"Fannie Mae" Comment Dump.
This is the Fannie Mae dump for those who want to discuss the issue. While I have ABSOLUTELY no interest in discussing the foibles of this private corporation, I also don't want to engage in censorship. I've created this page to collect all of the extraneous comments that are posted elsewhere, but really belong here. Feel free to post a comment.
posted by Merge Divide at 5:27 PM
6 Comments:
News Flash-- The Bailout Of Fannie Mae is almost official.Read the article on Fannie.
http://www.politico.com/news/stories/0708/11781.html
"If you want to know how Fannie Mae and Freddie Mac have survived scandal and crisis, consider this: Over the past decade, they have spent nearly $200 million on lobbying and campaign contributions.
But the political tentacles of the mortgage giants extend far beyond their checkbooks.
The two government-chartered companies run a highly sophisticated lobbying operation, with deep-pocketed lobbyists in Washington and scores of local Fannie- and Freddie-sponsored homeowner groups ready to pressure lawmakers back home.
They’ve stacked their payrolls with top Washington power brokers of all political stripes, including Republican John McCain’s presidential campaign manager, Rick Davis; Democrat Barack Obama’s original vice presidential vetter, Jim Johnson; and scores of others now working for the two rivals for the White House.”
“Fannie and Freddie own or guarantee almost half of the country’s $12 trillion in mortgage debt. Over the past few months, their shares of the housing market have grown as private companies curtailed their mortgage lending in the wake of massive subprime-related losses.
Critics have long argued that both Fannie and Freddie operated with too small a capital cushion to adequately offset financial risk. But the mortgage giants have consistently beaten back congressional efforts to increase oversight, even After a Major Accounting Scandal in 2003 resulted in a $400 million fine for Fannie.
Fannie’s government relations operations dramatically expanded in the mid-1990s, when then-CEO Johnson recruited Washington A-listers Robert Zoellick, who served in the Reagan and Bush administrations; Lawrence M. Small, former secretary of the Smithsonian Institution; and William M. Daley, commerce secretary in the CLINTON ADMINISTRATION.
Johnson spearheaded an aggressive campaign to create a local grass-roots network of company advocates. Under his leadership, Fannie opened more than 50 partnership offices in cities and rural communities. At the same time, the Fannie Mae Foundation, a private nonprofit financed by the mortgage giant, contributed generously to local charities, arts institutions and housing organizations, giving Fannie influence in lawmakers’ home districts.”
Jamie S. Gorelick, deputy attorney general in the Clinton administration and a chief policy adviser to Hillary Rodham Clinton, is rumored to be a possible attorney general in an Obama administration. She was vice chairman of Fannie Mae and sat on its board of directors."
The article goes on to describe Fannie’s close ties to a number of McCain advisors and funraisers also. But—as far as I know, absolutely no Democrat ever criticized either Fannie or Freddie for the way they did business or tried to limit them in any way.
Some estimates put the potential cost to taxpayers at over 2 TRILLION DOLLARS. The GSE’s were always really government agencies and would never have been able to do what they did without the implicit guarantee of the federal government but the government never really told taxpayers this. In fact government accounting is based on B.S. like this, because if the true costs of it’s programs and extent of it’s debt were known, taxpayers and investors would faint.
As far as I know, there are no calls for congressional investigations.
PERHAPS, THIS IS WHY?
http://www.opensecrets.org/news/2008/07/top-senate-recipients-of-fanni.html
1. Dodd, Christopher J S D-CT $133,900
2. Kerry, John S D-MA $111,000
3. Obama, Barack S D-IL $105,849
4. Clinton, Hillary S D-NY $75,550
5. Kanjorski, Paul E H D-PA $65,500
6. Bennett, Robert F S R-UT $61,499
7. Johnson, Tim S D-SD $61,000
8. Conrad, Kent S D-ND $58,991
9. Davis, Tom H R-VA $55,499
10. Bond, Christopher S 'Kit' S R-MO $55,400
11. Bachus, Spencer H R-AL $55,300
12. Shelby, Richard C S R-AL $55,000
13. Emanuel, Rahm H D-IL $51,750
14. Reed, Jack S D-RI $50,750
15. Carper, Tom S D-DE $44,389
16. Frank, Barney H D-MA $40,100
17. Maloney, Carolyn B H D-NY $38,750
18. Bean, Melissa H D-IL $37,249
19. Blunt, Roy H R-MO $36,500
20. Pryce, Deborah H R-OH $34,750
21. Miller, Gary H R-CA $33,000
22. Pelosi, Nancy H D-CA $32,750
23. Reynolds, Tom H R-NY $32,700
24. Hoyer, Steny H H D-MD $30,500
25. Hooley, Darlene H D-OR $28,750
Includes contributions from PACs and individuals.
2008 cycle totals based on data downloaded from the
Federal Election Commission on June 30, 2008.
So what's my point? Well, a massive government program has just imploded(well actually still in the process)in a vast scandal but we are not supposed to notice this as we move on to the next pet collectivist project.
To my knowledge, McCain never complained about Fannie Mae or Freddie Mac either which is one reason I am a fairly lukewarm supporter of his. Both of these programs were "third rail" and only brought up by "far right fanatics" who wanted to take away people's right to the "American Dream".
However,this campaign is between him and an extreme member of the Democratic party. A small number of Republicans have warned for years that the GSE's were being run in a shaky manner and posed a huge threat to taxpayers and the housing market.
I will get back to this subject, but the record also shows that Fannie and Freddie's shaky behavior and expansion radically increased during the Clinton Administration.
Fannie Mae and Freddie Mac were started as part of the Roosevelt Administration's New Deal. To suggest that modern day Democrats are responsible for it simply demonstrates your outmoded beliefs. The Republicans have had numerous shots at addressing the growing debacle, and never considered it a priority.
Fannie Mae's been a private corporation since 1968- proof that your claims that the private sector does everything better than the government is simply wrong. Public accountability would have shed light on its poor fiscal management. The government shouldn't have to pay for the mistakes of private managers. Now they need a bailout, and where do they turn? You guessed it.
It's just like the Savings and Loans Scandal, which the Republicans were knee-deep in. We're still paying for that private industry debacle as well. So I don't want to hear your sanctimony.
You reap what you sow with your constant calls for privatization. What kind of libertarian are you anyway? You should be happy that the government wasn't in charge... according to you public accountability is to be avoided at all costs.
Give me a break, all the current candidates with the likely exception of Palin likely have their hands in this mess, remember that in 2005, a major problem with Fannie’s books was uncovered—but in the time since- nothing was done and they continued on their merry way in spite of continued warnings from lots of financial experts.
Did you notice that Obama also ends up as the number 3 recipient of campaign contributions from Fannie Mae and Hillary Clinton is number 4? Actually the number looks worse than that since it’s a list of total contributions since 1989 and Obama has only been in office since 2005.
“Fannie Mae and Freddie Mac have also strategically given more contributions to lawmakers currently sitting on committees that primarily regulate their industry. Fifteen of the 25 lawmakers who have received the most from the two companies combined since the 1990 election sit on either the House Financial Services Committee; the Senate Banking, Housing & Urban Affairs Committee; or the Senate Finance Committee. The others have seats on the powerful Appropriations or Ways & Means committees, are members of the congressional leadership or have run for president. Sen. Chris Dodd (D-Conn.), chairman of the Senate banking committee, has received the most from Fannie and Freddie's PACs and employees ($133,900 since 1989). Rep. Paul Kanjorski (D-Pa.) has received $65,500. Kanjorski chairs the House Financial Services Subcommittee on Capital Markets, Insurance and Government-Sponsored Enterprises, and Freddie Mac and Fannie Mae are government-sponsored enterprises, or GSEs.”
http://www.opensecrets.org/news/2008/07/top-senate-recipients-of-fanni.html
1. Dodd, Christopher J S D-CT $133,900
2. Kerry, John S D-MA $111,000
3. Obama, Barack S D-IL $105,849
4. Clinton, Hillary S D-NY $75,550
http://www.swamppolitics.com/news/politics/blog/2008/06/andrew_zajac_barack_obamas_tak.html
“Barack Obama's taking serious heat for his reliance on former Fannie Mae CEO James Johnson to vet potential vice presidential prospects.
Obama has presented himself as an outsider and a Washington change agent and Johnson, whose favorable loan deals with Countrywide Financial Corp. made him a lightning rod, is as inside as they come in the capital.
How much of an outsider can Obama be, really, GOP skeptics ask, if he's turned to somebody like Johnson for important spadework in finding a running mate?
Johnson announced he quit the Obama campaign earlier today, but the question likely will linger.
John McCain's campaign manager, Rick Davis, also has ties to Fannie Mae, though less directly.”
The weird but not entirely unexpected thing is that I really haven’t heard a lot of calls for “congressional investigations” even though this debacle is far larger than Enron, the accounting overstatements are much, much bigger and taxpayers are on the hook.
I'll leave the S&L scandal for a moment. You have said a number of times on this blog that economics is not a big area of interest to you. Believe me, your lack of knowledge shows.
They are called GOVERNMENT SPONSORED ENTERPRISES.
"GSEs carry the IMPLICIT BACKING OF THE U.S. GOVERNMENT, but they are not direct obligations of the U.S. Government. For this reason, these securities will offer a yield premium over Treasuries. Some consider GSEs to be stealth recipients of corporate welfare.
Examples of GSEs include: Federal Home Loan Bank, Federal Home Loan Mortgage Corporation (Freddie Mac), Federal Farm Credit Bank and the Resolution Funding Corporation”
A normal business is one in which the owners, investors and lenders to it take responsibility for both the potential profits but also the possible losses. GSE's play a game of heads I win and take home the profits and tails the taxpayer looses and I chuckle as I walk away.
Nobody would have loaned the vast, vast amounts of credit that the GSE's got without the knowledge that if something went wrong, the government would bail them out. What this meant in practice was that Fannie and Freddie were never looked that closely by investors. It was the government’s job to watch their babies. A long list of people from Alan Greenspan to Warren Buffett have warned that what was going on looked shaky. Remember that there had already been a big accounting scandal a few years ago.
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