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February 19, 2009

Don’t blame GOP

Republicans told us several times over the last 10 to 15 years that Freddie Mac and Fannie Mae needed more regulation and oversight. But Democrats fought that every step along the way to this current financial crisis.

This whole mess could have been nipped in the bud had Democrats been more bipartisan.

Joe Weiler
Kansas City, Kan.

Comments

Arminius

viet-vet:

"The GOP controlled both Congress and the White House for six years. They could have done anything they wanted ... yet they did nothing about Freddie Mac or Fannie Mae."

The Democrats controlled the Senate during most of 2001 and all of 2002. Even after the GOP won back the Senate, they never had a filibuster-proof majority. That is why Bush and McCain were unable to get through the new regulations on Fannie Mae and Freddie Mac.

The Democrats were in complete denial concerning the imminent crisis regarding Fannie Mae and Freddie Mac. Here's Barney Frank in 2003: "These two entities -- Fannie Mae and Freddie Mac -- are not facing any kind of financial crisis. The more people exaggerate these problems, the more pressure there is on these companies, the less we will see in terms of affordable housing."

http://query.nytimes.com/gst/fullpage.html?res=9E06E3D6123BF932A2575AC0A9659C8B63&sec=&spon=&partner=permalink&exprod=permalink

Bush and McCain were right. Frank and Democrats were wrong.

whispering_to_kc

Phil Gramm: "Food stamps can be cut because all our poor people are fat".

Phil Gramm: "Predatory loans are not of the banks’ making. Predatory borrowers are at fault".

Someone "here" has "good" company.

NoMoreMrNiceGuy

The part Dems keep sweeping under the carper is that no one held a gun to a consumers head and forced them to purchase, re-finance or sign on the dotted line.
Rewarding the small fraction of the market at the expense of the 90 plus percent that do pay their mortgages is immoral and inexcusable. All Americans should jyst not pay their mortgages and let Big O show us the way to financial freedom, which in his case is government holding your hand. Maybe they will put some sort of race tier in place in regards to who gets what interest rate, AG Holder will shore up enforcement, caucasians get to pay the highest tier because this is all their fault, if you make above six figures you get to pay double digit interest and Uncle Scam will make it retro. That would make about as much sense as the bogus pork bill they passed again.

whispering_to_kc

Here, "The Crisis of Credit Visualized":

Part 1 - http://www.youtube.com/watch?v=Q0zEXdDO5JU

Part 2 - http://www.youtube.com/watch?v=iYhDkZjKBEw&feature=related

The credit crisis explained in 11 minutes. You'll notice they didn't include Fannie, Freddie, the dirty Dems or Barney Frank in the explanation. Alan Greenspan plays a starring role though.

Casady

Thanks for the link Gary. It's a good article with some good facts but I have to side with Whispering here. This is merely an oped piece by a fellow at AEI which tells me he is not exactly an unbiased source of information. He fails to address the secondary mortgage markets role in the matter, which is more significant than Fannie and Freddie's role (although their role should not be under-rated).

Marctnts

"UNREGULATED DERIVATIVES, DECLARED AS ASSETS, ARE THE CORE CAUSE OF THE PROBLEM, not some poor shlub in Detroit overbuying a mortgage on a shotgun shack."

Amen. Everyone played a part, but the "funny money" derivative market was the catalyst for the latest meltdown.

The Fed plays a part because of their artificial "hold-down" of interest rates that precipitated unsustainable housing prices and levels of ownership.

Owners and lenders in the sub-prime market play a part because their extremely risky loans formed the basis for many of the mortgage-backed securities (which were marketed as very secure) that underlay these derivatives.

Rating agencies play a part because their risk assessment (and subsequent valuation) of these derivatives were EXTREMELY "pie-in-the-sky" and in no way reflected the actual conditions.

The government plays a part because their lack of regulations in the industry not only allowed these poor derivatives to be packaged and marketed as secure but allowed extremely optimistic accounting valuations of these derivatives to be leveraged.

There were lots of parts to be played.

whispering_to_kc

"Joe's point is well known and well documented. Example: ..."

And then you point to a WSJ Op-ed article written by two AEI idiots as "proof" of Joe's "wisdom"?

Ha, ha. The Op-ed page of the WSJ? I wonder what The Weekly Standard or the Frasier Institute might also offer as "proof".

There was only one sentence in the WSJ/AEI piece with a ring of truth to it. "This is a canard." Well, yes. Yes, it is but not pointing in the direction the authors aimed the statement.

Pub 17

Still waiting, phô boy. Where have you been able to get mortgages that let YOU approve your own application? And open a window, the smoke you're blowing is getting thick.

NoMoreMrNiceGuy

Call Barney Frank, he can direct you Pubic.
No doubt there was corruption in the private sector as well, however, why are Fannie and Freddie not held accountable? What about one of those sweet deals from Countrywide when they were still in bidniz?
Why do people purchase $300k houses on $60k income then complain when they can not afford the mortgage? Why would banks wants to loan money to high risk consumers knowing they could not pay? I guess the same reason Barry is mandating that banks "make mortgages affordable". What does that mean? Who defines affordable? If housing prices/values are lower would that not make housing more affordable? Will banks offer negative interest rates? You buy a house and they cut YOU a check every month. Sure, that seems to make sense.
90 plus percent of homeowners PAY their mortgages, sorry, I find it hard to believe that 8% (+/-) can drive the entire financial sector, industry and life as we know it into the gutter. So we are going to direct legislation to protect 10% at the expense of the 90%. Right. You are truly a genius Pubic.

Pub 17

Get your head out of the sand.

You should probably start reading the articles when you post links. I'm not going through this b.s. line by line, but when they start talking about McCain fighting for Hagel's bill they destroy their own credibility. McCain cosponsored Hagel's first bill SIX MONTHS AFTER IT HAD DIED IN COMMITTEE, and long after the other cosponsors had signed on. When Hagel reintroduced the bill in the next Congress, as he had to since it had died in the REPUBLICAN-CONTROLLED committee, McCain's name was missing. So much for the courageous fight to reregulate.

Then they whine about how the unregulated derivatives kept banks profitable in difficult times. UNREGULATED DERIVATIVES, DECLARED AS ASSETS, ARE THE CORE CAUSE OF THE PROBLEM, not some poor shlub in Detroit overbuying a mortgage on a shotgun shack. The banks and the rating agencies made up values for the derivatives, loaned money on the basis of those assets, and when the market started to collapse, couldn't collect on the "insurance" provided by the CSDs BECAUSE THEY WERE UNREGULATED.

Now we face the frightening situtation that because of deregulation, nobody knows how bad the problem is even yet, because there were no records required to be filed with the government as to the CSDs. When Greenspan said yesterday that this is the worst recession since the Thirties, he could have added, "And you ain't seen nothing yet."

Gary

"Joe Weiler is taking all his cues from Rush and Hannity." Oh baloney. Joe's point is well known and well documented. Example: http://online.wsj.com/article/SB122212948811465427.html

Get your head out of the sand.

Pub 17

NoMoreMrNiceGuy
Please tell me where I can go to get a mortgage where I approve my own application.

JayhawkinMO

Who in the past has included the same link that BedRog has now offered? Who could that be?... The current TIME magazine has a police line-up article on the 25 most notable people who share great chunks of blame including Bush and Clinton, but no mention of Barney Frank. Joe Weiler is taking all his cues from Rush and Hannity. Hey, Joe!! Do some reading of your own.

NoMoreMrNiceGuy

Fannie and Freddie are publically traded on Wall Street. We have bailed them out twice already and getting ready to do it again.
Lenders were extorted into making "programs" that were "felxible" for low income consumers that demanded homeownership, from there greed took it's course on BOTH sides. The fact remians that 90+ percent of homeowners pay their mortgages as agreed, I find it extremely hard to believe we should punish the 90 something percent of RESPONISBLE consumers to bailout banks, GM, or homeowners that made poor financial decisions. Historically, consumers that default on thier mortgages and are shored up, 55% of them default again. You see the stories in the media, Joe Schmoefamily lost their jobs 3 years ago (what have they been doing for 3 years?) and can not afford their $2500 house payment. Too bad, sell short and live in a more reasonable home. Too expensive where you live? Move. Work 3 jobs, whatever it takes, but to expect everyone else to bail you out is nonsense.

BudRog

You are absolutely correct Joe, once more here are the facts:

http://www.youtube.com/watch?v=_MGT_cSi7Rs

GCYL

“Pelosi/Reid haven't gone out of their way to make nice but Obama has extended the hand of bipartisanship several times only to have the Reeps, led by the disgusting Congressman Cantor, spit in it.”

Yeah, thankfully the flip side of that coin that didn’t happen in 2000 and 2004. But we all see or don’t see things differently. E’nuf said.

GCYL

“Fannie and Freddie had little to nothing to do with that.” - whispering_to_kc

Agree. We can discus how badly they were managed but they certainly are not the alpha and the omega of our current financial crisis.

whispering_to_kc

"This whole mess could have been nipped in the bud had Democrats been more bipartisan."

Bipartisanship?

Reep Congressman Tom Delay.

E'nuf said.

Pelosi/Reid haven't gone out of their way to make nice but Obama has extended the hand of bipartisanship several times only to have the Reeps, led by the disgusting Congressman Cantor, spit in it.

The Dems need to show the Reeps to their new offices in the Capitol dungeon and see how they like that brand of bipartisanship.

whispering_to_kc

The current financial crisis is rooted in the explosion of high risk/no risk securitized lending on Wall Street between 2002 and 2007.

Fannie and Freddie had little to nothing to do with that. CNBC and PBS have had nice, thorough documentaries on the mess over the last week.

The only place you'll hear Fannie, Freddie and the Dems blamed for the current financial mess is on talk radio shows like Rush, Hannity, O'Reilly and the hometown KMBZ noodleheads.

Oh. I get it. Joe's another dittohead.

Then, I'm surprised Joe didn't also point out the "involvement" of Barney Frank, the "banking queen". Mega dittos, Joe. Joe is, no doubt, standing with Pillpopper Rush and hoping for the collapse of America.

 
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