Tuesday, September 16, 2008

Funny Money Idea


I think it's a fair assumption that to the extent  congressional democrats know anything about finance and business, they learned it from the New York Times. Gretchen Morgenson is New York Times assistant business and financial editor.    Today she teams with Jonathon Glater in A Fight for a Piece of What’s Left. It's here that I pass the baton to Tanta, at Calculated Risk . 62.5 million loans
I thought maybe we'd need some comic relief on a day like today. And there's nothing like Gretchen Morgenson for comedy.

This may be the single dumbest thing Morgenson has ever written. I had to read this over several times, aloud, to make sure I wasn't misreading it:
Here is a modest suggestion for James B. Lockhart, chairman of the F.H.F.A., to consider: Do the new owners — us deep-pocketed taxpayers — a favor, and open up Mac ’n’ Mae’s books so we can see exactly what we own.

Also, force both companies to disclose details on every mortgage they guaranteed or purchased in the last 10 years. This would include loan type, the year when the loan was made, the original rating on the security and its originator.

That way, the new owners would be able to see  ... blah-de-blah-blah

g
So how are Billy Joe and Bobby Sue Taxpayer going to examine a database of 62.5 million loans? Fairly slowly, I'd guess. Since the Taxpayers don't generally run mainframes, it just wouldn't do to "disclose" this information on magnetic tape. A lot of them do have PCs, of course, and many of those PCs run Excel. Excel 2003 has a maximum number of rows per spreadsheet of 65,536, so you could get 62.5 million loans into no more than about 950 separate spreadsheets.

Gretchen't Modest Proposal, continued

7 comments:

Anonymous said...

Excel is the wrong tool for the job. What you want is a MySQL or Oracle standalone app. So long as the database is well designed response times would be near-instant even on a desktop computer.
It could be done in a week.

Rodger the Real King of France said...

*bangs head*

Anonymous said...

It's unlikely any PC yet built could handle the data manipulation required for 62 million loans. At work, I have available 4 dedicated servers (expensive Suns) and a mainframe. At quarter end, just to handle reporting on one million participants and their transactions, it takes my jobs 8 days to run. We've quite the team of programmers and DBA's just to get it done in that time.

The bigger issue is, you'd need more data than asked for. Household income and debt, including current assets. Zip codes ($50k in Alabama goes further than in California). Median housing prices in those zip codes. A weighting factor. And it really does go on.

A big problem is going to be this: So little checking was done for so many of those loans. Noone ensured that the one applying for the loan didn't lie through their teeth on income, debt, etc. Loan companies seemed to operate under their own "don't ask, don't tell" policy, because they didn't have to carry the loan, they'd just sell them to Freddy and Fannie and other idiot investment banks.

What really fries my banana is that a taxpayer like me, who actually can handle his mortgage but isn't otherwise wealthy, will be expected to pay the tab for all this moronicity. Screw 'em, let em fail.

pdwalker said...

http://www.dimins.com/

This puppy could take all those records, chew them up, spit them out and tell you everything you need to know about whatever you need to know.

And all on your PC.

As for your job Alear, I'd suggest that some of your DBAs are not up to snuff. Billions of daily transactions are easily handled on modern hardware.

Anonymous said...

Ya know, I don't even know why I'm responding, Pdwalker, but what the heck. Here's all you need to know: We're a Fortune 125 company, and we didn't get that way by accident.

Anonymous said...

http://www.dimins.com/??? So a pizza place can handle all that? Wow!
ozaoB

Chuck said...

Weren't Fannie and Freddie Fortune listed companies?

I know AIG was.

Not much to brag about, one would think.

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