Democrats on Fannie and Freddie, in their own words.
Hard to believe this ad isn’t running all over.
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Defending the liberal tradition in history, science, and philosophy.
Democrats on Fannie and Freddie, in their own words.
Hard to believe this ad isn’t running all over.
{ 4 comments }
While I don’t doubt that FNMA and FHLMC contributed to our financial problems, I can’t draw a conclusion about how important they were without knowing the numbers. For one thing not all sub-prime mortgages were issued to people with below-average incomes and I don’t know what proportion of those were issued under the Congressional urging.
You might want to look into the totally unregulated market for Credit Default Swaps (CDS). Phil Gramm attached an amendment to the Commodities Future Modernization Act that created this totally unregulated market.
CDSs are a way of betting if bonds or mortgages will default. In September of this year Christopher Cox, the chairman of the SEC, estimated the total world wide market in CDSs at $58 trillion. As a point of reference, the US GDP is around $14 trillion. Cox also described the CDS market as "completely lacking in transparency and completely unregulated."
Now do you seriously think that Bear Sterns, Lehman Brothers, AIG, and basically every bank in the western world was brought down because some poor people defaulted on their mortagages. Perhaps you should look into who lost their pants speculating in CDS.
Shrug. Watch the video.
It’s plain as day that Repubs were sounding an alarm over the practices at Fannie and Freddie, and Dems insisted there was no problem. Now we’re forced to bail them both out. It’s not difficult to assign blame here, however much extraneous chaff lefties try to throw around to confuse the issue.
Shrug. Watch the video.
I did. This is an ad put together by the Nation Republican Congressional Committee. That hardly qualifies it as a fair and balanced treatment of the issue.
The truth is that many Republicans pushed Fannie and Freddie to buy more subprime MBS as part of the plan for the ownership based society. Many of those statements in the video were true at the time they were made, Fannie and Freddie were in very sound condition. In 2005-2006 Republicans were in control of the House, Senate and White House, and they did nothing about tightening the regulation of Fannie and Freddie because they wanted to promote home ownership and they were taking money form lobbyist for the real estate and mortgage industry too.
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