Taxpayers stand to lose $400 billion on Fannie and Freddie but still no investigation

[soundforbjt]

This thread is NOT about the 'entire picture' but is about Fannie and Freddie.

We have had tons of threads about the 'entire picture' and placed lots of blame on everyone.

However the issue of Freddie and Fannie is still out standing. The US tax payers are being handed a huge bill due to the improper management of these two companies and we have yet to see an investigation into what caused the problem and how to fix it.

Translation: This thread is about when dems cause problems, not when repugs do it. Dems need to be investigated, not Repubs.

 

[ProfJohn]

That's the tragedy of all this. People do not realize that it does not matter who is in power, the masters are always the same. But the OP wants to argue for his team...

Actually if I am going to argue anything I am going to argue that the government should not have been involved in the mortgage industry to begin with.

One of the reasons we ended up with such a disaster is that the Federal government backed up mortgages with tax payers money. This took risk out of the system and led people to make bad loans knowing that if they went bad the US government would help cover some of their losses.

You can place a lot of blame for our housing bubble on our governments interference in the free market system:
Fannie and Freddie made more money available to loan. The Fed kept interest rates low making loans 'cheap.' Clinton & Bush pushed home ownership encouraging people who may not have been qualified to buy any way. Groups like Acorn sued banks to prevent 'redlining' and in many cases essentially harassed banks into loaning money to low income people who could not actually afford the homes they were buying.

BTW the free market is not blameless either, it took all the above and ran with it, especially in the case of sub prime loans and variable APR rates that were almost guaranteed to cause a default if rates ever rose.

 

[Dari]

Actually if I am going to argue anything I am going to argue that the government should not have been involved in the mortgage industry to begin with.

One of the reasons we ended up with such a disaster is that the Federal government backed up mortgages with tax payers money. This took risk out of the system and led people to make bad loans knowing that if they went bad the US government would help cover some of their losses.

You can place a lot of blame for our housing bubble on our governments interference in the free market system:
Fannie and Freddie made more money available to loan. The Fed kept interest rates low making loans 'cheap.' Clinton & Bush pushed home ownership encouraging people who may not have been qualified to buy any way. Groups like Acorn sued banks to prevent 'redlining' and in many cases essentially harassed banks into loaning money to low income people who could not actually afford the homes they were buying.

BTW the free market is not blameless either, it took all the above and ran with it, especially in the case of sub prime loans and variable APR rates that were almost guaranteed to cause a default if rates ever rose.

Fannie and Freddie may have over-stayed their visit by several decades but regulation would not be so bad if it wasn't for the endemic corruption and revolving door between industries and Washington D.C.. When people try to do the right thing in Washington they get squashed, transferred, fired, or worse. It's all because all the assholes are only thinking for themselves and doing the bidding of their masters.

 

[Patranus]

Fannie and Freddie may have over-stayed their visit by several decades but regulation would not be so bad if it wasn't for the endemic corruption and revolving door between industries and Washington D.C.. When people try to do the right thing in Washington they get squashed, transferred, fired, or worse. It's all because all the assholes are only thinking for themselves and doing the bidding of their masters.

And there is the exact reason government shouldn't be in much of what it is in now. Much of the current mess can be attributed to 70 years of policies FDR forced on this country by threatening to stack the supreme court.

 

[Jhhnn]

Nice spin from Wallison, formulated by one of the best rightwing spin tanks in the business, the AEI.

But, of course, PJ tries to finger Dems, when that's not what Wallison offered, at all-

"Lax regulation of Fannie Mae and Freddie Mac led to the mortgage companies taking on too many risky loans, Wallison said."

Huh. So, uhh, who was running the executive branch during the time in question? You know, the guys who appoint and direct the regulators?

Who made the "Ownership Society" a cornerstone of their 2004 re-election campaign? Who directed HUD, the GSE's regulator, to demand that the GSE's underwrite more and more "affordable" sub-prime loans?

Whose banking regulators posed for this pic in 2003?

http://economicsofcontempt.blogspot.com/2008/03/cutting-through-red-tape-with-chainsaw.html

Who invoked a civil war era statute to prevent states from regulating banks?

Listening to PJ, you'd think it was a Democrat...

Investigate the GSE's? Why, other than as a red herring, an obfuscation?

Too big to regulate? What a magnificent bit of spin. The Bush Admin never even tried, other than forcing them to buy more and more shaky loans...

 

[MotF Bane]

Taxpayers fucked by government actions. More at 11.

 

[Jhhnn]

Taxpayers fucked by government actions. More at 11.

Pretty simplistic, which is not surprising, considering the source.

Follow the money to find the source of the problem. The Bush Admin and other deregulation advocates set up the GSE's and the taxpayers for exploitation by predatory capitalism, aided and abetted the process.

As usual, Righties are willingly being exploited by the same sources and methods used to loot the treasury.

 

[Robor]

Why dont you start a thread on those topics.

Because there are already numerous threads on those topics - just like this one. Why did you feel the need to make another? More finger pointing maybe?

Translation: This thread is about when dems cause problems, not when repugs do it. Dems need to be investigated, not Repubs.

Exactly.

 

[Robor]

And there is the exact reason government shouldn't be in much of what it is in now. Much of the current mess can be attributed to 70 years of policies FDR forced on this country by threatening to stack the supreme court.

Wow, I know you dishonest right wing hacks like to lay the blame on Clinton and Carter for modern problems but going back to FDR? Bravo!

 

[Jhhnn]

Because there are already numerous threads on those topics - just like this one. Why did you feel the need to make another? More finger pointing maybe?

PJ is just exercising the usual rightwing methodology- If you're going to lie, make it a big one, repeat relentlessly until it's perceived to be the truth.

Leo Strauss Poli-Sci 101.

 

[MotF Bane]

Pretty simplistic, which is not surprising, considering the source.

Follow the money to find the source of the problem. The Bush Admin and other deregulation advocates set up the GSE's and the taxpayers for exploitation by predatory capitalism, aided and abetted the process.

As usual, Righties are willingly being exploited by the same sources and methods used to loot the treasury.

That isn't deregulation. Government apologist, but that's not surprising, considering the source.

 

[Jhhnn]

Don't be a twit, MotF Bane. They only deregulated it far enough to exploit it, quite by design.

Prior to the exploits under the Bush Admin, the GSE's were quite successful in providing homeownership to millions of families. Those loans and securities are not the source of current difficulties, at all.

 

[IGBT]

Ask Barney the Frank. he's the one who scams both.

 

[Darwin333]

This thread is NOT about the 'entire picture' but is about Fannie and Freddie.

We have had tons of threads about the 'entire picture' and placed lots of blame on everyone.

However the issue of Freddie and Fannie is still out standing. The US tax payers are being handed a huge bill due to the improper management of these two companies and we have yet to see an investigation into what caused the problem and how to fix it.

By the way, we already guaranteed to backstop $400B ($200B each) before the bill you posted passed. The real frightening part of the Freddie/Frannie deal passed on Christmas Eave (bet there was a reason it was passed on Christmas Eave) is the fact that we are now guaranteeing $5,000,000,000,000 or $5 TRILLION worth of Freddie and Fannie mortgage backed securities. If they thought that the true loss would be $400B I can't imagine why they would need to backstop ALL of it versus a slight raise (hell, lets call it a clean doubling) of the previous $400B cap. Listening to them pump the housing market you would wonder why this would be necessary at all.

Not to mention the multi-million dollar bonuses that have been approved for the execs at Freddie and Fannie. I haven't heard much on that one either.

Shrug, we don't want to talk about that though. We just want to talk about how the Democrats or the Republicans are responsible for all of it.

 

[Patranus]

By the way, we already guaranteed to backstop $400B ($200B each) before the bill you posted passed. The real frightening part of the Freddie/Frannie deal passed on Christmas Eave (bet there was a reason it was passed on Christmas Eave) is the fact that we are now guaranteeing $5,000,000,000,000 or $5 TRILLION worth of Freddie and Fannie mortgage backed securities. If they thought that the true loss would be $400B I can't imagine why they would need to backstop ALL of it versus a slight raise (hell, lets call it a clean doubling) of the previous $400B cap. Listening to them pump the housing market you would wonder why this would be necessary at all.

Not to mention the multi-million dollar bonuses that have been approved for the execs at Freddie and Fannie. I haven't heard much on that one either.

Shrug, we don't want to talk about that though. We just want to talk about how the Democrats or the Republicans are responsible for all of it.

I guess that is what happens when one of Obamas "former" economic advisers was the CEO.

I guess that is what Obama mean when he said no lobbyists in his administration.

Thank you Mr. Raines for your wonderful service to this nation.

 

[squirrel dog]

come on 2010 / 2012 elections .

 

[fskimospy]

For the zillionth time, Fannie and Freddie comprised a small portion of the total subprime lending. If you want to blame them for participating, that's all well and good. In fact I encourage it. The ongoing attempts to put government at the root of the housing bubble by some people on here (I'm looking at you pro-jo) is simply dishonest denial of reality. Look at the percentage of the subprime market that Fannie and Freddie dealt with.

 

[fskimospy]

come on 2010 / 2012 elections .

Trust me, you don't want the 2012 election to come. You're going to be horribly disappointed when Obama wins in a landslide. Not only is the cycle of the economy most likely to be with him, but demographic shifts strongly favor Democrats as well.

 

[ProfJohn]

Pretty simplistic, which is not surprising, considering the source.

Follow the money to find the source of the problem. The Bush Admin and other deregulation advocates set up the GSE's and the taxpayers for exploitation by predatory capitalism, aided and abetted the process.

As usual, Righties are willingly being exploited by the same sources and methods used to loot the treasury.

Would you care to post some evidence for the above??

Here are some facts:
1. Fannie and Freddie were run by Democrat appointees through most of the decade.
2. Fannie and Freddie gave overwhelmingly to Democrats, it is not even close.
3. A few Republicans tried to introduce some reform and EVERY Democrat on the banking committee objected.
4. Bush spoke about problems at Freddie and Fannie all the way back in 2002.

 

[Xellos2099]

It might be true that Fannie and Freddie was only part of the problem. However, a lot of banks follow their example thinking if a government endorsed entity is doing it, we are probably safe to do it too and this mind set escalate the problems to the point where it nearly destroy the world economy.

You can call this it is the greed of men who caused this. Also, compare this to the money that was spend on war is like comparing apple to orange. The money we spend on war pass the Congress while the housing financial meltdown nearly bring the world's economy to its knee.

 

[Jhhnn]

Would you care to post some evidence for the above??

I already did.

 

[ProfJohn]

I already did.

A Paul Krugman editorial is your 'evidence' ??

Kind of weak, especially since we are talking about Fannie and Freddie. Perhaps you can find something that related directly to them?

 

[Jhhnn]

A Paul Krugman editorial is your 'evidence' ??

Kind of weak, especially since we are talking about Fannie and Freddie. Perhaps you can find something that related directly to them?

Heh. this isn't the first time the subject of the GSE's has been raised, and it gets tedious refuting the lies and obfuscations over and over again. Apparently, repeating them ad nauseum isn't tedious at all, as your repeated attempts illustrate rather plainly.

This thread, post #25-

http://forums.anandtech.com/showthread.php?t=2037386&highlight=jhhnn

That information and a lot more has been posted repeatedly, but the ability to be deliberately obtuse shines through again and again in threads like your own...

 

[rudder]

For the zillionth time, Fannie and Freddie comprised a small portion of the total subprime lending. If you want to blame them for participating, that's all well and good. In fact I encourage it. The ongoing attempts to put government at the root of the housing bubble by some people on here (I'm looking at you pro-jo) is simply dishonest denial of reality. Look at the percentage of the subprime market that Fannie and Freddie dealt with.

Purchasing 40% of the subprime mortgage backed securities is a small portion? Don't you feel at all that this amount would lead to less oversight by lenders because they knew with Fannie and Freddie buying up more than a small portion there was a good market for these loans?

And what the hell... capping bank CEO pay... while allowing the CEO's of Fannie Mae and Freddie Mac to do quite nicely...

http://www.breitbart.com/article.php?id=D9CPR7QG0&show_article=1

 

[Vic]