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Sarah Palin fumbles on Fannie, Freddie
Chicago tribune ^ | Sept. 8 08 | Frank James

Posted on 09/08/2008 2:22:19 PM PDT by Rennes Templar

Alaska Gov. Sarah Palin stumbled this weekend when she commented on the federal takeover of mortgage giants Fannie Mae and Freddie Mac. The Huffington Post "helpfully" pointed out her mistake to anyone who missed it the first time around.

Speaking before voters in Colorado Springs, the Republican vice presidential nominee claimed that lending giants Fannie Mae and Freddie Mac had "gotten too big and too expensive to the taxpayers." The companies, as McClatchy reported, "aren't taxpayer funded but operate as private companies.

The takeover may result in a taxpayer bailout during reorganization."

Economists and analysts pounced on the misstatement, saying it demonstrated a lack of understanding about one of the key economic issues likely to face the next administration.

"You would like to think that someone who is going to be vice president and conceivable president would know what Fannie and Freddie do," said Dean Baker, co-director of the Center for Economic and Policy Research. "These are huge institutions and they are absolutely central to our country's mortgage debt. To not have a clue what they do doesn't speak well for her, I'd say."

- snip-

Palin just got a bit ahead of the facts. Now that the federal government has taken over the companies, taxpayers will likely be on the hook now for maybe hundreds of billions of dollars. Perhanps she was just looking ahead.

(Excerpt) Read more at swamppolitics.com ...


TOPICS: Extended News; Front Page News; News/Current Events
KEYWORDS: 2008veep; demmeltdown; dempanic; demsgoingape; fanniemae; freddiemac; mcainpalin08; mccainpalin08; mediabias; palin; wastefulspending
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"..and too expensive to the taxpayers"

They assume she means the taxpayers are funding Fannie. Did she mean overreaching homeowners who pay taxes otherwise?

1 posted on 09/08/2008 2:22:19 PM PDT by Rennes Templar
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To: Rennes Templar
Sharpen up, Sarah.

Us taxpayers are getting the bill for this “bailout”.

POINT OUT that the DEMS made credit EASY - “no money down” through reckless legislation.

2 posted on 09/08/2008 2:25:07 PM PDT by nmh (Intelligent people recognize Intelligent Design (God).)
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To: Rennes Templar
Perhanps she was just looking ahead.

Perhaps voters are sick of nitpicking pinheads like you just waiting to jump on a verb tense while discarding the underlying truth of what is being said, while also completely ignoring the role former Fannie Mae executives have played in the Obama campaign.

Enjoy your ride to the ocean floor on the SS Titanic Ego. I know I'll enjoy watching it.

3 posted on 09/08/2008 2:25:16 PM PDT by dirtboy
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To: Rennes Templar

It’s possible... JUST POSSIBLE... that she isn’t practically perfect in every way...

She’s still my hope for the future. Eat that, Huffpo!


4 posted on 09/08/2008 2:25:23 PM PDT by pgyanke (Public "servants" have decided it's their job to use the public's money to fight the public)
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To: Rennes Templar

ah yes, the Chicago Tribune, that bastion of impartiality...


5 posted on 09/08/2008 2:25:32 PM PDT by xDGx
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http://michellemalkin.com/2008/09/08/huffing-huffpo-desperate-for-a-gop-gaffe/


6 posted on 09/08/2008 2:25:46 PM PDT by KavMan
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To: Rennes Templar

As it turns out, it appears that federal dollars will be used to bail these corporations out. Not good.


7 posted on 09/08/2008 2:26:00 PM PDT by econjack (Some people are as dumb as soup.)
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To: Rennes Templar

They are tax payer funded now.


8 posted on 09/08/2008 2:26:15 PM PDT by TASMANIANRED (TAZ:Untamed, Unpredictable, Uninhibited.)
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To: Rennes Templar
This is complete baloney. Pretty much everyone on the planet who has followed this story knew that the federal government -- that means us taxpayers -- would ultimately have to bail out Fannie and Freddie. Or as NR's media blog explains it:

Palin's point was obviously that 1. Fannie and Freddie have always been a huge liability for taxpayers, because 2. everyone knew that the government would bail them out if they failed, and 3. a McCain-Palin administration would use the government's new authority over Fannie and Freddie to shrink these beasts down to size and protect taxpayers in the future.

9 posted on 09/08/2008 2:26:17 PM PDT by kesg
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To: dirtboy

Pinicking pric*heads you mean.


10 posted on 09/08/2008 2:26:31 PM PDT by screaminsunshine
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To: Rennes Templar

Considering the takeover ... the taxpayers on now on the hook for Fannie & Freddie.


11 posted on 09/08/2008 2:26:57 PM PDT by taxcontrol
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To: Rennes Templar

A liberal Chicago paper citing the Huffington Post who “helpfully” pointed out her take to anyone who missed it the first time around.

More sick media.


12 posted on 09/08/2008 2:27:15 PM PDT by soycd
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To: Rennes Templar

Too expensive for the taxpayers? How can anyone disagree with that? If it wasn’t obvious on Friday that they are too expensive for the taxpayers, it should be today.


13 posted on 09/08/2008 2:27:45 PM PDT by Brilliant
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http://www.deanesmay.com/2008/09/08/sorry-not-a-gaffe/


14 posted on 09/08/2008 2:27:47 PM PDT by KavMan
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To: Rennes Templar

Oh, no! Stop the presses! Gov. Palin made a faux paux.

This changes everything. No one will vote for them now. Oh, my, what ever are we gonna’ do?


15 posted on 09/08/2008 2:28:01 PM PDT by papasmurf (I ain't your Daddy's Conservative, OK?)
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To: Rennes Templar

I thought these were quasi-government/private companies. Not totally private.


16 posted on 09/08/2008 2:28:19 PM PDT by Twotone
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To: Rennes Templar

In the end, the taxpayers are funding Fannie. That’s exactly what a federal guarantee means...unfortunately.


17 posted on 09/08/2008 2:29:34 PM PDT by rushmom (l)
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Comment #18 Removed by Moderator

To: nmh
POINT OUT that the DEMS made credit EASY - “no money down” through reckless legislation.

Specifically through amendments to the Community Redevelopment Act pushed through by the Clinton administration in the mid 90's.

19 posted on 09/08/2008 2:29:55 PM PDT by Cementjungle
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To: Rennes Templar

In other news...Sarah Palin chipped a nail today! Do you really want a VP with chipped nails? If she can’t keep her nails in order, how can she effectively be a heart beat away from the most powerful position in the world?! HUH?! HUH?! HUH?! WELL?!!


20 posted on 09/08/2008 2:30:01 PM PDT by albie
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To: Rennes Templar

Fannie and Freddie have always had the implied backing of the US government so they might as well be.


21 posted on 09/08/2008 2:30:03 PM PDT by leadpencil1 (Barack Hussein Ayers Madrassa Wright Khaladi Asbahi Said Abunimah Farrakhan al-Mansour Alinsky Obama)
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To: kesg

Bingo. She made no mistake here.

Next watch Saracuda dive into these yammering mollusks with a lecture on how to interpret the English language.


22 posted on 09/08/2008 2:30:14 PM PDT by Hostage
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To: Rennes Templar

Technically, she’s right - Treasuries probably have higher yields because investors in Treasuries are aware of the overhang of agency debt out there that may suddenly be added to the Treasury’s balance sheet. The nationalization of Fannie and Freddie shows that they were right all along.


23 posted on 09/08/2008 2:30:14 PM PDT by Zhang Fei
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To: pgyanke
I was more disapointed by Gov. Palin’s understanding of the “Pledge of Allegiance” than I am her understanding of Fannie & Freddie.
24 posted on 09/08/2008 2:30:17 PM PDT by trumandogz
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To: pgyanke
It’s possible... JUST POSSIBLE... that she isn’t practically perfect in every way...

Wrong. She is indeed perfect in every way. Including on this issue, where she was, and is, absolutely right.

The federal governmant was always going to take the ultimate hit for the irresponsible risks that Fannie and Freddie exposed itself to. And that means the taxpayers. Everyone in Washington DC knew that.

25 posted on 09/08/2008 2:30:48 PM PDT by kesg
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To: soycd

“A liberal Chicago paper citing the Huffington Post who “helpfully” pointed out her take to anyone who missed it the first time around.”

Just a hint of what’s to come in the 2 months. Every word will be parsed.


26 posted on 09/08/2008 2:31:00 PM PDT by Rennes Templar (If the election were today, Obama would win.........in Europe.)
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To: Rennes Templar

Fannie Mae was founded as a government agency.


27 posted on 09/08/2008 2:31:40 PM PDT by Retired Chemist
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To: Rennes Templar
Speaking before voters in Colorado Springs, the Republican vice presidential nominee claimed that lending giants Fannie Mae and Freddie Mac had "gotten too big and too expensive to the taxpayers." The companies, as McClatchy reported, "aren't taxpayer funded but operate as private companies.

But they are taxpayer guaranteed- and taxpayers are having to bail them out, so yes, Palin was right.

28 posted on 09/08/2008 2:31:44 PM PDT by mnehring (Mavrick/Barracuda 2008)
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To: Rennes Templar
“too expensive to the taxpayers.”

Really not a misstatement.
They have realistically gotten expensive for the tax payers and they were when she made the statement.
Taxpayers were already on the hook at least a month or so ago

29 posted on 09/08/2008 2:32:15 PM PDT by HereInTheHeartland (Help fight the left's anointed candidate, contribute and work for McCain/Palin..)
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To: Twotone

Fannie and Freddie have always stood on an “implicit” federal government guarantee. As the bailout shows, the taxpayers have always been on the hook for these grotesque creations, and everybody knows it. Sarah did not mess up.


30 posted on 09/08/2008 2:32:46 PM PDT by oilwatcher
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To: Brilliant
If it wasn’t obvious on Friday that they are too expensive for the taxpayers, it should be today.

Insert "well, duh!" here. And you had to be an utterly clueless leftie to think that Fannie and Freddie were actually "private" corporations. There was no way that the federal government was going to allow them to fail, even if this meant billions of dollars in a taxpayer bailout (which is now upon us).

31 posted on 09/08/2008 2:33:04 PM PDT by kesg
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To: Rennes Templar

Fannie and Freddie are considered GSE’s (Government Sponsored Enterprises) and as such have the “full faith” of the US government behind them. “Full Faith” meaning a bail out if need be.


32 posted on 09/08/2008 2:33:35 PM PDT by Mashood
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To: kesg
Relax... it was sarcasm directed at Huffpo who are looking for anything for us to disown her.
33 posted on 09/08/2008 2:33:57 PM PDT by pgyanke (Public "servants" have decided it's their job to use the public's money to fight the public)
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To: kesg
Relax... it was sarcasm directed at Huffpo who are looking for anything for us to disown her.
34 posted on 09/08/2008 2:33:57 PM PDT by pgyanke (Public "servants" have decided it's their job to use the public's money to fight the public)
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To: Brilliant
Too expensive for the taxpayers?

It's not just today's bailout. The federal government had to revamp FHA to acquire the failed loans Fannie/Freddie wrote.

35 posted on 09/08/2008 2:33:57 PM PDT by GVnana ("The American presidency is not supposed to be a journey of personal discovery.")
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To: Rennes Templar

Folks, there are going to be gaffes. Get used to it. Just a fact of life.


36 posted on 09/08/2008 2:33:59 PM PDT by dforest
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To: Rennes Templar

The taxpayers ARE funding Fannie/Freddie. They have been since the Congress passed the “bailout” bill in July where SecTreas Paulson was giving his “bazooka” of $330 BILLION dollars.

That isn’t some magic fairy tale money. That’s TAXPAYER MONEY that the Congress voted to give Paulson to bail out the GSE’s.

$330 Billion here, another few hundred billion there (when, not if, the current Treasury plan fails to stop more foreclosures and mortgage defaults) and pretty soon, bailing out Fannie/Freddie is going to make the S&L bailout look like chump change.


37 posted on 09/08/2008 2:34:11 PM PDT by NVDave
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To: KavMan

Good find. But look at the link in the middle...http://ace.mu.nu/archives/272836.php.

Meanwhile, in a total non-gaffe Obama identifies one of those 57 states he’s been campaigning in: New Pennsylvania!

Ha!


38 posted on 09/08/2008 2:34:25 PM PDT by papasmurf (I ain't your Daddy's Conservative, OK?)
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To: Rennes Templar
Was it really a fumble?

What Are the Origins of Freddie Mac and Fannie Mae?

By Rob Alford

Mr. Alford is a student at the University of Washington and an HNN intern.

In recent months, the nation's two largest mortgage finance lenders have come under increasing scrutiny at the hands of Congress, the Justice Department and the Securities and Exchange Commission (SEC). The Federal National Mortgage Association, nicknamed Fannie Mae, and the Federal Home Mortgage Corporation, nicknamed Freddie Mac, have operated since 1968 as government sponsored enterprises (GSEs). This means that, although the two companies are privately owned and operated by shareholders, they are protected financially by the support of the Federal Government. These government protections include access to a line of credit through the U.S. Treasury, exemption from state and local income taxes and exemption from SEC oversight. A recent accounting scandal at Freddie Mac that resulted in the replacement of three of the company's top executives has led to mounting concerns over the privileged status these GSEs enjoy in the marketplace.

Fannie Mae was created in 1938 as part of Franklin Delano Roosevelt's New Deal. The collapse of the national housing market in the wake of the Great Depression discouraged private lenders from investing in home loans. Fannie Mae was established in order to provide local banks with federal money to finance home mortgages in an attempt to raise levels of home ownership and the availability of affordable housing.

Initially, Fannie Mae operated like a national savings and loan, allowing local banks to charge low interest rates on mortgages for the benefit of the home buyer. This lead to the development of what is now known as the secondary mortgage market. Within the secondary mortgage market, companies such as Fannie Mae are able to borrow money from foreign investors at low interest rates because of the financial support that they receive from the U.S. Government. It is this ability to borrow at low rates that allows Fannie Mae to provide fixed interest rate mortgages with low down payments to home buyers. Fannie Mae makes a profit from the difference between the interest rates homeowners pay and foreign lenders charge.

For the first thirty years following its inception, Fannie Mae held a veritable monopoly over the secondary mortgage market. In 1968, due to fiscal pressures created by the Vietnam War, Lyndon B. Johnson privatized Fannie Mae in order to remove it from the national budget. At this point, Fannie Mae began operating as a GSE, generating profits for stock holders while enjoying the benefits of exemption from taxation and oversight as well as implied government backing. In order to prevent any further monopolization of the market, a second GSE known as Freddie Mac was created in 1970. Currently, Fannie Mae and Freddie Mac control about 90 percent of the nation's secondary mortgage market. GSEs such as Fannie Mae and Freddie Mae, with their combination of private enterprise and public backing have experienced a period of unprecedented financial growth over the past few decades. The current assets of these two companies combine for a total that is 45 percent greater than that of the nation's largest bank.

On the other hand, their combined debt is equal to 46 percent of the current national debt. It is this combination of rapid growth and over leveraging that has lead to the current concerns of Congress, the Justice Department and the SEC with regards to the financial practices of these GSEs.

Fannie Mae and Freddie Mac are the only two Fortune 500 companies that are not required to inform the public about any financial difficulties that they may be having. In the event that there was some sort of financial collapse within either of these companies, U.S. taxpayers could be held responsible for hundreds of billions of dollars in outstanding debts. A recent investigation by the Justice Department and the SEC into the accounting practices at Freddie Mac revealed accounting errors in the amount of 4.5 to 4.7 billion dollars and resulted in the termination of three of the company's top executives. Ongoing investigations by Congress, particular the House Finance Services subcommittee that oversees the activity of GSEs, will determine the future role of Fannie Mae and Freddie Mac and the secondary mortgage market that they dominate.

39 posted on 09/08/2008 2:34:32 PM PDT by pby
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To: kesg

exactly. they don’t operate like private companies. This is what happens when you privatize the profits and socialize the risks.

Freddie/fannie was an key part of Bush’s “compassionate conservatism.” It’s another way for mccain to distance himself from Bush, along with spending and the value of the dollar.


40 posted on 09/08/2008 2:34:56 PM PDT by ari-freedom (We never hide from history. We make history!)
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To: Rennes Templar

..also, technically, both Fannie and Freddie are GSE’s, Government Sponsored Enterprises. In addition to the bail out, each year they have access to about $2Billion in a standing line of credit from the U.S. Treasury Department. Line of credit paid for by, guess who, the US Taxpayer.


41 posted on 09/08/2008 2:36:46 PM PDT by mnehring (Mavrick/Barracuda 2008)
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To: papasmurf

Maybe one of those extra seven states is home to the Nittaly Lions football team.


42 posted on 09/08/2008 2:36:50 PM PDT by Brett66 (Where government advances, and it advances relentlessly , freedom is imperiled -Janice Rogers Brown)
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To: Rennes Templar
As Fred Smith, president of the Washington, D.C-based Competitive Enterprise Institute, has noted, these financial beasts are a textbook example of “profit-side capitalism and loss-side socialism.” When things go right for Freddie Mac and Fannie Mae, they keep the profits. But when things go wrong, taxpayers — not just private shareholders, managers, and employees — will be on the hook.

 

  Photobucket

43 posted on 09/08/2008 2:37:08 PM PDT by 1035rep (McCain/Palin 08)
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To: Rennes Templar

I’d say 100 billion dollars in taxpayer money is too expensive. Too damned expensive as a matter of fact. And it can all be traced to the Community Redevelopment Act. Congress needs what McCain and Palin will bring I think, they sure the hell need something.


44 posted on 09/08/2008 2:37:32 PM PDT by jwalsh07 (Sarah Palin Pro Life, Pro Gun, Pro America, Thank you Lord! :-})
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To: KavMan
Michelle Malkin is absolutely correct. This is not a gaffe.

If it had been Countrywide (whose customers include some rather prominent Democrats, by the way), yes it would have been a faux paux, but it was not...so Arianna and her Huffing Puffing foot soldiers need to do some boning up on the Freddy/Fanny Massacre themselves.

45 posted on 09/08/2008 2:37:56 PM PDT by T Lady (The Mainstream Media: Public Enemy #1)
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To: indylindy

Except this one isn’t a gaffe.. see subsequent posts.


46 posted on 09/08/2008 2:38:12 PM PDT by mnehring (Mavrick/Barracuda 2008)
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To: nmh

I heard today Demonrat Andrew Cuomo the son of the great “fatcheem” Mario cuomo had much to do with raising the cieling on the amount of loans and guarnetees that the feds would cover on these knowingly bad loans. any info?


47 posted on 09/08/2008 2:38:54 PM PDT by ronnie raygun (IF YOU ARE NOT CONSERVATIVE BY 35 YOU HAVE NO BRAIN. W CHURCHILL)
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To: Rennes Templar
"You would like to think that someone who is going to be vice president and conceivable president would know what Fannie and Freddie do," said Dean Baker

When the same question was posed to BHObama, his response:

Fannie? Fannie got "back" and Freddie's Dead.....

48 posted on 09/08/2008 2:39:02 PM PDT by Hot Tabasco (Wedgie Syndrome: The inability to recognize humor by individuals alwayls looking for an argument)
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To: albie
In other news...Sarah Palin chipped a nail today!

She certainly has Photobucket on the run!

49 posted on 09/08/2008 2:39:15 PM PDT by 1035rep (McCain/Palin 08)
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To: Cementjungle

The reason pracitcally nobody is critisizing the takeover/bailout is nobody can think of another solution.

The government was already on the hook for the money.

The alternative of letting both fail and plunging the economy into a deep recession may sound nice from a purists/libertarain standpoint, but not many people that actually live in the real work like the idea.

Both parties got us into this mess over several decades. The original premise of having a private instituion guranteed by the government was flawed because it didn’t take into accout the size Freddy and Fannie could grow to.

It looks like the people that owned stock in both are going to get screwed. Fine. No different that when any other company goes under.


50 posted on 09/08/2008 2:39:29 PM PDT by Brookhaven
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