Posted on 10/05/2008 5:34:42 AM PDT by pennboricua
A decision, made under pressure from Congress and investors, to steer Fannie Mae into dangerous corners of the mortgage market proved to be disastrous.
(Excerpt) Read more at nytimes.com ...
With respect to the “greed” charge that is the current meme, he asked a simple question: if greed could be satisfied by lending to this segment of the population, why would HUD have to force banks to write the business??
This question destroys the greed charge. “Wall Street” financial institutions were up-stream, so to speak, on the flow of mortgage paper from the firms that sold the mortgages to the homeowner. When several government agencies and the Treasury department themselves were all scoring market participants on what percent of their total loans went to targeted economic groups, how is it “greed” when these businesses figure out efficient ways to handle the deals and make money off them??
Economist and professor Donald Boudreaux wrote a delightful comeback to this charge on the Cafe Hayek blog:
“Saying that “greed” caused today's problems is like saying that gravity caused the death of someone pushed from the top floor of the Empire State building. Some things are sufficiently constant in human affairs - and self-interest, even greed, is among them - that they explain nothing.”
The Timeline Project / Link List of Bailout History
http://www.freerepublic.com/focus/f-bloggers/2093845/posts
Adding this to the Timeline Project. FRegards ....
Republicans need to (casually) refer to this as
The Democrats will object of course....but the truth needs to be spread in a simple, yet memorable, way.
Let Barney Frank sputter in indignation.
Democrats betrayed the public trust.
We don't want them to continue to run our economy into the ground.
We need real change.
But by the time Mr. Mudd became Fannie’s chief executive in 2004, his company was under siege. Competitors were snatching lucrative parts of its business. Congress [GOP at the time, eh? - dirboy] was demanding that Mr. Mudd help steer more loans to low-income borrowers. Lenders were threatening to sell directly to Wall Street unless Fannie bought a bigger chunk of their riskiest loans.
What about the role of Franklin Raines? Why, initially, he seems like a miracle worker, from his initial mention in paragraph 13:
Just two decades earlier, Fannie had been on the brink of bankruptcy. But chief executives like Franklin D. Raines and the chief financial officer J. Timothy Howard built it into a financial juggernaut by aiming at new markets.
You have go DEEP into the article to get the details that show the Dem role here. You have to click on the web version to go to page 2, and I imagine in the print edition, the Dem malfeasance comes after the Page A1 copy. The accounting fraud is mentioned (but not quantified at $10 billion). Barney Frank is mentioned well after the halfway point of the article.
This is CLASSIC NY Times positional reporting.
I remember reading a great business book by Jim Collins called “Good To Great”. It talked about the principles, philosophy, leadership and approach that the “Great Companies” all seemed to make, distinguishing themselves from other “good companies”. I can’t remember his criteria for selecting “Great” companies (I don’t have my copy handy) but it was a reflection of the stock appreciation, return on equity, etc. etc.
In his book, there were only some 11 companies (out of the 500 some companies that I think he screened) that he considered having made the leap from Good to Great. Any Fannie Mae was among them. Looking at Amazon.com, I note that the book was first published in 2001. I’m not sure if that was the original First Edition or a follow-up hardcover.
But I remember that Fannie Mae’s “hedgehog concept” was to be a full capital markets player (as good as any other) and to develop its unique capability to assess risk in mortgage related securities. That latter point was what they were “The Best In The World” at. And the thing that drives their economic engine was “Profit Per Mortgage Risk Level”.
I don’t know if Collins has written about “whatever became of Fannie Mae” or not (he also had Wells Fargo among his “Good To Great” companies) but it would be fascinating to hear. And I sense that Barney Frank and Congress can and should be blamed for pushing this once “great” compnay (according to Collins) over the edge and turning it into the Black Hole that may have sucked down our entire financial system.
Professor Collins, if you’re smart enough to be reading this blog: now there’s a project for you!
This is the Change we need!
New York Times Not Fish Wrap for a ‘Change’.
And how deep in the article is that quote buried? And there is no mention that the White House proposed reforms for Fannie and that Barney Frank blocked those reforms.
Ah...for a minute there I though this in the NYT. Must be early...coffee time.
I believe this article like the ayers article gives the ammo to Gov. Palin to make the bailout issue the issue from here on, the Times have published articles from the 1990s pointing out what just happened and it was the dem leadership that refused to take measures to prevent what just happened from happening.
If the economy is the issue from now on then the rats and culprits have to be pointed out, I wish on her next campaign speech they would play all the You Tube videos of the Dems, from the meeting with the Congresional Black Caucus, to the oversight committees under Franks and Dobbs,
on a giant screen prior to her starting talking.
She can get move this back to the front pages and directly into the American mind, those that have not totally closed it anyways.
The NYT has identified the fall guys Democrats will focus on: Daniel Mudd, who took over in 2004 and is portrayed in this article as a know nothing, incompetent pansy completely out of his league and Angelo Mozilo of Countrywide, who it is claimed by anonymous sources (of course) that he pressured and threatened Mudd into taking on toxic loans from Countrywide or else Countrywide was not going to do any more business with Fannie M.
As dirtboy wrote, the article does mention Democrats' involvement in exhorting Fannie M. to take on more high risk mortgages, but you have to get to page 3 to read about that and even then, it's portrayed as Democrats just trying to help out the little guy.
My advice to Mudd and Mozilo - INCOMING MISSILES LASER GUIDED TOWARD YOU. Better sign on some good attorneys - maybe F. Lee Levin is available because you're going to be starting right up Waxman's nostrils in a couple of months.
Show me where the article gets after the Dem leadership. This is a whitewash, pure and simple, just as the Slimes also whitewashed the Obama/Ayers relationship.
that they did, and you know that it is currently in more MSM than it was pryor to Gov. Palin making an issue of that article, I believe in whitewashing the fiasco in this article it opens the door for Sarah to point out more aggresively what they left out.
Turning Fannie Mae into the Black Hole that may have sucked down our entire financial system.
This must be the "change" Obama was talking about as he took a position of leadership while representing ACORN as a community organizer, ahem (and lawyer).
Follow this link, contributed by someone on an unfortunately locked thread, for the best summation I've seen. From a somewhat unexpected source.
Cleverly papering over bad paper (legislation) papering over bad paper (subprime mortgages)
And so it goes...the machinations of criminals, their accomplices, their sycophants, their propagandists.
Now, legal plunder can be committed in an infinite number of ways. Thus we have an infinite number of plans for organizing it: tariffs, protection, benefits, subsidies, encouragements, progressive taxation, public schools, guaranteed jobs, guaranteed profits, minimum wages, a right to relief, a right to the tools of labor, FREE CREDIT, and so on, and so on. All these plans as a whole — with their common aim of legal plunder — constitute socialism. - “The Law” - Frederic Bastiat (CAPS MINE)
No investigation, no root cause determined, no criminals prosecuted. Neat, tidy, done. See, hear, speak no evil.
Wonderful quote! I'm going to write to the blog and see if they'll let me cite it in a letter I am writing to my (Catholic) pastor, who gave a Respect Life Sunday homily that essentially said abortion wasn't that crucial an issue, greed under the current political leadership had led us to a situation where people weren't "being taken care of" by the government and thus we weren't expressing "pro-life attitudes," and Catholics had to vote for "change." This, of course, was his way of saying what he didn't dare come out and say, which was that Catholics should vote for Obama.
It won't do much good, but I'm writing a letter to the pastor and the bishop (who unfortunately shares his opinions), and sending a copy to the appropriate NCCB office.
I am sick and tired of this "greed" theme that, as the writer said, is a constant and explains absolutely nothing in itself.
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