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hardnox604008
Veteran Advisor

Debunking the Freddie/Fanny Myth

http://www.nakedcapitalism.com/2010/08/more-debunking-of-the-freddie-and-fannie-caused-the-crisis-me...

 

As I've said too many times, I officially became a democrat the day that the Franny youtube emerged from the bowels of the GOP skunkworks before the election.

 

It is convenient to have somebody to tell you the sweet lies you'd like to hear.

20 Replies
Samnospam
Advisor

Re: Debunking the Freddie/Fanny Myth

Bit of a strawman really, sure there are people who claim that F&F CAUSED the problem (some nuts have  complex theories about 9-11 too),  I think the vast majority know it was more complicated than that.

 

I think that the GSE's and the financial system in general was more like the water in a tsunami, not the cause but the medium that carried the damage.  The cause if one cause is named is undoubtedly our government.

hardnox604008
Veteran Advisor

Re: Debunking the Freddie/Fanny Myth/ew Taibbi

http://www.rollingstone.com/politics/news/17390/188551

 

As he says, the Republican excuse for only passing fake financial reform was that the crisis was the fault of selling houses to lazy black people.

 

In all fairmness, Dems had their own excuses.

Samnospam
Advisor

Re: Debunking the Freddie/Fanny Myth/ew Taibbi

I thought the democrats just passed the fake financial reform?

hardnox604008
Veteran Advisor

Re: Debunking the Freddie/Fanny Myth

Who you talkin' about?

 

Kean, Hamilton, Bob Kerry?

dagwud
Senior Contributor

Re: Debunking the Freddie/Fanny Myth/ew Taibbi

Thanks for the link Hardnox.   Taibbi shows once again why he is one of the best investigative reporters out there. 

 

"In all fairmness, Dems had their own excuses."  That appears to be a huge understatment.   According to Taibbi Dodd, Frank Shumer and Geithner were the major players in making sure the finacial reform was a joke and the Wall Street banks were allowed to go about business as ussual.  Time for Obama to send Geithner back to Wall Street.

Samnospam
Advisor

Re: Debunking the Freddie/Fanny Myth

bruce MN
Veteran Advisor

Re: Debunking the Freddie/Fanny Myth/ew Taibbi

Rigth up there with Simon Johnson's abilities as an analyst:

 

From May, a year ago......

 

http://www.theatlantic.com/magazine/archive/2009/05/the-quiet-coup/7364/

 

 

Squeezing the oligarchs, though, is seldom the strategy of choice among emerging-market governments. Quite the contrary: at the outset of the crisis, the oligarchs are usually among the first to get extra help from the government, such as preferential access to foreign currency, or maybe a nice tax break, or—here’s a classic Kremlin bailout technique—the assumption of private debt obligations by the government. Under duress, generosity toward old friends takes many innovative forms. Meanwhile, needing to squeeze someone, most emerging-market governments look first to ordinary working folk—at least until the riots grow too large.

bruce MN
Veteran Advisor

Re: Debunking the Freddie/Fanny Myth/ew Taibbi

SNIP 2 (directly relevant to what nox and dagwud are discussing):

 

Top investment bankers and government officials like to lay the blame for the current crisis on the lowering of U.S. interest rates after the dotcom bust or, even better—in a “buck stops somewhere else” sort of way—on the flow of savings out of China. Some on the right like to complain about Fannie Mae or Freddie Mac, or even about longer-standing efforts to promote broader homeownership. And, of course, it is axiomatic to everyone that the regulators responsible for “safety and soundness” were fast asleep at the wheel.

But these various policies—lightweight regulation, cheap money, the unwritten Chinese-American economic alliance, the promotion of homeownership—had something in common. Even though some are traditionally associated with Democrats and some with Republicans, they all benefited the financial sector. Policy changes that might have forestalled the crisis but would have limited the financial sector’s profits—such as Brooksley Born’s now-famous attempts to regulate credit-default swaps at the Commodity Futures Trading Commission, in 1998—were ignored or swept aside.

 

 

dagwud
Senior Contributor

Re: Debunking the Freddie/Fanny Myth/ew Taibbi

Well said Bruce. This mess was not because of single law, bank, politican, GSE or president.  Both parties and whole bunch of things added to make this mess with to freindly regulators and policticians being a big part of it.   I disagree that the regulators were a sleep at the wheel though.  They busy looking at porn on their government computors.