Fannie Mae: ‘The Woman in the Dunes’


Right after I graduated college I read an existential novel called ‘The Woman in the Dunes‘ by Japanese writer Kobo Abe. The story is a bit fuzzy in my mind now, but it centers around an entomologist name Niki who gets stuck in a sandy quarry with a widow who is employed by local villagers to dig sand for sale. Niki tries to escape the sand quarry but can’t and faces an eternity of digging sand. Eventually, he does escape but then gets caught in quicksand and the villagers toss him back into the quarry to dig even more sand. The reason I bring this story up is Fannie Mae – One day it will post an operating profit (but when?) but is so indebted to the U.S. Treasury via its preferred stock investments that it can never truly escape its fate: an endless cycle of digging sand. With its latest loss, Fannie asked Treasury for a draw of $4.6 billion (to maintain a positive net worth). With this latest request, Fannie will owe the Treasury $117 billion, which translates into annualized dividend payments to the government of $11.7 billion. Sand, sand, sand. Everywhere. (Thanks to Wikipedia for brushing me up on the novel.)

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