Inv A. DeSoda’s last blog post..The Assassination Smear 2

I was going to mention it, but got busy at work.  Also not mentioned are the GSE subsidies to the tune of 6 billion a year that they receive.  Bottom line, at this point (and in my opinion) the two need to be broken up and sold off in about 10 or 15 sections.  Together they are essentially a harmful monopoly. 

Here is the offending bill, I think, which increased the limits, and here’s your list of house sponsors (it is a bit of an equal opportunity offender bill on both sides of the isle):
Rep Bachus, Spencer [AL-6] – 1/28/2008
Rep Becerra, Xavier [CA-31] – 1/28/2008
Rep Blunt, Roy [MO-7] – 1/28/2008
Rep Boehner, John A. [OH-8] – 1/28/2008
Rep Clyburn, James E. [SC-6] – 1/28/2008
Rep DeLauro, Rosa L. [CT-3] – 1/28/2008
Rep Emanuel, Rahm [IL-5] – 1/28/2008
Rep Frank, Barney [MA-4] – 1/28/2008
Rep Granger, Kay [TX-12] – 1/28/2008
Rep Hoyer, Steny H. [MD-5] – 1/28/2008
Rep Larson, John B. [CT-1] – 1/28/2008
Rep McCrery, Jim [LA-4] – 1/28/2008
Rep Miller, George [CA-7] – 1/28/2008
Rep Obey, David R. [WI-7] – 1/28/2008
Rep Rangel, Charles B. [NY-15] – 1/28/2008

Here is a link to the roll call vote and the senate results for the nays and  no votes (and, surprise, surprise, guess who didn’t vote? McCain voted Yea.)

NAYs —16 Allard (R-CO)
Barrasso (R-WY)
Coburn (R-OK)
Corker (R-TN)
Craig (R-ID)
Crapo (R-ID)
DeMint (R-SC)
Ensign (R-NV)
Enzi (R-WY)
Gregg (R-NH)
Hagel (R-NE)
Inhofe (R-OK)
Kyl (R-AZ)
Murkowski (R-AK)
Sessions (R-AL)
Shelby (R-AL)
Not Voting – 3 Clinton (D-NY)
Nelson (D-NE)
Obama (D-IL)
Do nothing congress except when it comes to wasting the nations money in feel good legislation that turns out to be a boondoggle.

This how this guy got to be the demo-candidate.
 

1. There was some legislation passed a few years ago to encourage banks to lend to riskier borrowers. This was supposed to be a way for low-income people to become home-owners. The idea was that owning a home made people more responsible and that giving them a "hand up" was all that was necessary to get them out of living in subsidized housing.

2. Dropping the prime rate to historic lows flooded the market with cheap cash, and that had to go somewhere.

Combine 1 and 2 and you get a flood of money into risky loans.

Gee, is it really that simple?

CosmicConservative’s last blog post..New campaign slogan

Fannie and Freddie actually held about 10% of their holdings in Alt-A, which is a class between prime and subprime, and has accounted for about 50% of their losses.

Alt-A can be very much like subprime in that often times incomes and credit scores of the borrower are not documented, or there is some other credit risk such as no down payment (100% financing).  From a practical standpoint, there really is no difference between Alt-A and subprime at this stage of the game.

What hurt most is that Fannie and Freddie got into the non-prime game in 2005, so timing was obviously horrible.

This step the government took today absolutely vindicates Palin’s comments. As of now the taxpayer IS holding the bag.

CosmicConservative’s last blog post..A few Palin jokes?

You are absolutely right, there has been an attitude of ‘implied subsidy’ in the Freddie Mac, Fanny Mae situation for some time.  This situation is NOT new, and has been smoldering since about 2002 or longer.

Alan Greenspan in 2004:
“The Fed chairman said both companies, which hold about $2 trillion worth of obligations tied to home mortgages, have grown much faster than their competitors because investors think the federal government will bail them out in a crisis.Mr. Greenspan said this ”implied subsidy” has been a boon to the companies’ shareholders but provided only modest benefits to homebuyers in the form of lower mortgage rates.”
”The scale itself has reinforced investors’ perceptions that in the event of a crisis involving Fannie and Freddie, policy makers would have little alternative than to have taxpayers explicitly stand behind the G.S.E. debt,” Mr. Greenspan said, referring to the debt of ”government sponsored enterprises.”

So while, yes, there is not an ‘absolute’ guarantee, there certainly is an implied one, and people have been treating it as factual, with good reason: the Gov’t will indeed bail them out.

But to call this a "gaffe" is to seriously misunderstand what the term "gaffe" means.

CosmicConservative’s last blog post..The new Republican Election Poster