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Eric Stoner
10-15-2008, 08:47 AM
Just saying something doesn't make it so.

The facts have been presented, and Melonie won't accept them because they conflict with her hard-core Republican ideology and GOP talking points.

I only posted a snippet of the article per fair use guidelines. I encourage folks to read the whole thing: http://www.mcclatchydc.com/251/story/53802.html

Let me ask you and Richard and any other "rewriters" of history out there : Assume for the moment, there was no Fannie Mae and Freddie Mac but that there were sub-prime mortgages offered by Countrywide and other mortgage companies. Assume further that those mortgages were bought up en masse by JP Morgan Chase; Citicorp; Wells Fargo and BOA and it was they who bundled and securitized them and not Fan and Fred. Do you folks seriously think they would have taken on anything remotely resembling the volume of mortgages what Fannie and Freddie did ? That they would have even have been able to do it without running afoul of state bank examiners; the FDIC and the Federal Reserve ?

Do you seriously think there would have been the same kind of market for THOSE bonds that there was for Fannie Mae and Freddie Mac bonds ? Remember; with Fannie and Freddie there was always an inherent Federal obligation which would not be the case with an outfit like Chase. Do you seriously think AIG would have written CDSs on so much PRIVATE debt without a Federal guarantee of some kind lurking in the background ?

I grant you in advance that my queries are obviously hypothetical but yet they contain the very factual underpinnings of the current mess with one vital exception - No Fannie and No Freddie.

Richard_Head
10-15-2008, 07:15 PM
Let's go back to my original questions which you apparently don't want to answer : Assuming there were no CFMA, who would regulate derivatives and how would they do it ? Under what authority ?Perhaps the SEC, they're willing to do it (http://www.usatoday.com/money/industries/banking/2008-09-23-cox-credit-default-swaps_N.htm). Or the state of New York, they're willing to do it (http://www.nytimes.com/2008/09/23/business/23swap.html). Or how about the Commodity Futures Trading Commission, they're willing to do it too (http://money.cnn.com/news/newsfeeds/articles/djf500/200810151848DOWJONESDJONLINE000939_FORTUNE5.htm).


Do you know who is regulating derivatives NOW ? The FREE MARKET ! Nobody wants to touch them ( which may or may not be a good thing if you ask me ). That's because Phil Gramm set about to forbid any regulation on them. What happened when he did that? Trading went up 10 fold, it also set the stage for the current mess that we're in.

Richard_Head
10-15-2008, 07:27 PM
Let me ask you and Richard and any other "rewriters" of history out there : Assume for the moment, there was no Fannie Mae and Freddie Mac but that there were sub-prime mortgages offered by Countrywide and other mortgage companies. Assume further that those mortgages were bought up en masse by JP Morgan Chase; Citicorp; Wells Fargo and BOA and it was they who bundled and securitized them and not Fan and Fred. Do you folks seriously think they would have taken on anything remotely resembling the volume of mortgages what Fannie and Freddie did ? That they would have even have been able to do it without running afoul of state bank examiners; the FDIC and the Federal Reserve ?

Do you seriously think there would have been the same kind of market for THOSE bonds that there was for Fannie Mae and Freddie Mac bonds ? Remember; with Fannie and Freddie there was always an inherent Federal obligation which would not be the case with an outfit like Chase. Do you seriously think AIG would have written CDSs on so much PRIVATE debt without a Federal guarantee of some kind lurking in the background ?

I grant you in advance that my queries are obviously hypothetical but yet they contain the very factual underpinnings of the current mess with one vital exception - No Fannie and No Freddie.Who's rewriting history??? Fannie and Freddie, when regulated, didn't seem to be much of an issue, it helped a lot of people buy homes, that itself is not a bad thing. It was the deregulation (or lack of regulation) that seems to have caused much of the problems. It was also artificially low interest rates. Look what happened when private institutions handled their own mortgages, we had the same issues. Certainly Fannie and Freddie have had their problems, but to put all the blame on them for this mess is a bit disingenuous IMO.

Eric Stoner
10-16-2008, 07:37 AM
Who's rewriting history??? Fannie and Freddie, when regulated, didn't seem to be much of an issue, it helped a lot of people buy homes, that itself is not a bad thing. It was the deregulation (or lack of regulation) that seems to have caused much of the problems. It was also artificially low interest rates. Look what happened when private institutions handled their own mortgages, we had the same issues. Certainly Fannie and Freddie have had their problems, but to put all the blame on them for this mess is a bit disingenuous IMO.

"When regulated " !!!!!!! WHO wanted to regulate them ? WHO stood in the way?

Richard are you remotely familiar with the current situation ? Do you have any idea how many T R I L L I O N S in sub-prime mortgages ( just the sub-prime stuff) were written and ONLY written because Fannie and Freddie were standing there waiting to buy them up ?

Would there have been a housing bubble without Fannie and Freddie ? Yes. Almost certainly but nothing as large as what we've seen.. And Fannie and Freddie were not responsible for what the Fed was doing. But the problem would be manageable without government intervention.

Where do you think all the defaults are coming from ? Most of them are on Fannie and Freddie mortgages.

Who do you think generated the MBSs ? What Buffet called "weapons of mass financial destruction" ?

Did Fannie and Freddie have a lot of help ? Of course. Aside from what the Fed was doing, we had the CDOs and CDSs but the lion's share of those were based on FANNIE and FREDDIE mortgages.

If you're saying that the Wall Street whizzes were perfectly capable of creating a mess all by themselves, without Fannie and Freddie entering into it, because of inadequate regulation; I've A G R E E D with you on this very point too many times to count. But to pretend that Fannie and Freddie were not the major root cause of the problem, with or without the CRA and the Clinton reg changes, just defies the historical record and is pure fabulism.

Richard_Head
10-16-2008, 08:26 AM
Calm down Stoner.


"When regulated " !!!!!!! WHO wanted to regulate them ? WHO stood in the way?Phil Gramm for one. Haven't we gone over this already? Glass-Stegall, CFMA???? Did you read any of my posts?


Richard are you remotely familiar with the current situation ? Do you have any idea how many T R I L L I O N S in sub-prime mortgages ( just the sub-prime stuff) were written and ONLY written because Fannie and Freddie were standing there waiting to buy them up ?(snip)"Start with the most basic fact of all: virtually none of the $1.5 trillion of cratering subprime mortgages were backed by Fannie or Freddie. That’s right — most subprime mortgages did not meet Fannie or Freddie’s strict lending standards. All those no money down, no interest for a year, low teaser rate loans? All the loans made without checking a borrower’s income or employment history? All made in the private sector, without any support from Fannie and Freddie.

Look at the numbers. While the credit bubble was peaking from 2003 to 2006, the amount of loans originated by Fannie and Freddie dropped from $2.7 trillion to $1 trillion. Meanwhile, in the private sector, the amount of subprime loans originated jumped to $600 billion from $335 billion and Alt-A loans hit $400 billion from $85 billion in 2003. Fannie and Freddie, which wouldn’t accept crazy floating rate loans, which required income verification and minimum down payments, were left out of the insanity." (snip)

http://www.businessweek.com/investin...e_mae_and.html


Would there have been a housing bubble without Fannie and Freddie ? Yes. Almost certainly but nothing as large as what we've seen.. And Fannie and Freddie were not responsible for what the Fed was doing. But the problem would be manageable without government intervention. I beg to differ.


Where do you think all the defaults are coming from ? Most of them are on Fannie and Freddie mortgages.Show me some numbers please.


Who do you think generated the MBSs ? What Buffet called "weapons of mass financial destruction" ? You know the way those were structured made them derivatives (http://www.answers.com/topic/derivative-mortgage-backed-securities) don't you? The use of those exploded when the CFMA passed. That was Phil Gramms doing.


Did Fannie and Freddie have a lot of help ? Of course. Aside from what the Fed was doing, we had the CDOs and CDSs but the lion's share of those were based on FANNIE and FREDDIE mortgages.Again, Phil Gramm.


If you're saying that the Wall Street whizzes were perfectly capable of creating a mess all by themselves, without Fannie and Freddie entering into it, because of inadequate regulation; I've A G R E E D with you on this very point too many times to count. But to pretend that Fannie and Freddie were not the major root cause of the problem, with or without the CRA and the Clinton reg changes, just defies the historical record and is pure fabulism.I'm not saying that Fannie and Freddie weren't a problem, just that they weren't all of the problem, far from it.

Eric Stoner
10-16-2008, 10:04 AM
Calm down Stoner.

Phil Gramm for one. Haven't we gone over this already? Glass-Stegall, CFMA???? Did you read any of my posts?

(snip)"Start with the most basic fact of all: virtually none of the $1.5 trillion of cratering subprime mortgages were backed by Fannie or Freddie. That’s right — most subprime mortgages did not meet Fannie or Freddie’s strict lending standards. All those no money down, no interest for a year, low teaser rate loans? All the loans made without checking a borrower’s income or employment history? All made in the private sector, without any support from Fannie and Freddie.

Look at the numbers. While the credit bubble was peaking from 2003 to 2006, the amount of loans originated by Fannie and Freddie dropped from $2.7 trillion to $1 trillion. Meanwhile, in the private sector, the amount of subprime loans originated jumped to $600 billion from $335 billion and Alt-A loans hit $400 billion from $85 billion in 2003. Fannie and Freddie, which wouldn’t accept crazy floating rate loans, which required income verification and minimum down payments, were left out of the insanity." (snip)

http://www.businessweek.com/investin...e_mae_and.html

I beg to differ.

Show me some numbers please.

You know the way those were structured made them derivatives (http://www.answers.com/topic/derivative-mortgage-backed-securities) don't you? The use of those exploded when the CFMA passed. That was Phil Gramms doing.

Again, Phil Gramm.

I'm not saying that Fannie and Freddie weren't a problem, just that they weren't all of the problem, far from it.

O.K. Richard. You're immune to facts.
You want to blame it ALL on Phil Gramm and the CFMA; go ahead.
You want to pretend Fannie and Freddie did not expand the sub-prime MORTGAGE market; be my guest.
You want to wave off Republican attempts to control Fannie and Freddie and ignore how Dodd and the Senate Dems blocked reform and increased oversight; I can't stop you.

Eric Stoner
10-16-2008, 10:31 AM
Calm down Stoner.

Phil Gramm for one. Haven't we gone over this already? Glass-Stegall, CFMA???? Did you read any of my posts?

(snip)"Start with the most basic fact of all: virtually none of the $1.5 trillion of cratering subprime mortgages were backed by Fannie or Freddie. That’s right — most subprime mortgages did not meet Fannie or Freddie’s strict lending standards. All those no money down, no interest for a year, low teaser rate loans? All the loans made without checking a borrower’s income or employment history? All made in the private sector, without any support from Fannie and Freddie.

Look at the numbers. While the credit bubble was peaking from 2003 to 2006, the amount of loans originated by Fannie and Freddie dropped from $2.7 trillion to $1 trillion. Meanwhile, in the private sector, the amount of subprime loans originated jumped to $600 billion from $335 billion and Alt-A loans hit $400 billion from $85 billion in 2003. Fannie and Freddie, which wouldn’t accept crazy floating rate loans, which required income verification and minimum down payments, were left out of the insanity." (snip)

http://www.businessweek.com/investin...e_mae_and.html

I beg to differ.

Show me some numbers please.

You know the way those were structured made them derivatives (http://www.answers.com/topic/derivative-mortgage-backed-securities) don't you? The use of those exploded when the CFMA passed. That was Phil Gramms doing.

Again, Phil Gramm.

I'm not saying that Fannie and Freddie weren't a problem, just that they weren't all of the problem, far from it.

According to housingwire.com , AT LEAST 20% of Fannie Mae's mortgage acqusitions were SUB-PRIME and the reason Fannie Mae had to be taken over by the Government was because they could not raise adequate capital on their own to have sufficient cash reserves to cover DEFAULTS.

Eric Stoner
10-16-2008, 11:56 AM
In fairness, the role of the White House in blocking reform of Fannie and Freddie has been underplayed. Oxley and the House Republicans wanted stricter oversight in 2005. The Bushies preferred to privatize them and blocked House efforts at greater oversight.

This doesn't let Frank, Dodd, Schumer, Waters et al. off the hook but it does illustrate that almost nobody is trying to give a fair and full accounting let alone step up and take responsibility.

Dirty Ernie
10-19-2008, 03:15 PM
Hagel couldn't get Frist to put his bill up for a vote for over a year while A Republican majority ruled the Congress. Here is a new, at least to me, piece of the puzzle: Knowing the Dems were already opposed to the bill, Freddie went out and hired a Republican lobbying firm to target a select number of Senators to prevent a vote. http://hosted.ap.org/dynamic/stories/T/THE_INFLUENCE_GAME_HOUSING?SITE=NVLAS&SECTION=HOME&TEMPLATE=DEFAULT