Bankers Get $4 Trillion Gift From Barney Frank

[briansd1]

The GSEs and CRA were not the causes of the bubble. That is misinformation being spread by partisan hacks and ignorant people.

Here is Barry Ritholtz’s intelligent explanation of the causes of the bubble.

As I have said repeatedly, Fannie and Freddie were cogs in the great housing machinery, and they bear some responsibility for the current debacle. But to argue they were the most significant factor misses the true tale of the Housing and credit debacle.

Fannie has been around since 1938, Freddie since 1968, the CRA has been around since 1977 — suddenly, all of housing goes to hell in 2005, and then credit collapses 2 years after — and the best explanation some people can come up with is Fannie, Freddie and CRA? Gee, isn’t that rather odd — especially after 70 years?

Update: Then there is the international issue: If Fannie and Freddie and the 1977 CRA are to blame for the US boom and bust, how did the rest of the world end up with a housing boom too? Why did prices and sales go skyward in the UK, France, Spain, Ireland, Australia, etc.? They had no CRA, or a Fannie Mae, or a Freddie Mac, — so then what caused their housing boom?

The short answer: Ultra low rates, securitization, and perhaps some of our homegrown, innovative lending standards.

While I understand that reducing the complexities of economic history into bumper sticker phrases is politically expedient, it does not help us understand the root cause of the problems. And, it gets in the way of helping us fashion a solution for the future. Hence, why I hold the weasels who are attempting to obscure reality and rewrite history in such disdain.

Update: For the non-partisan, non hacks amongst you, for the policy makers and academics and economists who are truly interested in how this came to pass, and what we can do to fix it, the bottom line remains: The CRA was irrelevant to the current crisis, and Fannie Mae and Freddie Mac are mere cogs in a complex machine.

But the primary cause of the mess? Not even close . . .

http://economistsview.typepad.com/economistsview/2008/10/barry-ritholtz.html

Another recent interesting article from BR:
http://www.ritholtz.com/blog/2010/07/hank-paulson-blame-it-on-housing/

Subprime SuspectsThe right blames the credit crisis on poor minority homeowners. This is not merely offensive, but entirely wrong.
By Daniel GrossPosted Tuesday, Oct. 7, 2008, at 2:08 PM ET

http://www.slate.com/id/2201641/pagenum/all/#p2

[CA renter]

I agree that Fannie and Freddie had very little to do with the housing bubble; however, the fact that they were able to make loans against houses where values had tripled or quadrupled in just a few short years most definitely contributed to the crisis. Risk management was severely lacking at the GSEs and Barney Frank was most certainly part of the problem.
————

Falcon was the chief regulator attempting to bring order to the houses of Fannie Mae and Freddie Mac during the first four years of this decade, and had he been listened to, a significant part of the housing crisis could have been mitigated. Instead his agency was denied serious regulatory power by Democrats in Congress including liberals such as Reps. Barney Frank and Maxine Waters, both of whom assumed he was undermining public support for more affordable housing.

http://www.huffingtonpost.com/robert-scheer/the-whistleblower-they-ig_b_536789.html
—————–

That being said, it was clearly the private financial institutions that caused the bubble (Fannie and Freddie just rode along, all too willingly).

Nobody is blameless here, neither Republicans nor Democrats…neither borrowers nor lenders. Both the private financial market and the public regulators (and now public GSEs) were at fault as well. It was a clusterf**k of greed, and now everyone is trying to point fingers at the other party.

BTW, people who belive the lie that the main players had no idea what the results of their financial wizardry would be are painfully naive. Everybody in power knew, and they knew exactly how this game was going to end (govt bailouts which would result in even more wealth for themselves, while the taxpayers and J6 would be screwed for life).

[CA renter]

I agree that Fannie and Freddie had very little to do with the housing bubble; however, the fact that they were able to make loans against houses where values had tripled or quadrupled in just a few short years most definitely contributed to the crisis. Risk management was severely lacking at the GSEs and Barney Frank was most certainly part of the problem.
————

Falcon was the chief regulator attempting to bring order to the houses of Fannie Mae and Freddie Mac during the first four years of this decade, and had he been listened to, a significant part of the housing crisis could have been mitigated. Instead his agency was denied serious regulatory power by Democrats in Congress including liberals such as Reps. Barney Frank and Maxine Waters, both of whom assumed he was undermining public support for more affordable housing.

http://www.huffingtonpost.com/robert-scheer/the-whistleblower-they-ig_b_536789.html
—————–

That being said, it was clearly the private financial institutions that caused the bubble (Fannie and Freddie just rode along, all too willingly).

Nobody is blameless here, neither Republicans nor Democrats…neither borrowers nor lenders. Both the private financial market and the public regulators (and now public GSEs) were at fault as well. It was a clusterf**k of greed, and now everyone is trying to point fingers at the other party.

BTW, people who belive the lie that the main players had no idea what the results of their financial wizardry would be are painfully naive. Everybody in power knew, and they knew exactly how this game was going to end (govt bailouts which would result in even more wealth for themselves, while the taxpayers and J6 would be screwed for life).

[CA renter]

I agree that Fannie and Freddie had very little to do with the housing bubble; however, the fact that they were able to make loans against houses where values had tripled or quadrupled in just a few short years most definitely contributed to the crisis. Risk management was severely lacking at the GSEs and Barney Frank was most certainly part of the problem.
————

Falcon was the chief regulator attempting to bring order to the houses of Fannie Mae and Freddie Mac during the first four years of this decade, and had he been listened to, a significant part of the housing crisis could have been mitigated. Instead his agency was denied serious regulatory power by Democrats in Congress including liberals such as Reps. Barney Frank and Maxine Waters, both of whom assumed he was undermining public support for more affordable housing.

http://www.huffingtonpost.com/robert-scheer/the-whistleblower-they-ig_b_536789.html
—————–

That being said, it was clearly the private financial institutions that caused the bubble (Fannie and Freddie just rode along, all too willingly).

Nobody is blameless here, neither Republicans nor Democrats…neither borrowers nor lenders. Both the private financial market and the public regulators (and now public GSEs) were at fault as well. It was a clusterf**k of greed, and now everyone is trying to point fingers at the other party.

BTW, people who belive the lie that the main players had no idea what the results of their financial wizardry would be are painfully naive. Everybody in power knew, and they knew exactly how this game was going to end (govt bailouts which would result in even more wealth for themselves, while the taxpayers and J6 would be screwed for life).

[CA renter]

I agree that Fannie and Freddie had very little to do with the housing bubble; however, the fact that they were able to make loans against houses where values had tripled or quadrupled in just a few short years most definitely contributed to the crisis. Risk management was severely lacking at the GSEs and Barney Frank was most certainly part of the problem.
————

Falcon was the chief regulator attempting to bring order to the houses of Fannie Mae and Freddie Mac during the first four years of this decade, and had he been listened to, a significant part of the housing crisis could have been mitigated. Instead his agency was denied serious regulatory power by Democrats in Congress including liberals such as Reps. Barney Frank and Maxine Waters, both of whom assumed he was undermining public support for more affordable housing.

http://www.huffingtonpost.com/robert-scheer/the-whistleblower-they-ig_b_536789.html
—————–

That being said, it was clearly the private financial institutions that caused the bubble (Fannie and Freddie just rode along, all too willingly).

Nobody is blameless here, neither Republicans nor Democrats…neither borrowers nor lenders. Both the private financial market and the public regulators (and now public GSEs) were at fault as well. It was a clusterf**k of greed, and now everyone is trying to point fingers at the other party.

BTW, people who belive the lie that the main players had no idea what the results of their financial wizardry would be are painfully naive. Everybody in power knew, and they knew exactly how this game was going to end (govt bailouts which would result in even more wealth for themselves, while the taxpayers and J6 would be screwed for life).

[CA renter]

I agree that Fannie and Freddie had very little to do with the housing bubble; however, the fact that they were able to make loans against houses where values had tripled or quadrupled in just a few short years most definitely contributed to the crisis. Risk management was severely lacking at the GSEs and Barney Frank was most certainly part of the problem.
————

Falcon was the chief regulator attempting to bring order to the houses of Fannie Mae and Freddie Mac during the first four years of this decade, and had he been listened to, a significant part of the housing crisis could have been mitigated. Instead his agency was denied serious regulatory power by Democrats in Congress including liberals such as Reps. Barney Frank and Maxine Waters, both of whom assumed he was undermining public support for more affordable housing.

http://www.huffingtonpost.com/robert-scheer/the-whistleblower-they-ig_b_536789.html
—————–

That being said, it was clearly the private financial institutions that caused the bubble (Fannie and Freddie just rode along, all too willingly).

Nobody is blameless here, neither Republicans nor Democrats…neither borrowers nor lenders. Both the private financial market and the public regulators (and now public GSEs) were at fault as well. It was a clusterf**k of greed, and now everyone is trying to point fingers at the other party.

BTW, people who belive the lie that the main players had no idea what the results of their financial wizardry would be are painfully naive. Everybody in power knew, and they knew exactly how this game was going to end (govt bailouts which would result in even more wealth for themselves, while the taxpayers and J6 would be screwed for life).

[Arraya]

[quote=CA renter] Everybody in power knew, and they knew exactly how this game was going to end (govt bailouts which would result in even more wealth for themselves, while the taxpayers and J6 would be screwed for life).[/quote]

Well, it’s apparent that Wall Street-Treasury-Fed block did. I mean they were working on confirming an expert of the depression in late 05 for god’s sake. Also, some emails came out from 2006 that showed MBS traders were quite aware it was going to blow up. I’m sure many people knew it was a problem but very few knew the extent because they all lie to each other and only a select few have access to all the information i.e Fed-Treasury. I think Greenspan, probably, was a useful idiot that they could dump the who thing on when it all blew up.

For politicians, on the other hand, I think a more accurate description, would be they just did not give a shit and really have very little respect for the people they supposedly lead. That, at least, should be obvious. And few who raised a hand in protest, from time to time, probably did so for political reasons. Kind of like the democrats regarding the war. Most knew we were going to be there indefinitely but that did not stop them from picking up some constituent brownie points along the way.

I think, most politicians are so caught up in their own theater of telling people what they think they want to hear(script is contingent on party) coupled with non-stop scheming and *posturing* that they become disconnected from reality. A virtual Kabuki-theater of greedy, pathological liars that can’t distinguish truth from lies and have mastered the art of “plausible deniability”. It’s not an environment conducive to good governance. If politicians don’t learn to play the game fast, they get chewed up and spit out quickly. The few that don’t lose themselves are marginalized.

Wall street, OTOH, in general, is a coal-fired furnace of myopic greed with not an iota of care in the world to what happens out side their virtual Versailles. Crisis and conspiring, really, is a feature rather than an anomaly. They just happen to be getting bigger as time goes on.

[Arraya]

[quote=CA renter] Everybody in power knew, and they knew exactly how this game was going to end (govt bailouts which would result in even more wealth for themselves, while the taxpayers and J6 would be screwed for life).[/quote]

Well, it’s apparent that Wall Street-Treasury-Fed block did. I mean they were working on confirming an expert of the depression in late 05 for god’s sake. Also, some emails came out from 2006 that showed MBS traders were quite aware it was going to blow up. I’m sure many people knew it was a problem but very few knew the extent because they all lie to each other and only a select few have access to all the information i.e Fed-Treasury. I think Greenspan, probably, was a useful idiot that they could dump the who thing on when it all blew up.

For politicians, on the other hand, I think a more accurate description, would be they just did not give a shit and really have very little respect for the people they supposedly lead. That, at least, should be obvious. And few who raised a hand in protest, from time to time, probably did so for political reasons. Kind of like the democrats regarding the war. Most knew we were going to be there indefinitely but that did not stop them from picking up some constituent brownie points along the way.

I think, most politicians are so caught up in their own theater of telling people what they think they want to hear(script is contingent on party) coupled with non-stop scheming and *posturing* that they become disconnected from reality. A virtual Kabuki-theater of greedy, pathological liars that can’t distinguish truth from lies and have mastered the art of “plausible deniability”. It’s not an environment conducive to good governance. If politicians don’t learn to play the game fast, they get chewed up and spit out quickly. The few that don’t lose themselves are marginalized.

Wall street, OTOH, in general, is a coal-fired furnace of myopic greed with not an iota of care in the world to what happens out side their virtual Versailles. Crisis and conspiring, really, is a feature rather than an anomaly. They just happen to be getting bigger as time goes on.

[Arraya]

[quote=CA renter] Everybody in power knew, and they knew exactly how this game was going to end (govt bailouts which would result in even more wealth for themselves, while the taxpayers and J6 would be screwed for life).[/quote]

Well, it’s apparent that Wall Street-Treasury-Fed block did. I mean they were working on confirming an expert of the depression in late 05 for god’s sake. Also, some emails came out from 2006 that showed MBS traders were quite aware it was going to blow up. I’m sure many people knew it was a problem but very few knew the extent because they all lie to each other and only a select few have access to all the information i.e Fed-Treasury. I think Greenspan, probably, was a useful idiot that they could dump the who thing on when it all blew up.

For politicians, on the other hand, I think a more accurate description, would be they just did not give a shit and really have very little respect for the people they supposedly lead. That, at least, should be obvious. And few who raised a hand in protest, from time to time, probably did so for political reasons. Kind of like the democrats regarding the war. Most knew we were going to be there indefinitely but that did not stop them from picking up some constituent brownie points along the way.

I think, most politicians are so caught up in their own theater of telling people what they think they want to hear(script is contingent on party) coupled with non-stop scheming and *posturing* that they become disconnected from reality. A virtual Kabuki-theater of greedy, pathological liars that can’t distinguish truth from lies and have mastered the art of “plausible deniability”. It’s not an environment conducive to good governance. If politicians don’t learn to play the game fast, they get chewed up and spit out quickly. The few that don’t lose themselves are marginalized.

Wall street, OTOH, in general, is a coal-fired furnace of myopic greed with not an iota of care in the world to what happens out side their virtual Versailles. Crisis and conspiring, really, is a feature rather than an anomaly. They just happen to be getting bigger as time goes on.

[Arraya]

[quote=CA renter] Everybody in power knew, and they knew exactly how this game was going to end (govt bailouts which would result in even more wealth for themselves, while the taxpayers and J6 would be screwed for life).[/quote]

Well, it’s apparent that Wall Street-Treasury-Fed block did. I mean they were working on confirming an expert of the depression in late 05 for god’s sake. Also, some emails came out from 2006 that showed MBS traders were quite aware it was going to blow up. I’m sure many people knew it was a problem but very few knew the extent because they all lie to each other and only a select few have access to all the information i.e Fed-Treasury. I think Greenspan, probably, was a useful idiot that they could dump the who thing on when it all blew up.

For politicians, on the other hand, I think a more accurate description, would be they just did not give a shit and really have very little respect for the people they supposedly lead. That, at least, should be obvious. And few who raised a hand in protest, from time to time, probably did so for political reasons. Kind of like the democrats regarding the war. Most knew we were going to be there indefinitely but that did not stop them from picking up some constituent brownie points along the way.

I think, most politicians are so caught up in their own theater of telling people what they think they want to hear(script is contingent on party) coupled with non-stop scheming and *posturing* that they become disconnected from reality. A virtual Kabuki-theater of greedy, pathological liars that can’t distinguish truth from lies and have mastered the art of “plausible deniability”. It’s not an environment conducive to good governance. If politicians don’t learn to play the game fast, they get chewed up and spit out quickly. The few that don’t lose themselves are marginalized.

Wall street, OTOH, in general, is a coal-fired furnace of myopic greed with not an iota of care in the world to what happens out side their virtual Versailles. Crisis and conspiring, really, is a feature rather than an anomaly. They just happen to be getting bigger as time goes on.

[Arraya]

[quote=CA renter] Everybody in power knew, and they knew exactly how this game was going to end (govt bailouts which would result in even more wealth for themselves, while the taxpayers and J6 would be screwed for life).[/quote]

Well, it’s apparent that Wall Street-Treasury-Fed block did. I mean they were working on confirming an expert of the depression in late 05 for god’s sake. Also, some emails came out from 2006 that showed MBS traders were quite aware it was going to blow up. I’m sure many people knew it was a problem but very few knew the extent because they all lie to each other and only a select few have access to all the information i.e Fed-Treasury. I think Greenspan, probably, was a useful idiot that they could dump the who thing on when it all blew up.

For politicians, on the other hand, I think a more accurate description, would be they just did not give a shit and really have very little respect for the people they supposedly lead. That, at least, should be obvious. And few who raised a hand in protest, from time to time, probably did so for political reasons. Kind of like the democrats regarding the war. Most knew we were going to be there indefinitely but that did not stop them from picking up some constituent brownie points along the way.

I think, most politicians are so caught up in their own theater of telling people what they think they want to hear(script is contingent on party) coupled with non-stop scheming and *posturing* that they become disconnected from reality. A virtual Kabuki-theater of greedy, pathological liars that can’t distinguish truth from lies and have mastered the art of “plausible deniability”. It’s not an environment conducive to good governance. If politicians don’t learn to play the game fast, they get chewed up and spit out quickly. The few that don’t lose themselves are marginalized.

Wall street, OTOH, in general, is a coal-fired furnace of myopic greed with not an iota of care in the world to what happens out side their virtual Versailles. Crisis and conspiring, really, is a feature rather than an anomaly. They just happen to be getting bigger as time goes on.

[SD Realtor]

That is the thing. I am not democrat or republican but I marvel at those who defend each party simply because they think that this is the best we can do. SK you seem to be plenty satisfied with guys like Frank and Dodd and others like them. It doesn’t matter to me which party they belong to. I woul dpresume if Frank was not a democrat you guys would be all over him.

No Fannie and Freddie are not the reasons for the crash.

However this is what it all boils down to:

Quote from CAR:

“Everybody in power knew, and they knew exactly how this game was going to end (govt bailouts which would result in even more wealth for themselves, while the taxpayers and J6 would be screwed for life).”

So you are going to put a burden of me going on to find the hard evidence of this. They all knew. Frank knew, republicans knew, democrats knew, Roubini knew, they all did. The entire system is so horribly corrupt with lobby and greed that it is a joke. The really sad thing is people who are satisfied with it, who defend those who participated in it, and continue to support those criminals.

I do not.

If it means throwing away my vote for guys like Paul and other fringe types so be it.

You continue your defense for those who WERE IN POSITIONS OF AUTHORITY while it all went down.

[SD Realtor]

That is the thing. I am not democrat or republican but I marvel at those who defend each party simply because they think that this is the best we can do. SK you seem to be plenty satisfied with guys like Frank and Dodd and others like them. It doesn’t matter to me which party they belong to. I woul dpresume if Frank was not a democrat you guys would be all over him.

No Fannie and Freddie are not the reasons for the crash.

However this is what it all boils down to:

Quote from CAR:

“Everybody in power knew, and they knew exactly how this game was going to end (govt bailouts which would result in even more wealth for themselves, while the taxpayers and J6 would be screwed for life).”

So you are going to put a burden of me going on to find the hard evidence of this. They all knew. Frank knew, republicans knew, democrats knew, Roubini knew, they all did. The entire system is so horribly corrupt with lobby and greed that it is a joke. The really sad thing is people who are satisfied with it, who defend those who participated in it, and continue to support those criminals.

I do not.

If it means throwing away my vote for guys like Paul and other fringe types so be it.

You continue your defense for those who WERE IN POSITIONS OF AUTHORITY while it all went down.

[SD Realtor]

That is the thing. I am not democrat or republican but I marvel at those who defend each party simply because they think that this is the best we can do. SK you seem to be plenty satisfied with guys like Frank and Dodd and others like them. It doesn’t matter to me which party they belong to. I woul dpresume if Frank was not a democrat you guys would be all over him.

No Fannie and Freddie are not the reasons for the crash.

However this is what it all boils down to:

Quote from CAR:

“Everybody in power knew, and they knew exactly how this game was going to end (govt bailouts which would result in even more wealth for themselves, while the taxpayers and J6 would be screwed for life).”

So you are going to put a burden of me going on to find the hard evidence of this. They all knew. Frank knew, republicans knew, democrats knew, Roubini knew, they all did. The entire system is so horribly corrupt with lobby and greed that it is a joke. The really sad thing is people who are satisfied with it, who defend those who participated in it, and continue to support those criminals.

I do not.

If it means throwing away my vote for guys like Paul and other fringe types so be it.

You continue your defense for those who WERE IN POSITIONS OF AUTHORITY while it all went down.

[SD Realtor]

That is the thing. I am not democrat or republican but I marvel at those who defend each party simply because they think that this is the best we can do. SK you seem to be plenty satisfied with guys like Frank and Dodd and others like them. It doesn’t matter to me which party they belong to. I woul dpresume if Frank was not a democrat you guys would be all over him.

No Fannie and Freddie are not the reasons for the crash.

However this is what it all boils down to:

Quote from CAR:

“Everybody in power knew, and they knew exactly how this game was going to end (govt bailouts which would result in even more wealth for themselves, while the taxpayers and J6 would be screwed for life).”

So you are going to put a burden of me going on to find the hard evidence of this. They all knew. Frank knew, republicans knew, democrats knew, Roubini knew, they all did. The entire system is so horribly corrupt with lobby and greed that it is a joke. The really sad thing is people who are satisfied with it, who defend those who participated in it, and continue to support those criminals.

I do not.

If it means throwing away my vote for guys like Paul and other fringe types so be it.

You continue your defense for those who WERE IN POSITIONS OF AUTHORITY while it all went down.

[Author]

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