NationStates Jolt Archive

Yes, I know it's Fox. Yes, I know it's the conservative Canadian network. But even they can be right once in a while. Can't they?

http://www.youtube.com/watch?v=cMnSp4qEXNM&NR=1

Fox is Canadian?

well of course not bush himself, either one of them. raygun, clinton, both bushes, all had a hand in it. even the mentality that created the incentives that created the conditions that made it possible started back in isenhour's day. though admitiedly it was the knee jerk opposition to the gains in civil and environmental consciounsciousness of the 60s and 70s that raygun rode in on the crest of that really got it off to the morass of corruption that shrubery two, was just the mindless culmination of.

Fannie mae and Freddie mac are but one piece of the current mess.

But yes both sides are at fault. On a counter point though a large part of the issue had to do with wanting to prevent expanding powers of the executive branch, which the regulatory laws would have done.

the entire regulate the markets is treating a symptom. You look at LA California where a shack on a plot of land would go for 1 million dollars.
The wages paid in LA did not justify the price of the land. This is caused by too much credit which drives up the land prices as more and more cash chases fewer and fewer plots of land. This is what people mean when they talk about a Bubble. the second credit even hints of drying up it becomes fait accompli as everyone pulls out of the land markets.

the WHOLE THING "is a symptom". a symptom of self deception and misplaced priorities.

a symptom of being so emotionally attached to the circular illogic of symbolic value, excitement, and trying to impress each other, as to not even notice or give a dam, what is or isn't beautiful or rewarding.

Well yes they can be right this notion that Bush is the one to blame for all this is ridiculous and quite frankly pretty simple and inline with the usual rabble of the "we hate Bush club" which seeks to place all blame on him.

the WHOLE THING "is a symptom". a symptom of self deception and misplaced priorities.

a symptom of being so emotionally attached to the circular illogic of symbolic value, excitement, and trying to impress each other, as to not even notice or give a dam, what is or isn't beautiful or rewarding.

Since this was a housing bubble i might argue buying a home doesn't exactly fit that.

I made a thread, about a year ago, saying this sort of stuff. A massive shitstorm ensued, just a warning.

In before shit storm

fixed

http://www.youtube.com/watch?v=_MGT_cSi7Rs&feature=related

Dems claiming there was never a crises.

well of course not bush himself, either one of them. raygun, clinton, both bushes, all had a hand in it. even the mentality that created the incentives that created the conditions that made it possible started back in isenhour's day. though admitiedly it was the knee jerk opposition to the gains in civil and environmental consciounsciousness of the 60s and 70s that raygun rode in on the crest of that really got it off to the morass of corruption that shrubery two, was just the mindless culmination of.

This post is such a tangled web of typos, punctuation problems, epithets and unclear language that I have absolutely no idea what he's talking about.

This post is such a tangled web of typos, punctuation problems, epithets and unclear language that I have absolutely no idea what he's talking about.

Allow me to translate he is saying it is Eisenhower's and Reagan's fault. And the democrats could have done nothing about it.

Ca...na...da?

Ca...na...da?

Your absolutely right it is Canada's fault. We shall invade post haste. We shall force all Canadians on to reservations.

Ca...na...da?

I think they mean the dark and frozen wasteland of socialist potsmoking hippies where government is totalitarian and...and...and...POLAR BEARS EAT ABORTED BABIES!

Allow me to translate he is saying it is Eisenhower's and Reagan's fault. And the democrats could have done nothing about it.

Ahhhhhh.

Cameroi's posts are almost entirely unintelligible--and not in the text-speak way that makes me want to punch people either. Just in a totally mystifying and baffling way that seems to have shed the shackles of basic English.

wow the bush administration was powerless in the face of barney frank even though the republicans controlled congress.

barney is a hell of a man.

wow the bush administration was powerless in the face of barney frank even though the republicans controlled congress.

barney is a hell of a man.

Seriously. This logic is just mind boggling.

I have to say, anyone who blames Bush 100% is foolish.

But anyone who thinks he is absolved of blame is even more so.

Seriously. This logic is just mind boggling.

I have to say, anyone who blames Bush 100% is foolish.

But anyone who thinks he is absolved of blame is even more so.
it would be more convincing if any of the examples they cited occurred after the democrats took control of the house in '07.

otherwise its just revisionist bullshit. CONGRESS didnt want to do anything about franny and freddie. just as they didnt want to do anything about bank regulations.

Old. Fannie and Freddie didn't cause the housing crisis. Even if they had, Oxley and Frank, a republican and a democrat, tried to pass reform in 2005. It got shot down in the Senate.

it would be more convincing if any of the examples they cited occurred after the democrats took control of the house in '07.

otherwise its just revisionist bullshit. CONGRESS didnt want to do anything about franny and freddie. just as they didnt want to do anything about bank regulations.

People get wrongly fixated on fannie and freddie. They really were a bit of a non-event in the whole thing. Sure there was bad things about them (like they were a blatant criminal scheme to defraud the taxpayer, and they were badly run and used to pay favors) but nothing they did really caused the instant mess.

And really the whole fannie freddie thing is LBJs fault anyway. As described that function should never have been taken from the government so as to avoid ripping off the taxpayer.

People get wrongly fixated on fannie and freddie. They really were a bit of a non-event in the whole thing. Sure there was bad things about them (like they were a blatant criminal scheme to defraud the taxpayer, and they were badly run and used to pay favors) but nothing they did really caused the instant mess.

And really the whole fannie freddie thing is LBJs fault anyway. As described that function should never have been taken from the government so as to avoid ripping off the taxpayer.
ya but WHO steers them toward franne and freddie and away from all the other causes of our financial ruin?

im tired of scapegoating one part of the problem in an effort to ...... i dont know.... make other guilty parties look good? ....keep the political contributions flowing?... keep the public from enacting real reform?

Obviously this is not Bush's fault. Hell Bush tried to regulate Fannie and Freddie in 2003. The Democrats stopped that regulation. If they hadn't stopped it, it would have backfired anyway. The crises was mainly caused by Democrats. Housing is a social issue. They wanted everybody to own a home, if they could afford it or not. Obama even sued banks on behalf of ACORN to force them to make subprime loans. And why wouldn't the banks make bad loans of the loans were sold off to Fannie and Freddie with an implied government guarantee? Of course investors bought up the loans by the truckload because there were no defaults. Of course defaults are simply not likely in an ever increasing housing market, just refi with cash out or sell for a massive profit. That led to decreasing lending standards and such things as stated income loans with no credit checks. Liar loans. The Fed helped by keeping rates artificially low. The government helped some more with tax incentives for homeowners. So who gets the biggest share of the blame? The Democrats of course.

Its the fault of no individual, rather its the result of the internal contradictions of the capitalist system.

Have yourself a global free market economy. Self-interested folk want a quick profit. They chase short-term profit, and those who take the most risks get the most rewards while the economy is expanding. You have a boom. People think 'it won't end on my watch', and repeat the behaviour, despite knowing that growth cannot last forever with debts and stupid risks.

Its not a sustainable type of growth. But say you are a politician. Oh look, there's some fast growth. Now, should I intervene to regulate it to ensure we have slower, more stable growth? My term is only four or so years, so if I don't intervene, its probably going to fall down when someone else is in charge. On the other hand, if I intervene in the economy, I introduce greater politicization of economic issues, we have less growth than elsewhere, and people will judge me badly since my involvement means money's flowing out of our economy to places willing to take higher risks.

Now, when the house of cards falls, our politician thinks "I really ought to intervene to do something about this or I'll get voted out". Since we're now intervening in the economy, popular expectations of what the government can/should do rise. But our resources are falling because we're in a recession. If the economy recovers, business says "kthx for fixing our mess, but if you don't give us more freedom, we're leaving", so regulation is decreased. If it doesn't recover, free marketeers pop up and say "its down to this regulation that our economy remains weak" - regulation ends.

Its like the Marxist thesis of ever-increasing boom and bust and overproduction crises translated into a predominantly finance-based advanced economy. Its inherent to the system. To say "politician x" caused it is beside the point. It was always going to happen, and it will happen again. One national leader, even of the United States, could not have stopped it on their own.

ya but WHO steers them toward franne and freddie and away from all the other causes of our financial ruin?

im tired of scapegoating one part of the problem in an effort to ...... i dont know.... make other guilty parties look good? ....keep the political contributions flowing?... keep the public from enacting real reform?

Point taken. But both parties do this to distract while they join hands in secret to continue the looting operations. The reality is that there is no difference between Chris Doss and Richard Shelby, or Tim Geithner and Henry Paulson. The end results are always the same.

The US needs a third party or something because basically both parties are beholden to Wall Street interests. (Though this is how politicians make their money I suppose).

Point taken. But both parties do this to distract while they join hands in secret to continue the looting operations. The reality is that there is no difference between Chris Doss and Richard Shelby, or Tim Geithner and Henry Paulson. The end results are always the same.

The US needs a third party or something because basically both parties are beholden to Wall Street interests. (Though this is how politicians make their money I suppose).
a strong 3rd party would have to take the same money as the current big2.

Its like the Marxist thesis of ever-increasing boom and bust and overproduction crises translated into a predominantly finance-based advanced economy. Its inherent to the system. To say "politician x" caused it is beside the point. It was always going to happen, and it will happen again. One national leader, even of the United States, could not have stopped it on their own.

I would personally take the boom-bust cycle over the kind of consistent underproduction and shortages that inevitably characterize the alternatives to the modern market economy. Unless you halt all technological and financial advancement and all new growth and development, speculative bubbles and their aftermath will be an inevitable series of events. At the same time, these very crises are what make the system stronger; the reason why 2009 isn't a repeat of 1929 and won't be is due to the prior strengthening of regulations and financial transparency, and the lessons learned will then be applied to a new set of regulations designed to better handle the economic changes since then.

a strong 3rd party would have to take the same money as the current big2.

It's not the campaign contributions that's the problem (because although Wall Street money is important for that it's not overwhelming) it's the favors they take while in office that's the problem. DC is super corrupt. It's so bad even Bill Moyers has recognized it as acting like a third world government.

And you wouldn't even need a majority third party. Just one big enough to gum everything up and attenuate the power of the financial services industry. If the government teat was pulled, most of these clowns would go out of business. Hell, if not for Bush and Paulson, Goldman Sachs would be a bad memory now. (Of course, since they didn't they are now borrowing money using the full faith and credit of the US taxpayer so they can continue their gambling operation).

In any event, something has to be done, or the country will literally go bankrupt. It can't go on this way. I'd prefer a peaceful political transition to the alternative.

I would personally take the boom-bust cycle over the kind of consistent underproduction and shortages that inevitably characterize the alternatives to the modern market economy. Unless you halt all technological and financial advancement and all new growth and development, speculative bubbles and their aftermath will be an inevitable event.

I mostly agree. Some sort of global authority and regulatory system for international capital could reduce the scale without some of the harmful effects national action can have (since business can hardly threaten to move to space to escape it). I did not make a claim that another system was better (this goes beyond the scope of this thread). My point is that, regardless of the position you take on whether another economic paradigm is preferable, recognizing the dynamics of the current system is useful to answer the question at hand.

EDIT

At the same time, these very crises are what make the system stronger; the reason why 2009 isn't a repeat of 1929 and won't be is due to the prior strengthening of regulations and financial transparency, and the lessons learned will then be applied to a new set of regulations designed to better handle the economic changes since then

I'm not convinced. The last few decades have seen a widespread decrease in regulation with the rise of neo-liberal economics. And I think when we go back in growth, the spiral down to the lowest reguation will begin anew. Unless there's some external agency imposing regulations from outside, the temptation for a country to race to the bottom to reduce regulation to the minimum and attract in capital is difficult to resist in an increasingly globalized international economy. When the whole economy kickstarts again I worry that the next crash if anything will be worse.

I mostly agree . Some sort of global authority and regulatory system for international capital could reduce the scale without some of the harmful effects national action can have (since business can hardly threaten to move to space to escape it). I did not make a claim that another system was better (this goes beyond the scope of this thread). My point is that, regardless of the position you take on whether another economic paradigm is preferable, recognizing the dynamics of the current system is useful to answer the question at hand.

I agree. Frankly, Marx was pretty good at spotting the challenges to the capitalist system; the problem is that instead of putting his ideas to work in the system, he created an alternative that was inferior in all aspects.

It's not the campaign contributions that's the problem (because although Wall Street money is important for that it's not overwhelming) it's the favors they take while in office that's the problem. DC is super corrupt. It's so bad even Bill Moyers has recognized it as acting like a third world government.

And you wouldn't even need a majority third party. Just one big enough to gum everything up and attenuate the power of the financial services industry. If the government teat was pulled, most of these clowns would go out of business. Hell, if not for Bush and Paulson, Goldman Sachs would be a bad memory now. (Of course, since they didn't they are now borrowing money using the full faith and credit of the US taxpayer so they can continue their gambling operation).

In any event, something has to be done, or the country will literally go bankrupt. It can't go on this way. I'd prefer a peaceful political transition to the alternative.
now all we need is a SANE 3rd party that has broad appeal.

doesnt seem likely does it.

I would personally take the boom-bust cycle over the kind of consistent underproduction and shortages that inevitably characterize the alternatives to the modern market economy. Unless you halt all technological and financial advancement and all new growth and development, speculative bubbles and their aftermath will be an inevitable series of events. At the same time, these very crises are what make the system stronger; the reason why 2009 isn't a repeat of 1929 and won't be is due to the prior strengthening of regulations and financial transparency, and the lessons learned will then be applied to a new set of regulations designed to better handle the economic changes since then.

I don't buy that. The reason 2009 isn't a repeat of 1929 is because the fed (and the treasury to some extent) stepped in to STOP a repeat from happening.

I agree. Frankly, Marx was pretty good at spotting the challenges to the capitalist system; the problem is that instead of putting his ideas to work in the system, he created an alternative that was inferior in all aspects.

From having to read him in politics lessons, he seems to have changed his mind on what a future 'communist' society would look like (in terms of how work would be allocated etc) several times, and never really gave a satisfactory detailed account. The model adopted by supposedly 'communist' countries probably isn't what he meant, but I'm not sure he ever really did properly create an 'alternative' apart from some utopian waffle.

I'm one of those people who was a Marxist until I read Marx.

Yes, I know it's Fox. Yes, I know it's the conservative Canadian network. But even they can be right once in a while. Can't they?

http://www.youtube.com/watch?v=cMnSp4qEXNM&NR=1

No, they can't.

While it's comforting to be able to point the finger of blame, the idea that the housing bubble caused the crisis is naive in the extreme.


We've been in a credit crisis for quite some time, and mortgage credit is only part of that. The fundamental disparity between cost and value has been heading for adjustment for some time. What we have called 'good years' have just been years we've been riding on the back of the unadjusted credit wave. It's been based on nothing (since the actual value backing the credit is so far smaller than the credit itself), and it was inevitable that such a wave was unsustainable indefinitely.

I would personally take the boom-bust cycle over the kind of consistent underproduction and shortages that inevitably characterize the alternatives to the modern market economy.

If you're going to have to construct false dichotomies in order to justify your choices, perhaps your choices aren't genuine.

A mythical person called Joe who managed to get 60 mortgages in 1 day despite never intending to buy a house, having already defaulted on all previous loans of all sizes in his life so far, whos only income was begging for change and was in the process of declaring bankruptcy on that very same day. For the 7th time.

Thats who you should blame

Absolutely everyone who has ever supplied or received a loan that couldn't be serviced, dealt in financial markets and contributed to the false economy.

Now there's my "naive" idea. Let's find a solution. Anyone got any ideas?

We've been in a credit crisis for quite some time, and mortgage credit is only part of that. The fundamental disparity between cost and value has been heading for adjustment for some time. What we have called 'good years' have just been years we've been riding on the back of the unadjusted credit wave. It's been based on nothing (since the actual value backing the credit is so far smaller than the credit itself), and it was inevitable that such a wave was unsustainable indefinitely.

Exactly. And I mean who ever said that the idea that an entire nation could get could be indebted to some company for 20-40+ years was actually a good thing.

wow the bush administration was powerless in the face of barney frank even though the republicans controlled congress.

barney is a hell of a man.

Id imagine it would be the same showing that Clinton's health care reform got.
Which was they looked at the divide in the senate realized they couldn't over come a filibuster if it happened and decided to save the big show downs for matters.
Just because you have the presidency and congress doesn't make you god of country.

I know this thread is old, but I'm bumping it anyway. That whole economy thing is pretty important these days. Fox News pretty much goes straight for Barney Frank's throat in the OP's clip. So here's Barney Frank's response, straight from the horse's mouth. It's worth watching it from part 1 to the end if you have the time, or reading the transcript.
http://www.youtube.com/watch?v=42PojF6GLRg&feature=channel
Now, it is true in 2003 I did say at a hearing that I did not think Fannie Mae and Freddie Mac faced a crisis. I did not think they did at the time. I didn't think Wachovia did at the time. I didn't think Merrill Lynch faced one at the time, or AIG or a number of other financial institutions that have failed even more spectacularly than Fannie Mae and Freddie Mac. That didn't mean I wasn't for some regulation. I didn't think they faced a crisis.

But I changed my mind a year later because, in 2004, as is made clear in an excellent book by Mark Zandi – Mr. Zandi is one of our best economists. He's level-headed. He's advised President Obama. He's advised John McCain. He wrote a book called Financial Shock: A Look at the Sub-Prime Mortgage Implosion.'

And here's what he said happened. He said Clinton started on homeownership for low-income people. “President Bush readily took up the baton at the start of his administration. Owning a home became one pillar of his ownership society. To reinforce this effort, the Bush administration” -- once again, my secret power at work – “put substantial pressure on Fannie Mae and Freddie Mac to increase their funding of mortgage loans to lower income groups.”

So, yes, I didn't think they were in crisis in 2003. In 2004, the Bush administration, according to Mr. Zandi's book, put pressure on them to increase this.

“OFHEO” – the Bush-controlled regulator – “set aggressive goals for the two giant institutions. By the time of the subprime financial shock, both had become sizeable buyers of these securities.”

Now, I didn't think that was a good idea. Let me quote from the Bloomberg News Service, Mr. James Tyson, who used to cover financial news. This is from 2004, June 17. As Mr. Zandi noted, it was the Bush administration that pushed Fannie and Freddie, a year after I said they weren't in crisis.

“’Fannie Mae and Freddie Mac would suffer financially under a Bush administration requirement that they channel more mortgage financing to people with low incomes,’ said the senior Democrat on the congressional panel that sets regulations.” That was me. I was by then the senior Democrat, still in the minority. “The rule compelled the companies to put 57 percent of their financing towards homes for people with incomes no greater than the median income. The White House ‘could do some harm if you don't refine the goals,’ said Representative Barney Frank. Frank’s comments echo concerns that the new goals will undermine profits and put new homeowners into dwellings they can't afford.”

Yes, I thought this was a bad idea. I didn't think giving people loans that they couldn't pay back was a good idea. It wasn't we, Democrats and liberals, who were pushing loans to low-income people. It was, as Mr. Zandi said, as Bloomberg said, the Bush administration because they wanted homeownership. By the way, that was part of an overall policy in which they cut funding for affordable rental housing.

And throughout, my difference with them has been that I wanted affordable rental housing. Yes, in that 2003 quote I said I was worried that Fannie Mae and Freddie Mac would cut back on affordable housing, and in our language that we use in the housing area, affordable housing is rental housing. I tried to get Fannie Mae and Freddie Mac not to buy bad subprime mortgages but, if they had profits, to put some of them into affordable rental housing.

So, yes, in 2004, I got worried that they were, as Mr. Zandi said, as the Bloomberg News said, putting people into low-income housing.

Around that time, I had a discussion with Alphonso Jackson, the Bush Secretary of HUD. He said he wanted to cut people off the rental housing assistance program after 5 years, the section 8 program whereby you help people rent housing. He said, “What do you think?” I said, “Well, if you can stop them from being poor after 5 years that would be perfectly sensible.” He said, “No, no, be serious. Why aren't you for it?” I said, “Mr. Secretary, what will happen to some of these people who can't afford to rent if you cut off their rent supplement after 5 years?” He said, “I will help them become homeowners.”

This was the Bush social policy. This was their compassionate conservatism. They were the ones pushing this, not CRA because it wasn't the banks doing it. Fannie Mae and Freddie Mac were doing it at the orders of the Bush administration.

So, in 2005, I did agree now, given this, that it was time to regulate Fannie Mae and Freddie Mac, and I joined Mr. Oxley, the chairman of the committee who tried to do it in 2003 and was stopped by the Bush administration and in 2005, Mr. Oxley began again a bill to regulate Fannie Mae and Freddie Mac.

It passed the Committee on Financial Services, of which I was the senior Democrat still, by 65-5. That was the bill Mr. Oxley put out. Five Republicans voted against it. They were on the Bush side; it didn't go far enough. But 28 Republicans voted for it, with all the Democrats. So 65-5, the bill passed the House in 2005 to regulate Fannie Mae and Freddie Mac.

It's been argued that, oh, yeah, but the bill was too weak because at the markup session, the committee vote, Democrats blocked good amendments. Let me be very clear. I’ve checked the record – I have the record here. I'm going to put it into the Congressional Record. No amendment at that session on the committee vote which received a majority of Republican votes was defeated. Some Republicans were defeated, but they had a minority of Republican votes. A majority of Republicans carried the day on every vote. There were two efforts to try and tighten it. They were both defeated against the chairman's wishes, with a majority of Republicans against them on both sides.
From the transcript
http://www.house.gov/frank/great-economic-hole.html

So, Fox News down?

Yah, Frank's hands are pretty dirty on this one. He actually voted against increased regulation in 2005. And did nothing when he assumed the chair of the financial services committee. He was warned, clearly, along with everyone else that fan/fred were manipulating accounting and earnings, were not subject to Sarbox &c, and dismissed it anyway. I think also he was still living with Herb Moses at that time, so he was hardly a disinterested party.

Now, is he being unfairly singled out by Fox? Sure. And there are lots of republicans that deserve the same treatment too. But I think he's totally fair game since he's been rather vocal about his complete 'innocence'.

Yah, Frank's hands are pretty dirty on this one. He actually voted against increased regulation in 2005.Well, he voted for it in committee. And did nothing when he assumed the chair of the financial services committee.That's not true, they passed new regulation in the house in 2007, the same year he got the chairmanship and it finally passed in 2008. He was warned, clearly, along with everyone else that fan/fred were manipulating accounting and earnings, were not subject to Sarbox &c, and dismissed it anyway. I think also he was still living with Herb Moses at that time, so he was hardly a disinterested party. According to wikiFrank's former partner, Herb Moses, was an executive at Fannie from 1991 to 1998, where Moses helped develop many of Fannie’s housing and home improvement lending programs. In 1991, Frank pushed for reduced restrictions on two- and three-family home mortgages. During the time that Frank was in a relationship with Moses, he blocked tougher regulations on the banking companies while voting for the Government Sponsored Housing Enterprises Financial Safety and Soundness Act of 1991 and the Housing and Community Development Act of 1992.[51] Frank and Moses' relationship ended around the same time Moses left the company.[52]

Now, is he being unfairly singled out by Fox? Sure. And there are lots of republicans that deserve the same treatment too. But I think he's totally fair game since he's been rather vocal about his complete 'innocence'.
I think it's fair to criticize him. He deserves some credit for complaining in 2004. Should he have been calling for reform in 2003 and before? In retrospect, absolutely. Even in 2004 and after, should he have been complaining more loudly? Absolutely. I just think that if people want to criticize, it has to be based in reality and it has to be a two way street, so you blame everyone who deserves it.

My mistake on the Herb thing.

To be honest, I tend to look at the 2008 reform as forced upon the government by circumstances (hence the work outs, the $300 billion dollar credit line, and raising the conforming limit). And I don't think anyone of either party has covered themselves with glory over the past couple of years. I'm not even sure if you could really describe what happened as regulation.

And what I meant by nothing was the fact that it was abundantly clear by the end of Jan. 2007 that there was a mortgage crisis, and as it unfolded the government's reaction was to try and prop up the banking system by throwing the GSE's in the pool as lifeguards to a certain extent. Really, it should have been front burner to try and maintain their integrity, instead of using them as a garbage disposal. (And let's not forget what countrywide was allowed to do the FHLB by entities like countrywide).

Nobody has covered themselves in glory here. And frank should be held accountable.

Though I agree that everyone else should get it too, and people shouldn't make things up.

My mistake on the Herb thing.

To be honest, I tend to look at the 2008 reform as forced upon the government by circumstances (hence the work outs, the $300 billion dollar credit line, and raising the conforming limit). And I don't think anyone of either party has covered themselves with glory over the past couple of years. I'm not even sure if you could really describe what happened as regulation.Yup, by the time democrats took congress, it was way too late to start reform.

And what I meant by nothing was the fact that it was abundantly clear by the end of Jan. 2007 that there was a mortgage crisis, and as it unfolded the government's reaction was to try and prop up the banking system by throwing the GSE's in the pool as lifeguards to a certain extent. Really, it should have been front burner to try and maintain their integrity, instead of using them as a garbage disposal.How do you mean, exactly?

Ca...na...da?

Island to the southwest of Narnia.

How do you mean, exactly?

The market for residential mortgage backed securities collapsed in dec 2006. The policy response was to use the GSEs and government entities to bridge the gap. (This was the subprime is contained moment).

2007 mortgages are the worst.

I tend to think the the FSC should have stepped in straight away to address this, rather than trying to smooth over the problem with the private sector by using the GSEs to maintain the unrealistic pace of mortgage originations. I don't know if it would ultimately have saved the GSEs but it couldn't have hurt.

Of course, I hold Henry Paulson and Bernanke just as responsible for flat out lying about it.

From having to read him in politics lessons, he seems to have changed his mind on what a future 'communist' society would look like (in terms of how work would be allocated etc) several times, and never really gave a satisfactory detailed account. The model adopted by supposedly 'communist' countries probably isn't what he meant, but I'm not sure he ever really did properly create an 'alternative' apart from some utopian waffle.

I'm one of those people who was a Marxist until I read Marx.

I'm just of the mind that he's too determinist, out and out.

The market for residential mortgage backed securities collapsed in dec 2006. The policy response was to use the GSEs and government entities to bridge the gap. (This was the subprime is contained moment).

2007 mortgages are the worst.

I tend to think the the FSC should have stepped in straight away to address this, rather than trying to smooth over the problem with the private sector by using the GSEs to maintain the unrealistic pace of mortgage originations. I don't know if it would ultimately have saved the GSEs but it couldn't have hurt.
Well, maybe it was a mistake, but I can see where they're coming from. They were trying to prevent foreclosures and falling home prices and keep the credit markets from freezing. The government was trying to use every gun in its arsenal at that point, and it's hard to tell whether it would have been worse or not. That's the problem with hypotheticals.
I'm skeptical of the idea, though, that Fannie and Freddie could have been saved or that they could have survived in their private form if the government had just stayed hands off during 2006 and after. They were eventually going to be taking huge losses anyway. You can see it just in the sheer amount of cash we've infused in them since they were nationalized. We initially offered up to $100 billion in each of them. In addition to the government conservatorship, which CBO estimates will increase the federal government's net liabilities by $238 billion, several government agencies have taken steps to increase liquidity within Fannie Mae and Freddie Mac. Among these steps includes:[33]

1. Federal Reserve purchases of $23 billion in GSE debt (out of a potential $100 billion) and $53 billion in GSE-held mortgage backed securities (out of a potential $500 billion).
2. Federal Reserve purchases of $24 billion in GSE debt.
3. Treasury Department purchases of $14 billion in GSE stock (out of a potential $200 billion).
4. Treasury Department purchases of $71 billion in mortgage backed securities
5. Federal Reserve extension of primary credit rate for loans to the GSEs


Of course, I hold Henry Paulson and Bernanke just as responsible for flat out lying about it.
Of course they're going to lie. How else would they restore confidence?

Time to double down http://online.wsj.com/article/SB124178775264900689.html#mod=rss_whats_news_us
Fannie Mae's first-quarter loss ballooned on surging credit losses as the company and the Treasury Department reached agreement on a deal that doubled the government's support level to $200 billion...

Fannie requested another $19 billion Wednesday, which if approved through a preferred-stock purchase would put the total given by the government at $35.2 billion. The stock pays a 10% yield...

Fannie reported a first-quarter loss of $23.2 billion, or $4.09 a share, compared with $2.2 billion or $2.57 a share, a year earlier. The red ink, though, did narrow from the fourth quarter's $25.2 billion.Fannie reported a first-quarter loss of $23.2 billion, or $4.09 a share, compared with $2.2 billion or $2.57 a share, a year earlier. The red ink, though, did narrow from the fourth quarter's $25.2 billion...