I remember reading a great business book by Jim Collins called “Good To Great”. It talked about the principles, philosophy, leadership and approach that the “Great Companies” all seemed to make, distinguishing themselves from other “good companies”. I can’t remember his criteria for selecting “Great” companies (I don’t have my copy handy) but it was a reflection of the stock appreciation, return on equity, etc. etc.
In his book, there were only some 11 companies (out of the 500 some companies that I think he screened) that he considered having made the leap from Good to Great. Any Fannie Mae was among them. Looking at Amazon.com, I note that the book was first published in 2001. I’m not sure if that was the original First Edition or a follow-up hardcover.
But I remember that Fannie Mae’s “hedgehog concept” was to be a full capital markets player (as good as any other) and to develop its unique capability to assess risk in mortgage related securities. That latter point was what they were “The Best In The World” at. And the thing that drives their economic engine was “Profit Per Mortgage Risk Level”.
I don’t know if Collins has written about “whatever became of Fannie Mae” or not (he also had Wells Fargo among his “Good To Great” companies) but it would be fascinating to hear. And I sense that Barney Frank and Congress can and should be blamed for pushing this once “great” compnay (according to Collins) over the edge and turning it into the Black Hole that may have sucked down our entire financial system.
Professor Collins, if you’re smart enough to be reading this blog: now there’s a project for you!
Turning Fannie Mae into the Black Hole that may have sucked down our entire financial system.
This must be the "change" Obama was talking about as he took a position of leadership while representing ACORN as a community organizer, ahem (and lawyer).