Fannie Mae and Me

For those of you tracking such things, this was the week I was going to tell my boss I was quitting next month. Well, the context in which I was going to share this news has radically changed over the past 8 days!

As most of you know, a Lehman analyst's critique of Fannie Mae last Monday led to a uncontrolled swirl in the financial markets that ended last Friday with the near meltdown in the prices of the shares of both Fannie and Freddie Mac. Even assurances by Treasury Secretary Paulson and Fed Chairman Ben Bernanke couldn't stem the tide. A hastily (but not thoughtlessly) prepared "plan" to help out Freddie and Fannie was announced by the White House on Sunday night, but as market watchers know, that has not consoled the markets. As of this writing, Fannie stock is at around $7. When I joined the company it was in the 60's. It's been a quick spiral downward.

For the record, although Fannie Mae is not making any public announcements (because it is in the quiet period before it releases its second quarter financials), the institution has never asked the government for help.

I called my boss Friday at midday from my office in Herndon (where I was working that day), because I learned that the COO, my ultimate boss, was going to hold a town hall that afternoon for his direct staff (which could include me). I couldn't make it to the event in Washington, so I asked David to let me know what Mike was going to say to the staff, as I was eager to know what I could about what was going on. David called me later in the day after the meeting, and although he tried to be assuring, he didn't do a very good job. According to David, Mike didn't say much. My frustration was more in not having been in the room to hear what was said; I was still very bullish on the company, and had not had any indication that the company was going under, as the market at that moment was predicting. Earlier in the day, David had sent around an email to his direct reports, recounting his own experience at Apple during the crazy days when that company was tanking, and giving us the (oh, very encouraging) advice to stick to our knitting, but that wasn't very reassuring either. He was surprised, I think at my level of anxiety, and I thought as I hung up the phone with him that he would be pretty damn surprised when I told him the following week that I was leaving the company!

I was planning to tell David yesterday, at the end of the day, about my plans, but I was thwarted. He took off on a business trip (earlier than I had expected) and won't be back until Friday, when I will be down in Norfolk for the weekend. So, I will tell him next week. All those anxious thoughts over the weekend about how to tell him, what his reaction will be, were for naught, and hopefully not to be repeated this weekend!

So friends, although it may look like I've made the decision to leave Fannie Mae at a fortuitous time, I must say that it's a good company to work for, and I wouldn't mind going back. But there's a long road ahead for the company in this legislative environment and the crazy market. These pressures have already had an impact inside the company and its employees, and the management will have a big task ahead of them to keep people focused. But I joined the company to work on the largest project ever undertaken by Fannie, the restatement of its financials for the years 2001-2004, and the project finished ahead of time and with an amazing sense of teamwork, so I am confident that the company, under its present leadership, will ride out this storm successfully.