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The story below is making the rounds today.
George Will also wrote a column about the their politicizing.
There is plenty of blame to go around. Bush didn't cause the mess, but he didn't do a whole lot to stop it. Bush probably was not anxious to slow the economy down. If Bush gets the blame in the media, McCain doesn't want to look like he is protecting Bush.
Clinton was on Letterman last nite, gave a fairly even handed explanation (did not mention "Bush"), but he left out the part about the Democratic goals of giving mortgages to people who could not qualify for regular loans.
I'd like to see a few of those jokers do the perp walk.
BTW, Neil Bush was supposed to be the star of the Bush brothers, but his bank bailout 20 yrs ago cost the US about $1 billion.
Sigh.




How the Democrats Created the Financial Crisis: Kevin Hassett


Sept. 22 (Bloomberg) -- The financial crisis of the past year has provided a number of surprising twists and turns, and from Bear Stearns Cos. to American International Group Inc., ambiguity has been a big part of the story.

Why did Bear Stearns fail, and how does that relate to AIG? It all seems so complex.

But really, it isn't. Enough cards on this table have been turned over that the story is now clear. The economic history books will describe this episode in simple and understandable terms: Fannie Mae and Freddie Mac exploded, and many bystanders were injured in the blast, some fatally.

Fannie and Freddie did this by becoming a key enabler of the mortgage crisis. They fueled Wall Street's efforts to securitize subprime loans by becoming the primary customer of all AAA-rated subprime-mortgage pools. In addition, they held an enormous portfolio of mortgages themselves.

In the times that Fannie and Freddie couldn't make the market, they became the market. Over the years, it added up to an enormous obligation. As of last June, Fannie alone owned or guaranteed more than $388 billion in high-risk mortgage investments. Their large presence created an environment within which even mortgage-backed securities assembled by others could find a ready home.

The problem was that the trillions of dollars in play were only low-risk investments if real estate prices continued to rise. Once they began to fall, the entire house of cards came down with them.

Turning Point

Take away Fannie and Freddie, or regulate them more wisely, and it's hard to imagine how these highly liquid markets would ever have emerged. This whole mess would never have happened.

It is easy to identify the historical turning point that marked the beginning of the end.

Back in 2005, Fannie and Freddie were, after years of dominating Washington, on the ropes. They were enmeshed in accounting scandals that led to turnover at the top. At one telling moment in late 2004, captured in an article by my American Enterprise Institute colleague Peter Wallison, the Securities and Exchange Comiission's chief accountant told disgraced Fannie Mae chief Franklin Raines that Fannie's position on the relevant accounting issue was not even ``on the page'' of allowable interpretations.

Then legislative momentum emerged for an attempt to create a ``world-class regulator'' that would oversee the pair more like banks, imposing strict requirements on their ability to take excessive risks. Politicians who previously had associated themselves proudly with the two accounting miscreants were less eager to be associated with them. The time was ripe.

Greenspan's Warning

The clear gravity of the situation pushed the legislation forward. Some might say the current mess couldn't be foreseen, yet in 2005 Alan Greenspan told Congress how urgent it was for it to act in the clearest possible terms: If Fannie and Freddie ``continue to grow, continue to have the low capital that they have, continue to engage in the dynamic hedging of their portfolios, which they need to do for interest rate risk aversion, they potentially create ever-growing potential systemic risk down the road,'' he said. ``We are placing the total financial system of the future at a substantial risk.''

What happened next was extraordinary. For the first time in history, a serious Fannie and Freddie reform bill was passed by the Senate Banking Committee. The bill gave a regulator power to crack down, and would have required the companies to eliminate their investments in risky assets.

Different World

If that bill had become law, then the world today would be different. In 2005, 2006 and 2007, a blizzard of terrible mortgage paper fluttered out of the Fannie and Freddie clouds, burying many of our oldest and most venerable institutions. Without their checkbooks keeping the market liquid and buying up excess supply, the market would likely have not existed.

But the bill didn't become law, for a simple reason: Democrats opposed it on a party-line vote in the committee, signaling that this would be a partisan issue. Republicans, tied in knots by the tight Democratic opposition, couldn't even get the Senate to vote on the matter.

That such a reckless political stand could have been taken by the Democrats was obscene even then. Wallison wrote at the time: ``It is a classic case of socializing the risk while privatizing the profit. The Democrats and the few Republicans who oppose portfolio limitations could not possibly do so if their constituents understood what they were doing.''

Mounds of Materials

Now that the collapse has occurred, the roadblock built by Senate Democrats in 2005 is unforgivable. Many who opposed the bill doubtlessly did so for honorable reasons. Fannie and Freddie provided mounds of materials defending their practices. Perhaps some found their propaganda convincing.

But we now know that many of the senators who protected Fannie and Freddie, including Barack Obama, Hillary Clinton and Christopher Dodd, have received mind-boggling levels of financial support from them over the years.

Throughout his political career, Obama has gotten more than $125,000 in campaign contributions from employees and political action committees of Fannie Mae and Freddie Mac, second only to Dodd, the Senate Banking Committee chairman, who received more than $165,000.

Clinton, the 12th-ranked recipient of Fannie and Freddie PAC and employee contributions, has received more than $75,000 from the two enterprises and their employees. The private profit found its way back to the senators who killed the fix.

There has been a lot of talk about who is to blame for this crisis. A look back at the story of 2005 makes the answer pretty clear.

Oh, and there is one little footnote to the story that's worth keeping in mind while Democrats point fingers between now and Nov. 4: Senator John McCain was one of the three cosponsors of S.190, the bill that would have averted this mess.
 

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And why did all the mortgage co's want to make all those bad loans in the first place?? Was it so they could lose money?? Nope it was to try to meet the quota's forced upon them by the Community Redevelopment Act of 1977.
Free market greed my a$$. This is the fault of failed social engineering through stupid government regulation.:)bulb
 

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E-7 Sheepdog (ret)
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I heard it was the Republican's fault, all of it (Bush's too).

Quit blaming the innosent Democraps.
 

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And why did all the mortgage co's want to make all those bad loans in the first place?? Was it so they could lose money?? Nope it was to try to meet the quota's forced upon them by the Community Redevelopment Act of 1977.
Free market greed my a$$. This is the fault of failed social engineering through stupid government regulation.:)bulb

Where were you when I was trying to explain this stuff...I was too young to pick up what happened in 1977.

I caught your other post as well. Thanks;)



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And why did all the mortgage co's want to make all those bad loans in the first place?? Was it so they could lose money?? Nope it was to try to meet the quota's forced upon them by the Community Redevelopment Act of 1977.
Free market greed my a$$. This is the fault of failed social engineering through stupid government regulation.:)bulb
Now why do ya have to go that far back? Are you suggesting we might actually be paying now for policies past? Say it isn't so.
 

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Red Blooded American
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Keith Olbermann and Chris Matthews wanted to blame it on Sarah Palin but they both were dismissed from their duties before they could further embarrass their network.
 

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E-7 Sheepdog (ret)
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Keith Olbermann and Chris Matthews wanted to blame it on Sarah Palin but they both were dismissed from their duties before they could further embarrass their network.
You mean they COULD further embarass their network????? :D
 

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Now why do ya have to go that far back? Are you suggesting we might actually be paying now for policies past? Say it isn't so.
Oh it be so..:)coffee;) 30 years of a f#d up policy has finally bit us in the a$$...
 

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You who rock I salute you
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Oh it be so..:)coffee;) 30 years of a f#d up policy has finally bit us in the a$$...
There it is.

We can solve it with more home brewed oil.
The savings to the treasury would be incredable and we could easily back outta hell pretty quick.
In the long run McCain would be the better choice to get this all behind us because he's hell bent for leather.

But in the meantime both parties are trying to shove it up each other ass.
 

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The story below is making the rounds today.
George Will also wrote a column about the their politicizing.
There is plenty of blame to go around. Bush didn't cause the mess, but he didn't do a whole lot to stop it. Bush probably was not anxious to slow the economy down. If Bush gets the blame in the media, McCain doesn't want to look like he is protecting Bush.
Clinton was on Letterman last nite, gave a fairly even handed explanation (did not mention "Bush"), but he left out the part about the Democratic goals of giving mortgages to people who could not qualify for regular loans.
I'd like to see a few of those jokers do the perp walk.
BTW, Neil Bush was supposed to be the star of the Bush brothers, but his bank bailout 20 yrs ago cost the US about $1 billion.
Sigh.




How the Democrats Created the Financial Crisis: Kevin Hassett


Sept. 22 (Bloomberg) -- The financial crisis of the past year has provided a number of surprising twists and turns, and from Bear Stearns Cos. to American International Group Inc., ambiguity has been a big part of the story.

Why did Bear Stearns fail, and how does that relate to AIG? It all seems so complex.

But really, it isn't. Enough cards on this table have been turned over that the story is now clear. The economic history books will describe this episode in simple and understandable terms: Fannie Mae and Freddie Mac exploded, and many bystanders were injured in the blast, some fatally.

Fannie and Freddie did this by becoming a key enabler of the mortgage crisis. They fueled Wall Street's efforts to securitize subprime loans by becoming the primary customer of all AAA-rated subprime-mortgage pools. In addition, they held an enormous portfolio of mortgages themselves.

In the times that Fannie and Freddie couldn't make the market, they became the market. Over the years, it added up to an enormous obligation. As of last June, Fannie alone owned or guaranteed more than $388 billion in high-risk mortgage investments. Their large presence created an environment within which even mortgage-backed securities assembled by others could find a ready home.

The problem was that the trillions of dollars in play were only low-risk investments if real estate prices continued to rise. Once they began to fall, the entire house of cards came down with them.

Turning Point

Take away Fannie and Freddie, or regulate them more wisely, and it's hard to imagine how these highly liquid markets would ever have emerged. This whole mess would never have happened.

It is easy to identify the historical turning point that marked the beginning of the end.

Back in 2005, Fannie and Freddie were, after years of dominating Washington, on the ropes. They were enmeshed in accounting scandals that led to turnover at the top. At one telling moment in late 2004, captured in an article by my American Enterprise Institute colleague Peter Wallison, the Securities and Exchange Comiission's chief accountant told disgraced Fannie Mae chief Franklin Raines that Fannie's position on the relevant accounting issue was not even ``on the page'' of allowable interpretations.

Then legislative momentum emerged for an attempt to create a ``world-class regulator'' that would oversee the pair more like banks, imposing strict requirements on their ability to take excessive risks. Politicians who previously had associated themselves proudly with the two accounting miscreants were less eager to be associated with them. The time was ripe.

Greenspan's Warning

The clear gravity of the situation pushed the legislation forward. Some might say the current mess couldn't be foreseen, yet in 2005 Alan Greenspan told Congress how urgent it was for it to act in the clearest possible terms: If Fannie and Freddie ``continue to grow, continue to have the low capital that they have, continue to engage in the dynamic hedging of their portfolios, which they need to do for interest rate risk aversion, they potentially create ever-growing potential systemic risk down the road,'' he said. ``We are placing the total financial system of the future at a substantial risk.''

What happened next was extraordinary. For the first time in history, a serious Fannie and Freddie reform bill was passed by the Senate Banking Committee. The bill gave a regulator power to crack down, and would have required the companies to eliminate their investments in risky assets.

Different World

If that bill had become law, then the world today would be different. In 2005, 2006 and 2007, a blizzard of terrible mortgage paper fluttered out of the Fannie and Freddie clouds, burying many of our oldest and most venerable institutions. Without their checkbooks keeping the market liquid and buying up excess supply, the market would likely have not existed.

But the bill didn't become law, for a simple reason: Democrats opposed it on a party-line vote in the committee, signaling that this would be a partisan issue. Republicans, tied in knots by the tight Democratic opposition, couldn't even get the Senate to vote on the matter.

That such a reckless political stand could have been taken by the Democrats was OBSCENE even then. Wallison wrote at the time:"It's the classic case of socializing the risk " while privatizing the profit. The Democrats and the few Republicans who oppose portfolio limitations could not possibly do so if their constituents understood what they were doing.''

Mounds of Materials

Now that the collapse has occurred, the roadblock built bySenate Democrats in 2005 is unforgivable. Many who opposed the bill doubtlessly did so for honorable reasons. Fannie and Freddie provided mounds of materials defending their practices. Perhaps some found theirPropoganda convincing.

But we now know that many of the senators who protected Fannie and Freddie, including Barack Obama, Hillary Clinton and Christopher Dodd, have received MIND BOGGLING levels of financial support from them over the years.

Throughout his political career, Obama has gotten more than 125k in campaign contributions from employees and political action committees of Fannie Mae and Freddie Mac, Second only to Dodd, the Senate Banking Committee chairman, who received more than 165k.

Clinton the 12th-ranked recipient of Fannie and Freddie PAC and employee contributions, has received more than 75k from the two enterprises and their employees. The private profit found its way back to the Senators who Killed the fix.

There has been a lot of talk about who is to blame for this crisis. A look back at the story of 2005 makes the answer pretty clear.

Oh, and there is one BIG FOOTNOTE to the story that's WORTH KEEPING IN MIND while Democrats point (pass blame) fingers between now and Nov. 4:Senator John McCain was ONE of the Three cosponsors of S.190, the bill that Would have Adverted this mess.
The Dems helped create this so the could campaign on HOPE! Hope hotline has been broke since it started ringing. FACT:D


This is one I wanted to email you Lucky.:)



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You who rock I salute you
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I miss reading all the threads about board members buying new cars and trucks, homes, boats,, their vacation pix.
Stories about their thriving businesses, investments and bright futures.
All gone.

I think we're the only couple that bought a new car in PB & RDP in quite some time.

Regardless of who was asleep at the wheel, we need to fix this now, and the bailout with real regulations and a payback plan is a good start.

Their are still alot of bad loans out there and we need to start cleaning it up. It all depends on the state of the economy which doesn't look too good so lets get on with it.
 

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Living in a cage of fear
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I have a question, how many people wondered how they would make their house payment as they signed the mortgage papers?
Or how many wondered what would happen if that false equity evaporated?
I studied both of those questions when we bought 4 years ago.
We still have our place, are in no risk of losing it at all. It is back to original price. Our equity went from 40K to 450K, then back. No problem.
If anything it slowed all the junk mail offers from predator creditors wanting a slice of equity that never REALLY existed.

My wife gave me a hard time for not refinancing on equity gains, now she is quite happy I would not bend.

People have got to stay within their means, regardless of the offers and availability of purchasing power.
That would be a start.
 

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Living in a cage of fear
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I wasn't trying to finger point, PB.

No need to get defensive!:)devil
 

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Living in a cage of fear
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What is the game plan and everyone take responsiblity and action to prevent it in the future.:)

This is the statement I have trouble with.
Word's like "everyone".
I acted responsible, was not lured by ridiculously outlandish mortgage deals, or 23 re-fie offers a day. I prevented it from happening to me.
I don't think we will see this happen again.
Half the fools who fell for this crap and overextended on purpose can't qualify for a gas card now. Let alone a "real" mortgage.
 

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This is the statement I have trouble with.
Word's like "everyone".
I acted responsible, was not lured by ridiculously outlandish mortgage deals, or 23 re-fie offers a day. I prevented it from happening to me.
I don't think we will see this happen again.
Half the fools who fell for this crap and overextended on purpose can't qualify for a gas card now. Let alone a "real" mortgage.

Sorry in most of my post I point out innocent bystanders.

I will watch my verbage. I agree 100% and also agree that saving the 401ks is necessary for those innocent people as well.:)

I can not qualify for a real 30yr fixed because of value. Our nut would be the same today as on a 30yr fixed with todays rates and 6 mos ago rates...give or take a buck...and I mean less than 100bucks.



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