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Bloomberg Hides Government Causes of Financial Crisis ^ | January 8, 2012 | Peter Ferrara

Posted on 01/08/2012 9:30:41 AM PST by Kaslin

On December 21, Bloomberg News breathlessly reported, "The leading Republican candidates for president have embraced an explanation of the financial crisis that has been rejected by the chairman of the Federal Reserve, many economists and even three of the four Republicans on the government commission that investigated the meltdown."

Reporter David J. Lynch further explained, "Both former House Speaker Newt Gingrich and former Massachusetts Governor Mitt Romney lay much of the blame on U.S. government housing policies, saying they led to the real estate crash that almost brought down the banking system and has cost homeowners $6.6 trillion since 2006."

But it's not just Gingrich and Romney. Virtually every Republican and conservative across America recognizes what is by now well established in the literature -- the government caused the financial crisis.

Among the leading expositions of that government malfeasance are Paul Sperry, The Great American Bank Robbery: The Unauthorized Report About What Really Caused the Financial Crisis (Thomas Nelson, 2011), Gretchen Morgenson and Joshua Rosner, Reckless Endangerment (Times Books, 2011), John B. Taylor, Getting Off Track (Hoover Institution Press, 2009), and many contributions by Peter Wallison, including in particular his Dissenting Statement in Final Report of the National Commission on the Causes of the Financial and Economic Crisis in the United States (December 24, 2010). My own book, America's Ticking Bankruptcy Bomb (HarperCollins, 2011), explains in great detail how the government caused the financial crisis.

This is not just a matter of historical interest. It will be central to the debate throughout the 2012 election cycle. For if the liberal/left propagandists are right, and private sector greed and malfeasance caused the crisis, then President Obama's regulatory government takeover of the financial industry is the answer. But if the government caused the crisis, then the further extension of Reagan's free market policies are the answer.

Clinton's Overregulation

The fallacies of the last three Presidents, Clinton, Bush, and Obama, came together to cause the devastating financial crisis, costing the American people trillions in lost value of their basic financial assets, from their homes to their retirement accounts. Though these policies had earlier roots, they really sprouted under Clinton, who announced his new National Home Ownership Strategy to great fanfare in a splashy White House ceremony in June 1995. As Stanley Kurtz reported the event for National Review Online:

In his remarks, Clinton emphasized that: "Our homeownership strategy will not cost the taxpayers one extra cent. It will not require legislation." Clinton meant that informal partnerships between [federally established and backed mortgage backers] Fannie [Mae] and Freddie [Mac] and groups like ACORN would make mortgages available to customers "who have historically been excluded from homeownership." In the end, of course, Clinton's plan cost taxpayers an almost unbelievable amount of money.

This is where the subprime mortgage market was born.

Under this new Clinton vision, it became federal regulatory policy to force the nation's financial institutions to abandon traditional lending standards for home mortgages, on the grounds that those standards were racially discriminatory, as African Americans and other minorities could not qualify for mortgages to nearly the same degree as whites and Asians. This overregulation reached the point of forcing lenders to discount bad credit history, no credit history, no savings, lack of steady employment, a high ratio of mortgage obligations to income, undocumented income, and inability to finance down payment and closing costs, while counting unemployment benefits and even welfare as income in qualifying for a mortgage. As Sperry documents so thoroughly, this turned into government-sanctioned looting of the banks.

The Community Reinvestment Act of 1977 (CRA) was only one part of that federal regulatory policy. The CRA required banks to lend throughout the entire geographic area in which they operate, including the poorest neighborhoods, where qualification for credit under traditional standards was quite limited. Based on intense lobbying by the far left activist group ACORN, Clinton expanded this originally toothless regulatory ornament into a great lever to break open bank vaults.

The freedom of banks to operate their businesses in opening new branches, mergers, and lending was held hostage to each bank's CRA rating, which had to reach mandated goals to earn necessary government regulatory approvals. Clinton issued new CRA regulations requiring banks and savings and loan associations to meet quotas for mortgages to borrowers at or below 80 percent of median income in their service areas. He also doubled CRA examinations of banks by adding several hundred bank examiners to enforce tougher CRA rules.

Clinton's HUD contributed with new regulations greatly strengthening CRA requirements, as Wallison explained in The American Spectator in February, 2009:

In 1995, the regulators created new rules that sought to establish objective criteria for determining whether a bank was meeting CRA standards. Examiners no longer had the discretion they once had. For banks, simply proving that they were looking for qualified buyers wasn't enough. Banks now had to show that they had actually made a requisite number of loans to low and moderate income (LMI) borrowers.

But this was just the beginning. Even more powerful were so-called "anti-redlining" regulations, based on liberal mythology that financial institutions just arbitrarily redlined low income and minority neighborhoods for denial of home mortgages, which was considered racial discrimination in violation of the law. Under Clinton's innovations, pursued by his Attorney General zombie Janet Reno, any difference in lending to minorities or low income Americans was racially discriminatory "disparate impact," even if it resulted from mere adherence to traditional lending standards.

Any troglodyte financial institutions failing to get hip with the New Age lending "standards" soon found themselves subject to discrimination suits brought by Justice or HUD, and pilloried as racist in the media. Kurtz quoted a colorful Chicago newspaper report explaining the effect of these new standards, "You've only got a couple of thousand bucks in the bank. Your job pays you dog food wages. Your credit history has been bent, stapled, and mutilated. You declared bankruptcy in 1989. Don't despair. You can still buy a house."

The big problem wasn't caused just by loans to low income borrowers. Once lending standards were trashed for these borrowers, they couldn't be maintained for more creditworthy borrowers. This let more well-heeled speculators in on the scam, now able to qualify for highly speculative mortgages they could not have qualified for previously. That vastly expanded the resulting credit risk vulnerabilities for the financial system.

HUD then broadened the developing disaster to the entire financial community, across the nation and even around the world, through mandatory regulatory quotas on Fannie Mae and Freddie Mac forcing them to drop their traditional lending standards as well for eligibility for securitization. That securitization pooled these vulnerable mortgages and sold shares in them, known as "mortgage backed securities" (MBSs), to other financial institutions. By the time the housing market collapsed, Fannie and Freddie faced three regulatory quota mandates. The first was to devote 56 percent of their mortgage funding to individuals with below-average income. The second required 27 percent of their mortgage funding to be granted to families with incomes at or below 60 percent of area median income. The third required 35 percent of their mortgage funding go to geographic areas deemed to be underserved.

The debasement of mortgage lending standards and massively increased mortgage funding through securitization of the new subprime and other non-prime loans greatly increased demand for housing, which spawned the rise of the housing bubble. Because the capital markets believed, rightly as it turned out, that the bonds issued by Fannie and Freddie to raise money for their mortgage financing were effectively government guaranteed, the two organizations were able to raise huge sums at low interest rates to pump into these mortgages and their securitization. That pumped housing prices beyond sustainability, and exploded the pollution of U.S. and world financial markets to toxic levels.

Going back to his ACORN days, and through his many years as an ultraleft politician, Obama was a supporter and cheerleader for these very Clinton housing policies. As President, he has been busily reinvigorating them, setting the stage for another housing crisis.

Bush's Cheap Dollar

The Bush Treasury supported a cheap dollar policy, falling for the Keynesian fallacy that a low dollar helps the economy by promoting exports. The central role of the resulting Fed policies in causing the financial crisis was most authoritatively explained by Stanford Economics Professor and monetary policy guru John Taylor in his timely book, Getting Off Track. Taylor begins:

The classic explanation of financial crises, going back hundreds of years, is that they are caused by excesses -- frequently monetary excesses -- that lead to a boom and an inevitable bust. In the recent crisis we had a housing boom and bust, which in turn led to financial turmoil in the United States and other countries. I begin by showing that monetary excesses were the main cause of the boom and the resulting bust.

Economics Professor Lawrence H. White, now of George Mason University, elaborates:

In the recession of 2001, the Federal Reserve System... began aggressively expanding the U.S. money supply.... The expansion was accompanied by the Fed repeatedly lowering its target for the federal funds (interbank short term) interest rate.... The real Fed funds rate was negative... for two and a half years. In purchasing power terms, during that period a borrower was not paying but rather gaining in proportion to what he borrowed. Economist Steve Hanke has summarized the result: "This set off the mother of all liquidity cycles and yet another massive demand bubble."

From early 2001 until late 2006, as White further explains, "the Fed pushed the actual federal funds rate below the estimated rate that would have been consistent with targeting 2 percent inflation," which had been the enormously successful, long term, Reagan Fed policy. Steve Forbes adds, "In 2004, the Federal Reserve made a fateful miscalculation. It thought the U.S. economy was much weaker than it was and therefore pumped out excess liquidity and kept interest rates artificially low."

But low interest rates by themselves do not mean monetary policy is excessively loose. That depends on what market prices are saying, as reflected by the dollar, gold and inflation. The Fed's loose monetary policies during the Bush Administration generated sharp declines in the dollar. The dollar was worth 1.15 Euros near the start of 2002, but declined by close to 50 percent near to 0.6 Euros by the start of 2008. The price of gold soared from $350 near the end of 2002 to almost $1,000 by the start of 2008. Even inflation, defeated 25 years previously, started to come back, increasing from 1.55 percent at the end of 2001, to as high as 5.6 percent in July 2008.

That cheap dollar monetary policy further inflated the housing bubble because it generated flight into real assets to escape the depreciating greenback. Because real estate is an especially long-lived asset, its market value is especially boosted by low interest rates.

When the Fed finally realized it had to rein in its loose monetary policy, or risk soaring inflation, skyrocketing housing prices slowed, flattened out, and then tipped into decline. The steep decline in housing prices produced chaos throughout the financial industry in the U.S., and ultimately the world, as widespread financial assets based on housing collapsed in value. As Taylor concluded, "[The] extra-easy [Fed monetary] policy accelerated the housing boom and thereby ultimately led to the housing bust."

The Crisis in American Media

Lynch argues in his Bloomberg article, "The Community Reinvestment Act can't explain why house prices in the U.K., Ireland, Spain and France doubled earlier this decade and almost doubled in Australia. All have suffered steep losses since then, with Ireland's home prices dropping 38 percent by December 2010 from the 2006 peak."

But this fails to recognize that the Fed managing the world's reserve currency effectively exported its weak currency policy globally. Other countries loosen their monetary policies to avoid the negative short term trade implications of appreciating currencies relative to the dollar. Moreover, the dollar's weakness masks the looseness of their monetary policies, misleading them into even looser policies. Their loose policies pumped up their own real estate bubbles.

Lynch argues further that federal housing policies can't explain the bubble in commercial real estate, which also contributed to the housing crisis. But the Fed's low interest rate, loose monetary policies would have the same effect in creating a bubble in commercial real estate that it had in housing.

Lynch adds that, "Losses on subprime mortgage-backed securities didn't start shaking financial institutions until 2007, three decades after the CRA was introduced and 15 years after affordable housing goals were established for Fannie Mae and Freddie Mac." But this fails to recognize that the CRA was not expanded into a real problem until the Clinton years, and even then it was only one factor in creating the crisis. The regulation carrying out Clinton's undeniable federal policy of trashing traditional mortgage standards was much broader, greatly exacerbated by the Fed's cheap dollar policies as well. This is why the problem extended well beyond CRA regulated institutions, which Lynch also fails to understand.

The crisis in American media now goes well beyond media bias. The real problem is now outright ideological partisanship and activism. Far too much of America's self-professed media are not journalistic enterprises at all. They are political activist organizations posing as journalistic enterprises. In this crisis, Bloomberg News is just another part of the problem.

TOPICS: Business/Economy; Editorial; Government; Politics/Elections
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1 posted on 01/08/2012 9:30:43 AM PST by Kaslin
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To: Kaslin

Did I miss the role Obama took even though he was listed in the headline??? Trillion upons trillions spent, frittered away.

2 posted on 01/08/2012 9:50:46 AM PST by Freddd (NoPA ngineers.)
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To: Freddd

The fallacies of the last three Presidents, Clinton, Bush, and Obama, came together to cause the devastating financial crisis-——————

What role did Obama play? Nothing mentioned...

3 posted on 01/08/2012 9:52:09 AM PST by Freddd (NoPA ngineers.)
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To: Kaslin

Ann Barnhardt...without teleprompter. Best 40 minutes (and scariest) you’ll spend:

Then, watch “Why No Brokerage Account Is Safe”:

THEN, get your money OUT and take some TUMS.

4 posted on 01/08/2012 9:56:05 AM PST by Mortrey (Impeach President Soros)
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To: Mortrey

Ann Barnard isn’t she the one to whom Corzine is linked?

5 posted on 01/08/2012 10:01:14 AM PST by Kaslin (Acronym for OBAMA: One Big Ass Mistake America)
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To: Kaslin

She closed her brokerage firm BECAUSE of what Corzine did with MF Global.

She did it for the good of her clients because she believes there is 100% fraud in the market, and she’s telling everyone to get out.
Listen to the video...she admonishes everyone to buy guns, too.

To those who say “I can’t afford to lose the penalty for taking my money out”, she says they won’t have ANY money to take out if they don’t move quickly.

6 posted on 01/08/2012 11:06:05 AM PST by Mortrey (Impeach President Soros)
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To: Freddd
>>What role did Obama play? Nothing mentioned...
Uhuh.   Observe what we DIDN'T hear in September/October 2008...
"Well, I'm glad my opponent brought up the economy.  Mr. Obama, isn't your campaign's National Finance Chairwoman Penny Pritzker -- and didn't her Chicago Family-owned Superior Bank fail in 2001 from doing subprime loans for ACORN?"

Follow the....


Billionaire business mogul Penny Pritzker is a member of one of America’s richest families and was the Finance Chair for the presidential campaign of Barack Obama.  It was Pritzker that led the prolific, and illegal, fundraising that helped power Barack Obama’s presidential campaign.  She was the chair of Chicago-based Superior Bank’s board for five years. 

Pritzker was into subprime lending before it became all the rage starting in around 2000.  Prtizker's chairmanship was to concentrate on sub prime lending, principally on home mortgages, but for a while in subprime auto lending, too, after the Pritzkers' bank acquired its wholesale mortgage organization division, Alliance Funding, in December 1992.

Back then they called it "predatory lending."

Superior Bank went belly up in 2001 with over $1 billion in insured and uninsured deposits; 1,406 depositors lost much of their life savings.  This collapse came amid harsh criticism of how Superior’s owners promoted sub-prime home mortgages.

On Nov. 1 [2002] the Federal Deposit Insurance Corp. pointed the finger at Ernst & Young, Superior’s auditor, in a fraud suit filed in federal court here.  But that action came two months after a group of Superior depositors accused the bank’s owners and directors, including two members of the Pritzker family, of racketeering....


...Pritzker is chairman of Classic Residence by Hyatt, luxury senior living communities in 11 states; chairman of The Parking Spot, which owns and operates off-airport parking facilities in nine cities; chairman of the credit data company TransUnion and chairman of Pritzker Realty.  She also sits on the board of Global Hyatt and plays a role in numerous non-profit groups, including serving as chairman of the Olympic village portion of Chicago’s bid to win the 2016 Summer Games.
Nudge nudge nudge...

7 posted on 01/08/2012 8:23:08 PM PST by LomanBill (Animals! The DemocRats blew up the windmill with an Acorn!)
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To: Kaslin

Losses on subprime mortgage-backed securities didn't start shaking financial institutions until 2007,


Arnall,  paging the Godfather of Subpri... err, Ambassador Roland Arnall, please come to the White Hut courtesy phone....

Where's RICO, LEOs?

8 posted on 01/08/2012 8:28:57 PM PST by LomanBill (Animals! The DemocRats blew up the windmill with an Acorn!)
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To: aflaak


9 posted on 01/08/2012 8:40:27 PM PST by r-q-tek86 ("It doesn't matter how smart you are if you don't stop and think" - Dr. Sowell)
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To: Kaslin

The CRA and other government mandates didn’t cover Wall Street investment banks like Goldman Sachs, pure mortgage lenders like Ameriquest, nor hedge funds like John Paulson.

The IBs, pure mortgage lenders, and hedge funds cranked out trillions of dollars worth of subprime paper and derivatives, all in the private sector and all in competition with Fannie Mae and Freddie Mac. They did it without any government pressure. They did it because they were making a ton of money in the subprime market.

Peter Ferrara is perpetuating a politically convenient myth, that “the government caused it all”, which gets treated like Gospel around here because a lot of conservatives start with the belief that only government could do something so stupid and damaging, and the facts be damned if they indicate otherwise.

Well Wall Street spent a whole lot of money paying politicians of both stripes to dismantle the Glass Steagall act and to pass laws to prevent regulation of the derivatives industry. Google “Gramm–Leach–Bliley” and the “Commodities Futures Modernization Act of 2000”. The private shadow banking sector was in the subprime market up to their eyeballs, without government pressure, and they did a whole lot of stupid and destructive things, courtesy of their refusal to price risk correctly due to their idiotic belief in David X Li’s Gaussian Copula Function.

HUD and the CRA ought to be scrapped. But so should the claim that the government caused the crisis and that the lending business was simply an innocent victim of government regulation.

10 posted on 01/08/2012 9:12:43 PM PST by Pelham (Islam. The original Evil Empire)
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To: LomanBill

“Where’s RICO, LEOs?”

There may not be a way to prosecute the likes of Arnall. The shadow banking firms lobbied to keep themselves exempt from laws that cover banks.

11 posted on 01/08/2012 9:17:42 PM PST by Pelham (Islam. The original Evil Empire)
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To: Pelham

There may not be a way to prosecute the likes of Arnall. The shadow banking firms lobbied to keep themselves exempt from laws that cover banks.

"Argent is safe from investigation because the government got their $325 million settlement from Ameriquest and won't be looking into Argent, per the settlement agreement. "
Dear Mr. Lee:   I was previously employed by Argent Mortgage for two and a half years and managed, among other areas, the corporation's fraud investigation, borrower complaints and repurchase departments. There are currently over 568 open fraud investigations involving hundreds of brokers and hundreds of millions of dollars in fraudulent loans that are being covered up by top executives in the company. If a broker sustains a certain monthly volume, Argent management looks the other way and, not only does not suspend the bad brokers, but knowingly sells these fraudulent loans on the secondary market to unwitting investors.
  I was terminated today and left with just my purse in tow, but I have names of individuals in the company who need to be served with subpoenas to enable them to turn over their spreadsheets and boxes full of documentation and evidence of all the fraud they have found that is being covered up by Argent Mortgage's executive management. The state regulators need to know the truth about the blind eye Argent turns to the fraud perpetrated on innocent consumers by high volume brokers. They also need to be aware that Argent knowingly bundles these fraudulent loans and sells them as mortgage-backed securities on Wall Street, thereby compromising the SEC, as well as our country's economic stability.
  At a recent fraud seminar attended by hundreds of mortgage lenders in Washington D.C. a week ago, an attorney who works for Argent's retained law firm, Buchalter Nemer, stood up and told the seminar attendees that the wholesale lenders in the audience had better beware, unless their name is Argent. Argent is safe from investigation because the government got their $325 million settlement from Ameriquest and won't be looking into Argent, per the settlement agreement. I hope this isn't true because Argent Mortgage funded over $50 billion in 2005 and is gearing up to fund well over $80 billion dollars of fraudulent loans in 2007.
Nifty ehh?

12 posted on 01/08/2012 9:23:16 PM PST by LomanBill (Animals! The DemocRats blew up the windmill with an Acorn!)
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To: Pelham
 their refusal to price risk correctly due to their idiotic belief in...
"We didn't truly know the dangers of the market, because it was a dark market," says Brooksley Born, the head of an obscure federal regulatory agency -- the Commodity Futures Trading Commission [CFTC] -- who not only warned of the potential for economic meltdown in the late 1990s, but also tried to convince the country's key economic powerbrokers to take actions that could have helped avert the crisis. "They were totally opposed to it," Born says. "That puzzled me. What was it that was in this market that had to be hidden?"

13 posted on 01/08/2012 9:26:27 PM PST by LomanBill (Animals! The DemocRats blew up the windmill with an Acorn!)
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To: LomanBill

Yes, infuriating and not a surprise.

Argent and Ameriquest were two of the largest subprime houses. They are largely forgotten because Argent was a division of Ameriquest and was later gobbled up by Citigroup.

And Ameriquest is one of the All Stars over at the Mortgage Lender Implode O Meter, and therefore no longer exists.

14 posted on 01/08/2012 9:38:33 PM PST by Pelham (Islam. The original Evil Empire)
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To: LomanBill

Brooksley Born was one of the few heroic figures who tried to prevent the subprime mess, although her attempt to regulate the OTC derivatives market was defeated.

It wasn’t like every regulator refused to do their job, although I think that was certainly the case with Greenspan and Cox over at the SEC. There were state attorneys general who investigated subprime lending abuses but were prevented from doing anything about it.

15 posted on 01/08/2012 9:49:34 PM PST by Pelham (Islam. The original Evil Empire)
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To: Pelham

[They are largely forgotten because Argent was a division of Ameriquest]


And my observation was that the SEC couldn't find its own arse with both hands and a SQL statement telling them exactly where to find it... and a few thousand Liar Loan applications for which the AAA FICO score had been fabricated.
Largely forgotten? Yeah,  fahgedaboudat.

16 posted on 01/08/2012 10:01:21 PM PST by LomanBill (Animals! The DemocRats blew up the windmill with an Acorn!)
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To: LomanBill

Cox’s tenure at the SEC bought into the same idea that you posted about Greenspan, the belief that the financial markets would self-regulate.

That experiment sure worked out great. It took 60 some years to forget the lessons of the 1930s and to dismantle the separation of commercial and investment banking. Ten years for investment bankers to blunder into another major financial crisis.

17 posted on 01/08/2012 10:08:43 PM PST by Pelham (Islam. The original Evil Empire)
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To: Pelham; Liz

[Ten years for investment bankers to blunder into another major financial crisis.]

And all of the above took place in the context of a culture that was being deliberately and systemically corrupted from within; culminating in the demoralized / amoral state of affairs where this...

"As a 19 then 20 year old boy, my managers and handlers taught me the ins and outs of mortgage fraud, drugs, sex, and money, money, and more money. My friend and manager handed out crystal methamphetamine to loan officers in a bid to keep them up and at work longer hours. At any given moment inside the restrooms - cocaine and meth was being snorted by my estimates more than a third of the staff, and more than half the staff manipulating documents to get loans to fund and more then 75% just completely made falses tatements on 1003s regarding stated income etc to get loans funded. "

...was considered to be bidness as usual -- from the liars who falsified their incomes on the mortgage application, the originators who helped them fill out the paperwork, the folks who securitized the resulting mortages, those who failed their fiduciary responsibility to rate the a$$paper accordingly... etc etc etc.
Evidently progressive "fiscal" conservatism... isn't.
As Liz succinctly put it:

"We are witnessing the consequences of a generation inculcated with moral relativity and situation ethics."


18 posted on 01/08/2012 10:30:02 PM PST by LomanBill (Animals! The DemocRats blew up the windmill with an Acorn!)
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To: LomanBill

That same generation inculcated with moral relativity and situation ethics has segued into The Entitlement Generation.

The new motto is “Pay Me—I’m a Victim.”

19 posted on 01/09/2012 4:52:22 AM PST by Liz
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To: All
Obama presided over the biggest political heist in US history. What the so-called "collapse" of the banking system wrought:

FOURTEEN TRILLION DOLLARS: Behind The Real Size of the Bailout; A guide to the abbreviations, acronyms, and obscure programs that make up the $14 trillion federal bailout of Wall Street
Mon Dec. 21, 2009 12:23 PM PST

The price tag for the Wall Street bailout is often put at $700 billion—the size of the Troubled Assets Relief Program. But TARP is just the best known program in an array of more than 30 overseen by Treasury Department and Federal Reserve that have paid out or put aside money to bail out financial firms and inject money into the markets.

To get a sense of the size of the real $14 trillion bailout, see our chart at web site. Below, a guide to the pieces of the puzzle:

Treasury Department bailout programs
(Remember that Obama's Treasury Dept was controlled by his then-COS Rahm Emanuel---a G/S lobbyist in the WH)

Money Market Mutual Fund: In September 2008, the Treasury announced that it would insure the holdings of publicly offered money market mutual funds. According to the Special Inspector General for the Troubled Asset Relief Program (SIGTARP), these guarantees could have potentially cost the federal government more than $3 trillion [PDF].

Public-Private Investment Fund: This joint Treasury-Federal Reserve program bought toxic assets from banks and brokerages—as much as $5 billion of assets per firm. According to SIGTARP, the government's potential exposure from the PPIF is between $500 million and $1 trillion [PDF].

TARP: As part of the Troubled Asset Relief Program, the Treasury has made loans to or investments more than 750 banks and financial institutions. $650 billion has been paid out (not including HAMP; see below). As of December 21, 2009, $117.5 billion of that has been repaid.

Government-sponsored enterprise (GSE) stock purchase: The Treasury has bought $200 million in preferred stock from Fannie Mae and another $200 million from Freddie Mac [PDF] to show that they "will remain viable entities critical to the functioning of the housing and mortgage markets."

GSE mortgage-backed securities purchase: Under the Housing and Economic Recovery Act of 2008, the Treasury may buy mortgage-backed securities from Fannie Mae and Freddie Mac. According to SIGTARP, these purchases could cost as much as $314 billion --- SNIP---.

LONG READ---go to web site to read more and checkout the shocking charts.


20 posted on 01/09/2012 4:56:17 AM PST by Liz
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