Democrats created Fannie Mae and Freddie Mac mess then stopped reforms

[losturmarbles]

where did i say bush sucks
still waiting for any evidence of anyting you say

thanks

[ryanXL977]

im sure you are confused
go back and read the thread and show me any evidence of your declarations about me or what i believe

[losturmarbles]

what did i declare about you or what you believe?

[ryanXL977]

lets see, you said

A: all i say is bush sucks, end of story. yet i said nothing at all regarding bush sucking or making any judgement at all on the person.
b: told me i am al iberal cheerleader, go ahead and show me where i said anything of the sort

saying things with no evidence is like that jackass cloak and dagger. you are smarter than he is, i though!

[losturmarbles]

14 of the last 16 years under a gop congress
8 years under a gop president

and yet its the dems fault

hilarioous

where have you been the last 8 years dude?

this guy is still debating if bush is the best president ever, or second after lincoln
why even bother

this is bush's war
plain and simple

... the last 8 years have pretty much ended any debate

ok i didn't quote you before, so let me apologize for generalizing your comments into "bush sucks, game over".

so let me repost my query then:

ryanxl- why do you never argue the point, instead you dismiss it and make arbitrary comments as listed above.

[ryanXL977]

there is no argument to be had. its over. the trickle down debate, the war debate. the debates are done. and if someone wants to debate those, then they are not going to be convinced by a human being on earth

there is no debate that 2+2=4 . it does.
you guys can sit around and debate if 2+2 = 37 all you want.

[ms61853]

First off, Obama is not in a financial committee. He is in committees for foreign affairs, homeland security, health, and veteran's affairs. How exactly would he be involved in banking and investment oversight and regulation?

Maybe you should tell him that:

Obama Says The U.S. Senate Banking Committee Is "My Committee."<b> Obama: "Just this past week, we passed out of the U.S. Senate Banking Committee, which is my committee, a bill…"</b> (Obama Press Conference, Sderot, Israel, July 23, 2008)

[MonkeyF0cker]

Your comeback is a slip of words? Figures. It was his BILL he was referring to that was passed by the Banking Committee. He said committee rather than bill. Shocking. Keep it up, ms. You continuously look more and more retarded with each passing post.

[ms61853]

Your comeback is a slip of words? Figures. It was his BILL he was referring to that was passed by the Banking Committee. He said committee rather than bill. Shocking. Keep it up, ms. You continuously look more and more retarded with each passing post.

<b>which is my committee</b>?


He definitively called it his committee. Either he is so out of touch with what Committees he serves on he doesn't know which ones he does or he is lying (both are equally likely).

So why is he out on the campaign trail now acting like he knows jack shit about any of this? And what knowledge or accomplishments has he ever demonstrated on any committee?

Face it, your messiah is an empty suit Marxist who can't do anything other than convince minds full of mush he is the chosen one.

[ryanXL977]

is saying there were wmds a lie? is saying you would fire anyone responsible for leaking a cia agents identity a lie? how do you pick and choose which lies are lies and which ones you make excuses for?

[ms61853]

is saying there were wmds a lie? is saying you would fire anyone responsible for leaking a cia agents identity a lie? how do you pick and choose which lies are lies and which ones you make excuses for?

WMDs? You tell me:

"If Saddam rejects peace and we have to use force, our purpose is clear. We want to seriously diminish the threat posed by Iraq's weapons of mass destruction program."

--President Bill Clinton, Feb. 17, 1998

"Hussein has ... chosen to spend his money on building weapons of mass destruction and palaces for his cronies."

-- Madeline Albright, Clinton Secretary of State, Nov. 10, 1999

"We know that he has stored secret supplies of biological and chemical weapons throughout his country."

-- Al Gore, Sept. 23, 2002

"In the four years since the inspectors left, intelligence reports show that Saddam Hussein has worked to rebuild his chemical and biological weapons stock, his missile delivery capability, and his nuclear program. He has also given aid, comfort, and sanctuary to terrorists, including al Qaeda members ... It is clear, however, that if left unchecked, Saddam Hussein will continue to increase his capacity to wage biological and chemical warfare, and will keep trying to develop nuclear weapons."



-- Sen. Hillary Clinton (D, NY), Oct 10, 2002


And Bush never knew that Richard Armitage was the source of the leak to Novak. Not sure he actually had the authority to summarily fire him anyway.

[ryanXL977]

i dontneed copy and paste
those men didnt start the trilion dollar was. i dont care what they said or didnt say

again, answer the questions

you are a great parrot though!

[ms61853]

those men didnt start the trilion dollar was.

They didn't?

http://hnn.us/articles/1282.html

[ryanXL977]

https://www.dontbelieveyourlyingeyes.com

[MonkeyF0cker]

<b>which is my committee</b>?


He definitively called it his committee. Either he is so out of touch with what Committees he serves on he doesn't know which ones he does or he is lying (both are equally likely).

So why is he out on the campaign trail now acting like he knows jack shit about any of this? And what knowledge or accomplishments has he ever demonstrated on any committee?

Face it, your messiah is an empty suit Marxist who can't do anything other than convince minds full of mush he is the chosen one.

Once again, genius, it was his bill. He accidentally said the wrong word. How stupid are you? How plainly do I need to spell it out for you? I know you're slow, but c'mon... And just because you aren't in a committee doesn't mean you don't have to be knowledgable on the issues, Einstein. You still need to vote on any legislation sent to the floor. Talking to you is like talking to six year old with Alzheimer's.

[ryanXL977]

nothing is more dangerous than stupid people who think they are smart

see: 2000-2008

[mathdotcom]

Fannie Mae/Freddy Mac would have worked fine, except for the implicit government backing of its loans. In every other sense, FM/FM were private. But due to the implicit government backing, the cost of risky investments failing was not internalized by FM/FM. In other words, if FM got barreled in, the taxpayer would always barrel them out. But if FM made whopping profits, it got to keep them.

What would you do in that situation where you don't have to deal with the cost of a loss but get to keep the gains from a win? GAMBLE!

Because FM/FM was semi-politicized, the government encouraged it to make loans available to those who obviously couldn't afford them otherwise. This made things even worse. Now it turns out that everyone's assets that are backed by mortgages might not be worth much, since many of these mortgages are likely to be defaulted on.

The mess actually originated in the 70s with LBJ.

[mathdotcom]

An article from 1999 about Clinton administration pressuring fannie mae/mac:

http://query.nytimes.com/gst/fullpage.html?res=9C0DE7DB153EF933A0575AC0A96F958260&sec=&spon=&partner=permalink&exprod=permalink

On LBJ:

http://www.newyorker.com/talk/financial/2008/07/28/080728ta_talk_surowiecki

With a highlight:

It wasn’t until 1968 that Fannie was privatized....The main reason for the change was surprisingly mundane: accounting. At the time, Lyndon Johnson was concerned about the effect of the Vietnam War on the federal budget. Making Fannie Mae private moved its liabilities off the government’s books, even if, as the recent crisis made clear, the U.S. was still responsible for those debts. It was a bit like what Enron did thirty years later, when it used “special-purpose entities” to move liabilities off its balance sheet.



If you guys want real articles on economics, visit http://gregmankiw.blogspot.com,
instead of the rest that everyone posts that have brutal slants one way or the other.

[MonkeyF0cker]

Fannie Mae/Freddy Mac would have worked fine, except for the implicit government backing of its loans. In every other sense, FM/FM were private. But due to the implicit government backing, the cost of risky investments failing was not internalized by FM/FM. In other words, if FM got barreled in, the taxpayer would always barrel them out. But if FM made whopping profits, it got to keep them.

What would you do in that situation where you don't have to deal with the cost of a loss but get to keep the gains from a win? GAMBLE!

Because FM/FM was semi-politicized, the government encouraged it to make loans available to those who obviously couldn't afford them otherwise. This made things even worse. Now it turns out that everyone's assets that are backed by mortgages might not be worth much, since many of these mortgages are likely to be defaulted on.

The mess actually originated in the 70s with LBJ.

Show me one subprime loan in default from the 1970's and also any reference to LBJ as having any legislative or executive power in the 70's and I'll give your post one ounce of credibility...

[Fishhead]

I bought FRE today at 1.81...................hoping for a pop tommorrow.

Any thoughts?

[ms61853]

Once again, genius, it was his bill. He accidentally said the wrong word. How stupid are you? How plainly do I need to spell it out for you? I know you're slow, but c'mon... And just because you aren't in a committee doesn't mean you don't have to be knowledgable on the issues, Einstein. You still need to vote on any legislation sent to the floor. Talking to you is like talking to six year old with Alzheimer's.

I am well aware of your messiah's after the fact talking points. The fact is Hussein Osama isan't actually knowledgeable about anything.

Geez, Mccain is 72 years old and he isn't making excuses for such dumbass statements.

[ryanXL977]

why do you call him messiah
whats that supposed to mean? because i dont want to vote for mccain therefore obama is a messiah? that makes no sense at all

[MonkeyF0cker]

Yeah ok. 7 houses, Pakistan/Iraq border, blah, blah, blah. You're an idiot.

[ryanXL977]

czechoslovakia

[Fishhead]

I bought FRE today at 1.81...................hoping for a pop tommorrow.

Any thoughts?

Nice pop in FRE in after hours.........good to see that.

[MonkeyF0cker]

Speculation says the bill will pass, huh? I hope it doesn't, fishy. I'll be routing against you tomorrow but your money will be right. I don't think they have the spine to reject this again.

[Fishhead]

Speculation says the bill will pass, huh? I hope it doesn't, fishy. I'll be routing against you tomorrow but your money will be right. I don't think they have the spine to reject this again.

Monkey---in all liklihood, I will sell the stock befoire the vote.........if it is up a decent amount.

If it reaches 2.00, I have a 10% one day gain.........I will probably take that.

Having said that, this stock could tank before the market opens.

WHO THE FREK KNOWS.

[MonkeyF0cker]

Hard for it to tank much with the short sale ban in effect. Pretty safe I think...

[mathdotcom]

monker****r.. the link you want is right above ur post.

quote:
It wasn’t until 1968 that Fannie was privatized. (Freddie Mac was created two years later, and was private from the start.) The main reason for the change was surprisingly mundane: accounting. At the time, Lyndon Johnson was concerned about the effect of the Vietnam War on the federal budget. Making Fannie Mae private moved its liabilities off the government’s books, even if, as the recent crisis made clear, the U.S. was still responsible for those debts. It was a bit like what Enron did thirty years later, when it used “special-purpose entities” to move liabilities off its balance sheet.

[Fishhead]

Hard for it to tank much with the short sale ban in effect. Pretty safe I think...

Unless they extend this rule, it ends at midnight on Thursday.

[ryanXL977]

bush makes LBJ look like george washington

[MonkeyF0cker]

Unless they extend this rule, it ends at midnight on Thursday.

Yeah. I just didn't think that would come into play for you as I figured you to dump it either directly before or after the vote on the bailout...

[MonkeyF0cker]

monker****r.. the link you want is right above ur post.

quote:
It wasn’t until 1968 that Fannie was privatized. (Freddie Mac was created two years later, and was private from the start.) The main reason for the change was surprisingly mundane: accounting. At the time, Lyndon Johnson was concerned about the effect of the Vietnam War on the federal budget. Making Fannie Mae private moved its liabilities off the government’s books, even if, as the recent crisis made clear, the U.S. was still responsible for those debts. It was a bit like what Enron did thirty years later, when it used “special-purpose entities” to move liabilities off its balance sheet.

Well. You said the 70's. LBJ did not seek re-election in 1968. Yes, that privatized it and yes, Clinton wanted to offer more mortgages to minorities. But the subprime push came from the banks and lending institutions. It is their mismanagement of risk that brought about this crisis. Giving someone a rope doesn't mean they have to hang themselves.

[JBC77]

http://strategicthought-charles77.bl...e-mae-and.html

A brief history of the Fannie Mae and Freddie Mac mess is in order. Back in the days when a Bank or Savings and Loan approved a home loan, they did so with lending standards that had historically led to only safe loans. They had to because they kept the loan and were responsible if it failed. These standards included 3 major parts.


First, the mortgage payments could be no greater that a set percentage of your income, usually about 40 percent.

Second, a down payment was required of about 10 percent or above so the new owner would immediately have some equity in the home.

Third, A good credit rating was required to prove you had a history of paying your bills.


Some adjustments could be made, for example people that had poor credit could get a loan with a larger down payment so if the loan failed, the bank could still resell the house and cover the loan.

With the well intentioned goal of increasing the level of home ownership in lower income and minority groups, Lenders were encouraged to make home loans that did not meet normal standards with the promise that Freddie Mae and Freddie Mac would buy these loans and the lenders were not responsible if they failed.


The Fannie Mae and Freddie Mac crisis has its roots in the Community Redevelopment Act signed into law during the Carter Administration. President Clinton, influenced by multiculturalism, encouraged it further by dictating where mortgage lenders could lend. Tough new regulations required that lenders increase their lending in high-risk areas where they had no choice but to lower lending standards to make loans that sound business practices had previously rejected. And again, Freddie Mae and Freddie Mac bought these loans, which means taxpayers were ultimately responsible if these loans failed.


As long as home values rise, failed loans could be covered by selling the house. If however, home values fell as they did during and after the 1973 Arab oil embargo when energy prices doubled, just as they have today, these failed loans caused a huge financial impact on Lenders and Freddie Mae and Freddie Mac. The huge increases in energy costs are an indisputable part of this financial crisis.


In 2003 the huge level of risk that Fannie Mae and Freddie Mac had come to represent for both taxpayers and financial institutions was becoming apparent. The Bush Administration attempted to reign in the problem by raising standards for loans that Freddie Mae and Freddie Mac guaranteed. Congressional Democrats blocked this reform so that minorities and low-income groups could continue to buy homes that by most standards they could not really afford.

From the New York Times September 11, 2003


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, and 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.

John McCain saw the huge Freddie Mae and Freddie Mac train wreck coming in 2005 and lead a reform effort to again raise lending standards and protect taxpayers from what could become catastrophic costs from failed loans.

From the Congressional Record:

FEDERAL HOUSING ENTERPRISE REGULATOR REFORM

ACT OF 2005The United States Senate, May 25, 2006

Sen. John McCain [R-AZ]: Mr. President, this week Fannie Mae’s regulator reported that the company’s quarterly reports of profit growth over the past few years were “illusions deliberately and systematically created” by the company’s senior management, which resulted in a $10.6 billion accounting scandal.

The Office of Federal Housing Enterprise Oversight Oversight’s report goes on to say that Fannie Mae employees deliberately and intentionally manipulated financial reports to hit earnings targets in order to trigger bonuses for senior executives. In the case of Franklin Raines, Fannie Mae’s former chief executive officer, OFHEO’s report shows that over half of Mr. Raines’ compensation for the 6 years through 2003 was directly tied to meeting earnings targets. The report of financial misconduct at Fannie Mae echoes the deeply troubling $5 billion profit restatement at Freddie Mac.

For Years I have been concerned about the regulatory structure that governs Fannie Mae and Freddie Mac — known as Government-sponsored entities or GSEs— and the sheer magnitude of these companies and the role they play in the housing market. OFHEO’s report this week does nothing to ease these concerns. In fact, the report does quite the contrary. OFHEO’s report solidifies my view that the GSEs need to be reformed without delay.


These efforts were blocked by Congressional Democrats. Obama never lifted a finger to help any Freddie Mae and Freddie Mac reform effort. Perhaps that’s why Obama received $105,849, Nancy Pelosi $47,000 and Harry Reid $60,500 from Freddie Mae and Freddie Mac lobbyists and John McCain got none.


In a truly amazing insult to our intelligence, Obama campaigns daily on the premise that Bush and McCain are responsible for this mess! If Obama wanted to truly be a bipartisan leader he would distance himself from Nancy Pelosi and Harry Reid who closed down Congress to go on vacation rather than allow any votes on the energy crises, and Barney Frank who fought Freddie Mae and Freddie Mac reform.

It's strange to read the comments in this thread. The stuff you posted is factual and there are people calling you crazy. The democrats put minorities into homes they couldn't afford, thats the bottom line. They weren't responsible for packaging the securities with these bad loans but the root problem began with democratic legislation. The democratic party is the party of minorities....thats who there voters are.

Whats strange is the media and public in general won't ever throw these people under the bus.

They are doing it again, recent legislation meant to stimulate the economy has first time home buyers only required to put 3% down. Your inviting the unqualified.

I'm all for blacks and hispanics becoming home buyers but the democrats under Clinton really dug us a hole by not requiring these people to be more financially sound before taking the step. Look no further than affirmative action. No longer did the job go to the best canidate but employers have mandated quotas to fill. You see the pattern......?

The dems created special rules for society if your a minority. Today it's about being a victim, depending on government to hold your hand. Hard work and being fiscally responsible doesn't even matter. It's what government can do for me. What a shame.

[mathdotcom]

What do you expect from banks, whose objective is to maximize profits?

The solution was not to shield them from the potential costs of their risky decisions.
Obviously they didn't want to go bankrupt, but they feared that result a lot less knowing the government would step in.

If I offer to always pay half your gambling losses, then you won't make wise gambles.