Musing over Coffee - The Finale

Good morning folks,

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No, you're not seeing things, this is to be my last Musing over Coffee.  It wasn't an easy decision to make, but one that needed to be made; at the end of the day, I am happy with the decision and I hope you will all see things from my perspective.  This is to be my 193rd and final Musing over Coffee.  It has been a great adventure and journey and I hope you have all enjoyed reading them as much as I have enjoyed writing them.

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Of course this doesn't mean I'm going to quit writing.  On the contrary.  I plan on creating a brand new domain name, creating a brand new website and continue my writing under a new heading.  It will be formatted different and the content will be a bit less personal.  When I started Musings over Coffee I just wanted a place where I could take the things in my head and dump them into words.  Back in those days I had a lot on my mind and a lot of it was fairly interesting.  There is also something to be said about delivery which I have been really lacking on these days.  I haven't ironed out all the other details yet, but the new site will be more to the point and a lot less personal.  That's not to say I won't bring some of my personal life into it, I just want to avoid all the personal details.

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Of course, I don't want to go out with a paragraph, so I will write about something and hope you find it both entertaining and interesting.  So grab your coffee, sit down, relax and enjoy the musing.

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I want to take you back in time for a minute; we're going to go back to the year 1938.  A company was established after  the collapse of the national housing market in the wake of the Great Depression which discouraged private lenders from investing in home loans.  I can hear the collective groans already.  I don't plan on using big words here folks, I don't claim to understand everything there is to know about stocks and trading, but I do work for a Fortune 500 company and one of the largest Financial Firms in the world, so you can't help but pick this stuff up after reading and hearing about it every day for the past 3 years. :)  Bare with me.

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So this new company was called The Federal National Mortgage Association but you may know it from it's nickname, Fannie Mae.  During a recent conversation with a friend of mine, I realized that not everyone knew about this company and what it has done for the economy.  Recently the news has been talking about Fannie Mae and Freddie Mac (Federal Home Mortgage Corporation).  I don't know if you've heard about these two companies in the last few days or not, but if you haven't you need to pick up a news paper or turn on your local news station because these two companies are making headlines all over the world.  Why you ask?  Well, on Friday last week Fannie Mae and Freddie Mac lost over 40% of their shares on the global trading market.  If you're not aware about the current mortgage crisis in the U.S., then please climb out from under your rock and do some reading.  Since January 1st, the U.S. banks have foreclosed on more than 300,000 mortgages due to rate changes and people being unable to keep up with the payments.  If  you're a home owner, imagine losing your home because the rates changed and you were no longer able to make the payments.  Of course I'm not talking about fixed rate mortgages (which seems to be the way to go these days), I'm talking about the variable rate mortgages which are causing a lot of grief and uncertainty right now.  In fact,  a recent conversation with my Mortgage broker opened my eyes up to why and his STRONG suggestion we avoid the variable rate right now.

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Anyway, due to the problems last Friday with Fannie Mae and Freddie Mac, the U.S. Treasury Secretary said he would seek approval from Congress to shore up the mortgage finance companies by buying equity stakes and increasing lines of credit.  So far, in overnight trading, this seems to have helped a bit.  When you consider Fannie Mae and Freddie Mac own or guarantee about half of the $12 trillion in mortgages, you want to have some kind of government backing, otherwise today would have started with people selling all their shares causing these two companies to fold throwing the U.S. into a recession.  Scary stuff.

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Anyway, I've bored you long enough with all this :)  It has been a pleasure writing for  you all and I look forward to doing it again soon through my new site.  Keep checking here for updates on the new site which I hope to have online by the end of next week.

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Until next time, Keep your sticks on the ice!!  (I know Katie used to hate it when I signed off this way, but I think she'll understand this time :) )

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Cheers,
Al