felt that the rules did not apply to him and that he felt "entitled" (to it all). He added confidently, with Buddha's help and another stay at the sex clinic, he will "regain my(his)balance." A return to professional golf is undetermined. Further, he asked us all "to find room in your heart to one day believe in me again." All the while watching this unreal theatre unfold, I'm bracing for his psychopathic/kiwi/caddy bursting wild-eyed from behind the curtains to mug all the clicking photographers.

Where do I begin? I'll try to keep this brief...impossible.

Woods had it all. Handsome and gifted, he was the #1 athlete in the world. He had money for generations, possessions and fame beyond measure. He dominated a very difficult and solitary sport, golf. He had home field advantage around the globe. Married to a Viking Venus. Father to two adorable children. And risked it all and then threw it all away...for now. Now he wears, the scarlet letter A for adultery and everybody in the world knows it, more importantly, he knows it. His corporate sponsors sure know it. His Madoffian fall is mind-numbing. He's gone from corporate icon to corporate poison in 3 months. No matter what happens in the future, the scarlet A will be his everlasting shame. He is damaged goods. Talk about a burdensome cross to carry...that is, if he feels matters of the heart and soul.

Speaking of feelings, I feel very sad for Woods and his victims. Sure, his downfall was self-inflicted but he had alot of "help" along the way. He was also a victim...a victim of his uber-controlled environment from early age to now. Let me explain.

The malleable Woods has never had his hand on his own tiller...ever! He never developed a true sense of himself. The Czars of his life have been his father, Earl, and his agent, IMG. Earl raised him in the manner that Earl wanted and then at the proper time handed his son over to the Darth Vader of agents, IMG. The deal was simple: Woods performed on the golf course and they took care of everything else. And what of Earl's and IMG's motives? Were they honorable? Were they moral? Or, was it all business? I suspect it was all business and all about the money. Woods, not realizing an alternative, feebly capitulated to it all. It was all so comfortable. Why question authority and obvious comfort. Woods believed he was bigger than life. Huger than the ordinary bourgeoisie, his father told him. It must be true. Earl christened his young son as "a deity", an avatar, one that will change the world. With all those tapes running continuously in one's head, one starts to believe this claptrap. As a direct result of Earl's and later IMG's Svengali-like control, Woods' lack of probity manifested in his everyday behaviour. From his tetchy antics on the golf course to his unsatiable appetite for sex, Woods was behaving very badly.

But what about his "friends" and employees, didn't they know what was going on? If so, why didn't they help Woods avert this eventual personal meltdown? I believe they did know. When you travel with the same people constantly you get to know those people very well...very personally. I believe Woods' "friends" and employees witnessed his self-destructive conduct. Maybe even participated in Woods "free for all" lifestyle. But friends help friends even if the friend is blind to it all, don't they? Business aside for once, did anybody close to Woods ever act with pure intentions, to act as a mirror, or is that concept too naive, too old school? Maybe and maybe not. I suppose maybe not in this case. For if somebody said something that the "deity" didn't like, you're on a one way COACH flight back to Cleveland forever...and that ain't good. Simply, I believe that some if not the whole team around Woods were complicit in ignoring if not encouraging his wrongful behaviour. As the saying goes, with "friends" like that who needs enemies.

What to do now? If Woods is sincere about changing his life around, I would suggest the following: be a man and bravely get rid of all those sychophants and parasites around you today. They did you no good. Leave all that you know and go....go somewhere new and challenging that has nothing to do with golf. Perhaps, attend a small college or university(avoid Stanford, another enabler). Study something that will expand your mind and enlarge your heart. Arrested development aside, begin the hard work of finding out who you are, really. If your family wants to go with you, fine. Forget golf, golf will survive. Golf has always been bigger than you as much as you may disbelieve. And if you ably return from this delayed "rite of passage", next time you're in front of a captive audience, you can speak ably from your developed center and not awkwardly from a vapid and soulless text. For that moment, we will all definitely remember where we were when you spoke.

Haiti Revisited

The herculean global effort to aid the people of Haiti continues. In my previous blog on the earthquake catastrophe on Haiti, I referenced Catholic Relief Services (CRS) as one of the many aid groups lending huge support to the island. But CRS is everywhere where there is a human need on a massive scale. The present suffering of the afflicted in Haiti is an everyday occurrence for the people in Africa, Central America and Asia. And CRS is there too! As an update on CRS's continuing effort in Haiti, I include the following report from the frontlines:

"CRS has provided food to more than 100,000 people in Port-au-Prince, many of whom are gathered at the city's largest camp run by CRS. Just days after the earthquake that killed an estimated 200,000 plus people and left as many as a million people without shelter, CRS turned a Port-au-Prince golf course into one of the first formal camps for the homeless, delivering food, water and hygiene materials to some 40,000 people. To date, CRS has raised more than $38 million for its emergency response. Donations have come from all groups within the United States and the world. For all the donations CRS has received, CRS is extremely grateful."

"As the weather clock turns on the island, the rainy and hurricane season begins soon. With no shelter for thousands, CRS has ordered 20,000 temporary shelter kits and planning for more. CRS and its medical teams continues to treat 300 people per day. They are starting to see a gradual change from acute wounds to more waterborne illnesses, such as diarrhea and typhoid."

The news of Haiti may be on the back pages of the papers and in our minds but the need persists to help our island neighbors. When John Paul II visited the United States in 1979, he retold the parable of the rich man and Lazarus; how the rich man enjoyed life and ignored the dying man, Lazarus, at his door. John Paul alerted the crowd at Yankee Stadium and said, "Lazarus is at your door, it is the Third World."

CRS has been working in Haiti for 55 years and will be there helping others for years to come. CRS will not abandon the needy.

Your help is urgently needed. Please donate large or small. Every dollar helps.

How to help: telephone 1.877.HELP.CRS; online www.crs.org

Thank you.

Tats

The gym is a great or not so great venue to view the latest in body art, namely, tattoos or "tats." Lately, I've been spending some time in the gym and thus spending time shielding my disbelieving eyes from the ink assault on the body. And this reaction is from the tattoos I can see. What ink-stained horrors lurk beneath the warm-ups? One can only imagine.

Why tattoos? Why deface skin with permanent colored ink? My guess is that through the display of one or several tattoos, the wearer wants to convey something to whomever wants to look (similar to the message T-shirt phenomenon). But I ask in return, for an example, what message would I convey to my audience if I had a full bodied and in ecstasy pose of Our Lady Of Guadalupe image "tat" on my upper arm? That Our Lady has my arm, if not, my back? If so, I think I would like to keep that a secret between Our Lady and me. But that's just me. You see, I'm old school and having a tattoo anywhere on my body just isn't necessary or life-giving for me. In addition, why would I endure the pain for something so expensive, frivolous yet everlasting. Simply, I don't want to turn my body into a walking fleshy advertisement for whatever "turns my crank" fleeting thought. However, placing all of my personal bias and hang-ups aside, "tat" appeal is growing and seems to be boundless. It's effect can be seen across the oceans and on the exposed and no-so-exposed skin of the walking wounded.

I kinda understand the permanent ink culture on the usual eccentric suspects: certified bad ass-Chuck Liddell, football player-Jeremy Shockey, basketball player-Lebron, bizarre women-Angelina, boxers/excons-Iron Mike Tyson, rockers-Keith Richards, drunk sailor-Luther Billis. What I don't understand are: the "tramp stamp" variety tattoo on attractive women, the "smear job" tattoo on young high school and college kids, and then there is the "headscratcher say what" tattoo on an older and retired person who should know better but doesn't.

On a recent visit to the gym, I was minding my own business at the swimming pool and noticed an older man with an emboldened "tat" waisthigh backside who fit the above tattoo label of the "headscratcher say what" variety. Not wearing my glasses, the words appeared quite blurry but I was curious. I inched carefully and stealthfully closer from behind and zeroed in on the 1" high bold triple strike block letters directly above his butt, which read:
LIFE IS MY CRUXIFIXION.
I scratched my head and internally asked, "say what?" Talk about a tattoo that said nothing but yet said everything. What does this mean? and right above his ass?? I was dumbfounded. I could not even compose myself to ask the author, why this message? I fled the gym flummoxed. For days after, I randomly thought about that "message" and arrived at various conclusions. It ran the full range of: he's just an embittered hopeless old misanthrope who hated life and people, to a man who fancied himself to be a sacrificial lamb of sorts who took up his daily cross alone but was damned determined to tell people what he felt and thought from his behind.

As fate would have it, a few weeks later, I again saw the elderly man with the waistline "message". As he was leaving the gym, I introduced myself. I asked him awkwardly, prefacing it by stating "I'm not a deviant or a pervert but ...I saw you in the shower room earlier and noticed your block letter tattoo on your lower back. I'm curious, what does that mean to you?" Without missing a beat and with our eyes locked on one another, he replied, "it is what it is and the next tattoo I get will go right above it." Almost begging for me to ask what the next tattoo will be, I took the bait and haltingly asked, "what will that be?" Again, he riposted with conviction and a sense of pride:
"GOLGOTHA IS MY DESTINY."
"You can't be serious?" remembering John McEnroe's famous line. I instantly heard that eerie musical leitmotif from Rod Serling's '60s TV show, The Twilight Zone, in my head. Our eyes transfixed on each other for what seemed like minutes yet seconds revealed something even stranger than the "tats". "Do you know about Golgotha?", he asked. I'm thinking...I'm in the gym and someone is asking me about Golgatha, unbelievable moment but then again, I started all this conversation. "Yes, it's where Jesus was crucified, also known as Calvary or Skull Place", I replied relying on my 3rd grade Baltimore Cathecism lessons. He half-smiled. Thankfully, we concluded our short chat, when the old man declared, "Yeah, my wife thinks I'm crazy", and ambled away very carefree...like a child. Huh?

So, what does all this mean? Nothing really. Tattoos are a form of self-expression that elicits some reaction from the viewer. It works for some and not for others. What I learned from my own curiousity about the tattoo world is: to look and not to think and definitely don't ask.

A New Rickie has Arrived

This is a story of a Rickie, a new Rickie, on the public stage of life. Not an old and tired Rickie, Richie or Ricky, like Bobby, Nelson, Ricardo, Gervais, Williams, Henderson, Martin, Samboro, Havens or Stanzi but a modern, young, dashing, fresh, handsome, gifted, full of life Rickie. Rickie Fowler. Remember his name. You see, this "Rickie is a Rookie" on the PGA Golf Tour. And he is for real!

Rickie, 21, from Murrieta, California, down Riverside County way, is a professional golfer. And he can flat out play! Rickie's journey to the PGA Tour has been a bit... novel. He learned to play golf as a five year old from the guiding and loving hands of his adoring grandfather. In the living room of their modest suburban home between Orange County and San Diego, Rickie would pick up Grandpa's driver and try to swing the darn thing. Too big for a five year old one would think. Rickie, 5, over-compensated and adjusted. The club was too long and heavy; he was too short and slight, but by choking down and abbreviating his backswing, he developed speed in his swing so that the heavy head of the driver would catch up at the bottom of the swing. His gifted imagination even at that green age solved the big versus small dilemma. At 10 years old, he would tell his Grandpa, "Paps, I just see shots in my head." "Paps" was amazed.

From the living room, Rickie, graduated to the driving range. This is no country club kid. No blue blood advantages available here. Mom and Dad were and still are hardworking, honest and funloving folks. Rickie became a hardscrabble driving range rat who enjoyed pounding balls and perfecting the swing learned from the hip of Grandpa. He started playing in tournaments in SoCal before he was ten. Losing some, winning some while learning all the time. But something else was at play. His Dad, Rod, at about the same time, introduced Rickie to his passion, motocross dirt bike racing (aka how to have fun while die trying). Precocious Rickie took to motocross as he did golf. Golf and motocross seem like strange bedfellows to most but not to the Fowlers. For them, life is a smorgasbord to be enjoyed. Why spend too much time in front of the the salads when there are so many more wonderful dishes awaiting? Let's try it all is the Fowler mantra.

I know next to nothing about motocross. But, I do know what I see: it looks kinda fun but very dangerous. It's just a matter of time till the fun of motocross is diminished by it's inherent danger. After years of avoiding disaster, Rickie, had his Jesus moment at age 15, when his exposed body met terra firma at 40 miles per hour and broke several bones in a horrific crash. From then on, Family Fowler, said, "motocross is fun but golf won't kill ya." Wise family decision. Motocross remains in his veins but golf became Rickie's singular heartbeat. He dominated SoCal juniors at Murrietta High, received a full ride golf scholarship to the present day golf gladiator training school, Oklahoma State University, in Stillwater, Oklahoma. He traded in the "Orange County-like" flavor for the fighting colors of the "Orange Cowboys" of OSU. Rickie dominated the collegiate ranks and received the coveted Ben Hogan College Golf Player of the Year...as a freshman. He was ranked the #1 US Amateur for 36 weeks from 2007-2008. Rickie went 4-0 in 2009 Walker Cup matches at Merion CC in Philadelphia for the triumphant United States team over the British Isles Team. In 2009, Rickie left OSU early and turned professional after the Walker Cup and on sponsors exemptions made over $500,000 in two months narrowly missing the #125 cut-off position for his 2010 PGA Tour playing priviledges. In December 2009, he earned his PGA card in the white knuckle Tour School qualifying tournament by finishing in 15th place. Whew...what a ride since the motocross accident (no pun intended) and this story is really just starting.

Last week at the PGA tour stop in San Diego at Torrey Pines, Rickie finished tied for third at -10 and $180,000 plus richer. On Sunday, the final day of the tournament, Ricky at 21, was in the hunt for the first time this year. On the 71st hole, the difficult 17th hole par 4 with the sucker pin tucked back right, Rickie, with an indominatable motocross fearlessness, went at that flag. They call it a sucker pin for a reason. His ball floated slightly to the right and landed in heavy wet rye rough... pin high but grass low and gnarly. Minutes later, he left the green with a double bogey, 6. But dirt, blood and pain don't last long on Rickie. Motocross guys seem to have short memory for previous misfortune. The final hole Rickie birdied from 3 feet. Ben Crane, the eventual winner, parred the last hole for -12 for the tournament. If Rickie doesn't double bogey the 17th hole, he ties for first and playoff ...and if I had boobies I'd be my sister.

With the West Coast PGA Tour swing at full throttle for the next two weeks at Riviera and Pebble Beach, watch for this new kid on the block. Rickie, of small stature for a professional athlete with a body-type more suitable for an In and Out Burger associate, will be the one with the non-traditional look: wearing an oversized painters cap with the Puma logo, with wavy cascading Buster Brown hair and electric fashion colors including the belt. What you may not see right away is a young man in a hurry who has the skills to get what he wants. At first blush, he will seem edgy and cocky. A unique blend of James Dean, Elvis and Arnie. To be sure, Rickie is an acquired taste. Give this kid a chance though to wow you like he did me when I first saw him at the Calloway in November at Pebble. He placed second to wily ole Pebble veteran, Texan Mark Brooks. Rickie is fearless, fast, creative, powerful, fun to watch, low key, approachable and talented. He has "it." He is one "very cool little guy", as fellow PGA pro and free spirit, Will MacKenzie quipped.

May the force be with you my little friend, Rickie. I'll see you and Joe, his boyhood friend, caddy and budding fashionista, in Pebble and not just for the ATT in February but for The Open in June. I'll be watching and I hope you all do to.