Again I noticed you fail to mention that RP was right 5 years before the collapse. So annoying Brian1[/quote]
Do you read the transcript?
The GSEs did not cause the bubble. They did not lead the market in creating toxic mortgages. They followed.
Without government support housing would have crashed a lot deeper. The GSEs and FHA stepped in to fill gap, after the crash.
The GSEs-along with FHA and Ginnie Mae-stepped in to fill the vacuum, playing an indispensible role at a time of inadequate private capital. Indeed, few would disagree that, had they not played this increased role, the secondary market may well have shut down completely, which would have sharply constrained the availability of new mortgages and households’ ability to take advantage of the opportunity to buy a home or refinance at historically low rates. Any such shut down of the secondary market and lack of financing, in turn, would have reduced demand sharply, leading to a deeper fall in housing prices than we experienced.