Debt, that is. 40-year mortgages? My friend Eric Englund on the highly-leveraged, Fannie Mae, and especially, its balance sheet. The debt-to-equity ratio is a stunning 43-1 (with 10-12 being an acceptable range for this indistry). In non-banking terms, TWA, I think, had a 10-1 ratio at the point it sank. I think the S&P 500, as a whole, nowadays, averages in the 2.5 range – still way too high. Englund quotes both Roger Garrison and Mises.
The two of us will be defending the sacred balance sheet and attacking regulation in an upcoming book review we will co-write, with the subject being Other People’s Money: The Corporate Mugging of America, by Nomi Prins.