Fanny And Freddie

[copernicus 0]

Sen. Barack Obama: No. 2 on the Fannie/Freddie list of favored politicians after just four short years in the Senate

awesome soundbite for an ad

[johns76222 0]

awesome soundbite for an ad

Absolutely Disgusting -- People need to go to jail over this. Another example of what happens when the government gets involved in anything outside the military. They completely screw it up and end up costing all of us billions. For God sake, get the federal government out of the financial, retirement, medical, education business and change their pritorites start focusing on the rest off the world by keeping an eye on these radicals that want to kill us.http://townhall.com/video/TheFivewithAmand...1450_091708Five

[copernicus 0]

Absolutely Disgusting -- People need to go to jail over this. Another example of what happens when the government gets involved in anything outside the military. They completely screw it up and end up costing all of us billions. For God sake, get the federal government out of the financial, retirement, medical, education business and change their pritorites start focusing on the rest off the world by keeping an eye on these radicals that want to kill us.http://townhall.com/video/TheFivewithAmand...1450_091708Five

Change the spokesperson and clean it up a little and put it on 24 hour rotation.

[Sheiky 0]

Absolutely Disgusting -- People need to go to jail over this. Another example of what happens when the government gets involved in anything outside the military. They completely screw it up and end up costing all of us billions. For God sake, get the federal government out of the financial, retirement, medical, education business and change their pritorites start focusing on the rest off the world by keeping an eye on these radicals that want to kill us.http://townhall.com/video/TheFivewithAmand...1450_091708Five

I can think of a million and one things that the US government deserves to be criticised over before I get to 'Haven't taken enough action against terrorism'

[85suited 0]

Karl Rove Goes Off... Blames Obama & Libs For Housing Meltdown

Here's Rove on the housing meltdown:"We started in 2001 to try and reign in Fannie and Freddie. We spent four years doing it. We got a bill through the Senate Finance Committee on a party line vote to reign in Fannie and Freddie in 2005 and one of the first things Barack Obama did when he came in to the United States senate was, because he was the third largest recipient of Fannie and Freddie money he joined a filibuster of every democrat led by Senator Chris Dodd to block that measure from being brought to the floor of the United States Senate. Three years later in September 2008 President Obama, then candidate Obama, voted for the same bill he could have voted for three years ago after Fannie and Freddie collapsed. So don't tell me that we didn't try to do something during the Bush years to reign in the housing problem. We were the people who said let us subject Fannie and Freddie to the same kind of scrutiny that we subject banks, savings and loans and credit unions and it was candidate Obama who refused to join that effort, that would have kept this from being an accelerant to a worldwide financial crisis."

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[hblask 1]

fannie and freddie constituted somewhere around 50% of the offending loans.subjecting them to extra scrutiny as late as 2005 wouldn't have done anything to influence the overall outcome.really wish people would stop trying to blame one side or the other, because it's just not productive. when you switch to a radically new banking model, you are inevitably going to have some bad incentives, lax regulation, and a general lack of understanding.even some of the smartest people in the world goofed on this one. stop acting like it's systemic to republicans or democrats.

There was no need to get bad incentives in this point. Lots and lots of people warned Congress about this one. It was obvious, because it was the exact same mistakes Congress made to create the S&L crisis.I agree, there are systemic problems affecting both Dem's and Repub's, and it's the same problem: public choice theory and a disregard for constitutional limitations on power.But in this case, if you look at the history, the blame falls squarely on the Democrats, led by Dodd and Frank. Blaming Obama is a stretch.

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[BaseJester 1]

It was a completely new loan model with implications nobody really understood.

Therefore . . . let's do it!

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[hblask 1]

It was a completely new loan model with implications nobody really understood. The brightest minds at firms like Lehman dropped the ball, and you're expecting politicians to know better?

You may want to check youtube.... there are compiled videos of Republicans explaining what was wrong with Freddie and Fannie and calling for an overhaul, and the Democrats refusing to cooperate because it was obviously just a ploy by the Republicans to keep the poor in their place. Frank and Dodd flagrantly defended FM/FM in the face of obvious explanations of the problems.I hate both branches of the one major party equally, but this one is not even close.

[strategy 4]

You may want to check youtube.... there are compiled videos of Republicans explaining what was wrong with Freddie and Fannie and calling for an overhaul, and the Democrats refusing to cooperate because it was obviously just a ploy by the Republicans to keep the poor in their place. Frank and Dodd flagrantly defended FM/FM in the face of obvious explanations of the problems.I hate both branches of the one major party equally, but this one is not even close.

you might want to link to these videos, maybe check the dates, then consult the case-shiller index and tell me what you believe the politicians could have done.waiting with bated breath here.

[85suited 0]

Circa 2003 in the NY Times

The Bush administration today recommended the most significant regulatory overhaul in the housing finance industry since the savings and loan crisis a decade ago.Under the plan, disclosed at a Congressional hearing today, a new agency would be created within the Treasury Department to assume supervision of Fannie Mae and Freddie Mac, the government-sponsored companies that are the two largest players in the mortgage lending industry.The new agency would have the authority, which now rests with Congress, to set one of the two capital-reserve requirements for the companies. It would exercise authority over any new lines of business. And it would determine whether the two are adequately managing the risks of their ballooning portfolios.The plan is an acknowledgment by the administration that oversight of Fannie Mae and Freddie Mac — which together have issued more than $1.5 trillion in outstanding debt — is broken. A report by outside investigators in July concluded that Freddie Mac manipulated its accounting to mislead investors, and critics have said Fannie Mae does not adequately hedge against rising interest rates.

Among the groups denouncing the proposal today were the National Association of Home Builders and Congressional Democrats who fear that tighter regulation of the companies could sharply reduce their commitment to financing low-income and affordable housing.”These two entities — Fannie Mae and Freddie Mac — are not facing any kind of financial crisis,” said Representative Barney Frank of Massachusetts, the ranking Democrat on the Financial Services Committee. ”The more people exaggerate these problems, the more pressure there is on these companies, the less we will see in terms of affordable housing.”Representative Melvin L. Watt, Democrat of North Carolina, agreed.”I don’t see much other than a shell game going on here, moving something from one agency to another and in the process weakening the bargaining power of poorer families and their ability to get affordable housing,” Mr. Watt said.

[hblask 1]

you might want to link to these videos, maybe check the dates, then consult the case-shiller index and tell me what you believe the politicians could have done.waiting with bated breath here.

I know it was a lot to ask you to look it up, it took me a full 17 seconds, but here you go:Democrats and republicans on pending mortgage crisisEDIT: You're welcome, and apology accepted.

[strategy 4]

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[hblask 1]

That video is hilarious. Splicing inflammatory all-caps arial bold with video clips of democrats responding to questions we never hear... wonderful. The Windows XP new mail notification at 1:04 is a great touch. Seriously, shame on you for posting that drivel.

Look, if you are just going to bury your head in the sand, there's not a lot of point in coming here, is there? First, you say both parties are to blame. When I point out you are wrong, you say prove it. When I prove it (along with proof from 85suited with the articles from 2003), you change the subject.Engage, or stop wasting my time. Do you have a video showing the Democrats trying to reform FM/FM? No, because none exists, because it didn't happen. If you criticize the evidence, you need to present some counter evidence for the other side. Calling it drivel because it goes against your ideology is.... well, more than a bit silly. It's a fricking video from Congress! What further evidence do you want about what went on in Congress (which just happens to be the central question we were addressing)?This crisis was caused by the same moral hazard that created the S&L crisis a couple decades earlier. If you socialize risk and privatize gain, you will ALWAYS get bad results. That's what the Republicans were warning about, and the Democrats were flagrantly denying.Without the implicit backing (eventually made explicit) by FM/FM for all the twisted and bizarre financial instruments that were created, banks would not have taken on such bad risks. They resisted for a long time, but then under Clinton, they started getting some arm-twisting to loosen their standards a little. And exactly as the Republicans warned, it was a slippery slope. (I'm not blaming Clinton, it just happened in that timeframe.)And by the way, in the past I've posted articles warning of this crisis back when it was created, over a decade ago, in articles written way back then by the geniuses at CATO.I'm happy to slam Republicans any chance I can, but the mortgage crisis belongs to the Democrats. The only blame that can be put on the Republicans is that Bush didn't use his bully pulpit to get the public outraged over this before it was too late. I suspect he wasn't up to the job.

[strategy 4]

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[hblask 1]

I showed you evidence of how the efforts to reform FNM/FRE were too late, and how the markets that REALLY imploded were not explicitly the fault of the GSEs. How am I off topic again?I mean, just look at the case-shiller chart. The ridiculousness started in 1998...

The chart only starts in '88, rises slowly for a decade and really only spikes at the end. What is that supposed to tell me?

Dude, I went over why I thought it was ridiculous. It's put together with the same approach one finds in a Michael Moore film. Not ONE of the video clips gives us any context--we are ENTIRELY at the mercy of the editor. I mean, come on, don't accuse me of changing the subject when your video wanders off into the ether with babble of EPS targets and bonuses.

Your main complaint seemed to be the font, which is hardly a valid. The context is obviously congressional hearings. So far, no Democrats have produced an equivalent video showing their side. The reason is because there is none -- they blew it.

http://bigpicture.typepad.com/comments/200...derstandin.htmlI'm getting the feeling that you believe the GSEs issued way more subprime loans (as a percentage of the total) than they actually did.

Let's look at some of the claims:

Did the 1977 legislation, or any other legislation since, require banks to not verify income or payment history of mortgage applicants?

This is silly. It doesn't need to be required. Let's say the rules of football were all identical except for one change: if you throw a pass longer than 30 yards and complete it, you get the gain, if it's incomplete or intercepted, you get the ball and a first down.The Democrats would say "it's not our fault that teams took this rule to mean you should throw lots of long passes. We didn't *REQUIRE* them to throw them!"

50% of subprime loans were made by mortgage service companies not subject comprehensive federal supervision; another 30% were made by banks or thrifts which are not subject to routine supervision or examinations. How was this caused by either CRA or GSEs ?

And why were these loans made? Because of the implicit guarantee by the federal government to catch you if you fall. Socialized risk, privatized gain.

What about "No Money Down" Mortgages (0% down payments) ? Were they required by the CRA? Fannie? Freddie?

I guess he ran out of ideas and is repeating himself on the third point. LOL.

etc etc

He just keeps repeating the same couple of points, completely ignoring the regulatory environment in which this occurred. I've seen some articles arguing the side that the feds were not to blame that were well written, and had some valid points. This article you link is pure fail.

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[hblask 1]

That you're wrong for thinking politicians could do anything about it in late 2004? Repeat #3: you cannot stop a correction once the market gets that far out of line. You can attempt to dampen the blow, but it's beyond anyone's control once it goes parabolic.

It's hard to tell when it was too late; that graph definitely gave no information on the subject.

How many times do I have to say it? We are given some commentary from the guy making the video and clips of people giving answers to questions WE DO NOT HEAR. That is a huge fail.

So when the Republicans say FM/FM must be reformed and the Democrats say it's fine, you think there is some context in which the Republicans were wrong and the Democrats were right? LOL.

The one thing I wanted you to get from the blog was that only 20% of the subprime loans came from GSEs. You saw and don't think it's material... that's fine.

ALL banks had to compete with banks offering the bad loans, and as long as the government is going to cover any failing, why not? Of course the regulatory environment matters. That's where the R's tried to fix it and the D's failed.

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[hblask 1]

1. The republicans were clearly right. The dems were wrong to claim FNM and FRE were healthy and stable. 2. I never said the regulatory environment doesn't matter; I said it was impossible for anyone to stop the coming disaster at that point in time.

OK, I get the feeling we agree more than it seems. I'm not sure 2003-2004 was too late. Houses started going up at crazy rates around 98-99, and each year after that did more damage, so I'd say about half the damage was done by 2003. I really started seeing the bad mortgages become available around 2003, but I'm sort of the bottom of the food chain. But even if they had acted then, it would've saved half the damage. A 25% drop is a lot easier to swallow than 50%.

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[El Guapo 8]

2004 was not too late. Housing prices went up 50% from 2004 to 2007 before they snapped back.