Tell the truth now. Did you know there was trouble brewing in the housing market? Did you see the coming economic storm? We’re you shocked when not-so-smart people in our government started espousing the need to ‘bailout’ certain financial companies? Seriously?
The signs have been there for a couple of years. If you’re one to keep your head in the sand (like many politicians on the House Financial Services Committee) you might not have seen those signs, but for those of us who happen to have more than a pea for a brain, we saw the signs. We knew it was just a matter of time before lending institutions would begin to crumble, and now it has happened.
Financial institutions are crumbling and it’s all because Fannie Mae and Freddie Mac have imploded. Maybe things wouldn’t have gotten so bad if Fannie and Freddie were not required to purchase all of those bad loans in the first place. Then again, things could be much worse. The American people could lay blame on Congress, where it belongs, because they failed to take action that could have prevented this whole mess.
There’s no need to keep rehashing the same facts. Rep. Barney Frank and Sen. Chris Dodd were instrumental in keeping oversight and responsibility off of Fannie and Freddie’s welcome mat, there is no doubt about that. Some of their fellow Democrats helped them in their endeavors. The only people denying that fact, are Frank and Dodd themselves. It’s about time they stopped denying their involvement and accepted the blame. Of course, when was the last time you saw a Democrat in any position of power fall on their own sword for their country?
Both presidential candidates claim they were first when it came to warning Congress about the impending crisis, but only one of them has told the truth about that. How do I know this? I know this because John McCain first raised the flag as early as 2003, while Barack Obama was still organizing his community.
John McCain tried again in 2005, but Democrats once again worked together to stop all possibility of lending reform. McCain sent letters and warned Congress several times, while Barack Obama was busy taking more money from Fannie and Freddie than any other Senator (except Dodd).
The Winds Of Change has an excellent review of the housing crisis (along with graphs) that helps explain exactly what went wrong, why Fannie and Freddie were important, and what the biggest driver of foreclosure rates has been.
Because the far-and-away largest institutions in the market, Fannie and Freddie, added risky loans to their portfolio while they were immensely overleveraged – putting them significantly at risk. But their securities were still treated as something other financial institutions could use as equity, meaning that they could in turn highly leverage them. So when Fannie and Freddie were shaken, the effects on the balance of the highly leveraged financial industry were vastly amplified.
John McCain and nineteen other senators signed a letter in 2006 asking for regulatory reform to keep an eye on Fannie and Freddie. Barack Obama didn’t sign that letter in 2006. In fact, no Democrats signed that letter. Sound familiar?
For weeks now I have heard Speaker of the House Nancy Pelosi claiming that President Bush’s policies are responsible for this mess. Sorry Nanny State Nancy, but that’s just not true. Congress is responsible for creating the laws, regulations, and oversight needed that would have stopped this problem dead in its tracks. Your Congress. The one you and Scary Harry Reid control. It’s time to buck up and tell it like it is. You have failed the American people, and you know it. Now you’re trying every play in the book to make sure those who are uninformed become misinformed.
John McCain has a proven track record of trying to reform the financial industry, while Barack Obama has words. He talks a lot about change, yet for the past few years he has done nothing to bring change to the corruption in the housing industry. In fact, he has been close with several former Fannie Mae CEO’s, accepting more money from them in his short political career than all but one other Senator.
I read tonight that Fannie and Freddie, now that they are government entities, are being told to purchase $20 billion a month in troubled mortgage bonds. Not mortgages, but the investments that were made on those bad sub-prime mortgages themselves. Of course, this action has nothing to do with the $700 billion bailout that passed Congress more than a week ago.
I thought the purpose of the bailout was to purchase all the bad debt? I thought the bailout was supposed to take care of the problem with the troubled mortgage bonds? If not, what was it for? Why are we dumping more bad debt on Fannie and Freddie? Isn’t that what got us into this trouble in the first place?
The dust from this fiasco hasn’t even settled yet and they’re moving more and more bad debt in ways even the best economists never thought was imaginable. This whole thing is unimaginable. Just think, the warning signs have been there for at least five years and nobody paid attention.