In the 1970s before gas prices began to rival the cost of a medium-rare porterhouse, a high school classmate of mine could accurately be described as a "muscle-car freak."

That was back in an era when engine blocks lower than 327 cubic inches and heavy-duty transmissions, other than Hurst super shifters, were viewed in the same light as toting a book bag to class wearing a clip-on tie.

Long story short, when he finally purchased his dream vehicle - a cop-baiting bright orange 1969 GTO, no doubt accompanied by visions of swooning girls yearning for a ride - the car turned out to be not the rubber-squealing street racing monster he'd hoped, but more reminiscent of a certain bitter yellow fruit.

Oh yeah, a lemon.

Greg - not his real name - probably walked 10 or so unscheduled miles that year because of breakdowns (this was also before everyone saw the benefits of joining Triple A).

I don't remember precisely how much money he poured into repairs, but indexed for inflation, I'll bet it could have easily been enough for a down payment on a dwelling in 2011.

One day his father sat him down and told he he'd learned a very expensive lesson and counseled him that the return on investment was not there, nor was it likely to be, in order to restore the car to its former glory.

Shortly thereafter, it was given a decent burial at a nearby auto graveyard.

I'm wondering why the Obama Administration has no one like Greg's father in its employ to lend a voice of reason when it comes to Sisyphean tasks like keeping up those toxic pretenses and taxpayer nightmares known as Fannie Mae and Freddie Mac.

I'm revisiting this issue for the umpteenth time because I read last week that Fannie has hired yet another chief financial officer - its third since 2008 - when the government placed both entities under conservatorship.

At that time, the government pledged to keep funneling aid (read taxpayer dollars) to keep these bankrupt hulks afloat, and thus far, Fannie's capital injections have cost us roughly $86 billion.  Combined, both have rung up a tab that exceeds $150 billion.

Think nothing of it, it's our treat.

Fannie's first quarter numbers paint even a bleaker future - it posted a $6.5 billion loss.

While the current administration has intimated that it will eventually transition them both out, don't look for it to happen anytime soon.

As if this distressed Gemini didn't already have so much egg on their faces that they could fashion the international omelet at IHOP, last week a story broke about how the federal regulator for both was tipped off to charges of mortgage fraud at Taylor Bean & Whitaker - once the nation's 12th largest mortgage lender - in 2008 - but did exactly nothing about it. The subsequent collapse of TB&W cost investors about $2.4 billion and led to prosecution and jail time for several of its executives.

According to SEC filings, that stumble will result in about $690 million in losses for Freddie Mac.

It appears that it will take the U.S. a lot longer and turn out to be far more expensive to learn its lesson regarding Fannie and Freddie than Greg did with his four-wheeled lemon.

I'm told that he now drives a Nissan.

 

 

 

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