Truth? You Can’t Handle the Fannie/Freddie Truth

Wall Street Journal ^ | September 9, 2008 | Deal Journal

[Lorianne]

As predicted, my Sunday column that praised the Treasury’s takeover of Fannie Mae and Freddie Mac incited outrage from many readers.

Typical comments? “A horrible deal for Americans.” “A sad day for America.” “Pity the taxpayer.” “Appeasement for China.” “It’s time for a taxpayer revolt.”

As for who’s to blame? Anybody and everybody. Congress, Wall Street, Greenspan, Bush, Clinton, Hank Paulson, Freddie’s and Fannie’s CEOs and the Chinese.

Of course, there is plenty of blame to go around. But let’s not just point fingers. It is time to take a hard look in the mirror and see where the blame really lies.

[oblomov]

Don’t blame me. I considered my house a big-ticket consumption item when I bought it. I never expected to make a net profit, living as I do in a rust-belt city.

[Parley Baer]

“Congress gives the people what they want.”

Actually I don’t totally agree with this statement. I think most people wanted the Macs to make reasonable loans. IMHO it was some people in Washington who wanted to included low income people to be able to share in the American dream. We can see the results of that. There were way to many people getting loans that had no business getting one.

[nmh]

WSJ speaks the truth on this:

Truth No. 1: Congress gives the people what they want.

Truth No. 2: Wall Street helps people get what they want.

Truth No. 3: Hank Paulson did the only thing he could.

Truth No. 4: We are all to blame.

[VOA]

But let’s not just point fingers.

Spoken like an investor with INSIDE INFORMATION.

That knew when to sell their shares for profit.

And leave the other shareholders with little or NOTHING.

Palin should publically state that she'll HOUND the "operators"
at Fannie Mae and Freddie Mac TEN TIMES HARDER than the legal authorities
that managed to convict Ken Lay but were too F---ing slow to
sentence him before he died.
(That is...if Ken Lay is dead! The first question of the sheriff
in the Colorado town that Ken Lay vacationed and supposedly died in...
"Are you SURE it's Ken Lay?" In other words...even the local
sheriff wondered if Ken Lay's corpse was actually the remains of
one Ken Lay, the head honcho of the greatly diminshed Enron).

[khnyny]

It boils down to greed - on many levels of society. Everyone tried to get a piece of the pie. The American Taxpayer is left holding the bag.

The criminality involved in the whole housing meltdown is mind boggling.

[RobinOfKingston]

There were way to many people getting loans that had no business getting one.

What I see locally is that young people don't want to start out in a "starter" house and work their way up. They also tend to fill the driveway of the house they can't afford with motorized toys they can't afford.

In nearly four decades of dealing with JQ Public it has been my finding that all to many people spend just beyond their means.

[AndyJackson]

I called BS in 1979 when my friends' wives all started working as real estate agents telling me how rich I could become investing in real estate. That Burns and Greenspan financed the debacle doesn't mean it wasn't all BS.

Me, I tried to scrimp and save money to buy my first house at a time when Carter (with the help of Burns) made the notion of saving money a great big joke. Greenspan just continued the borrowing spree.

[umgud]

Something I don’t hear in all these stories, is what to do with this massive dearth of homes. In almost every area, there were stories of frenzied homebuilding during the boom. My take is that we have too many homes for anything to recover.

[AndyJackson]

We are all to blame

No we are not all to blame. Some us had studied economics and history and had enough science / engineering training to understand the no free lunch principle. Even Whimpy had to pay on Tuesday for today's gluttony.

[Blue Highway]

I bought in at 10.93 and should have sold off at 11.60. Now it is worthless.

[wendy1946]

Mark Levin was talking about this tonight. It’s basically a scandal which dwarfs any and all other scandals of our times, it’s entirely the work of democrats including many friends of Oinkbama, and the media refuses to touch it while they scour Alaska for stories about Sarah Palin getting parking tickets. This is a GIGANTIC issue for republicans.

[Milly]

I could not agree with you more, We built a new home
downsized in 2002.The estate has both young and old ,I could not believe the amount of homes that went up for sale in the past 18 months. They are being Bought up By people like my Husband and I Downsizer’s, But we will miss the kids Playing around the Neighbor Hood. I did not want a gated community, now I wonder did we make the Correct decision.?

[sarasmom]

Bravo!
And some of us are renters who for various reasons, primarily financial, did not drink the “purple Koolaid” of the concept of buying a home,no money down, without the resources to pay for the maintenance, taxes and insurance.

So “we” are being punished again for our personal fiscal responsibility, and predatory investors/landlords are being rewarded for bad investments!

[gracesdad]

“Palin should publically state that she’ll HOUND the “operators” at Fannie Mae and Freddie Mac TEN TIMES HARDER than the legal authorities that managed to convict Ken Lay but were too F-—ing slow to sentence him before he died.
(That is...if Ken Lay is dead! The first question of the sheriff in the Colorado town that Ken Lay vacationed and supposedly died in... “Are you SURE it’s Ken Lay?” In other words...even the local sheriff wondered if Ken Lay’s corpse was actually the remains of one Ken Lay, the head honcho of the greatly diminshed Enron). “

Oh, is it tinfoil time?

Palin has nothing to do with any of this.

[gracesdad]

“...it’s entirely the work of democrats ...”

Wishful thinking.

Are you saying that the Republican Congress from 1995 to 2006 and Bush in the White House from 2001 until now had nothing to do with it? If you are, you’re completely delusional.

[fours]

“IMHO it was some people in Washington who wanted to included low income people to be able to share in the American dream. We can see the results of that. There were way to many people getting loans that had no business getting one.”

Wrong W — Wall Street, not Washington. The investment bankers wanted to make money selling loans to poor people (”subprime lending”) and then turned the loans into risky financial instruments. Then everyone else (your mutual fund, probably) bought them and it all looked good until the housing price bubble burst and they couldn’t collect on the loans.

Nobody in Washington had anything to do with it — it was the free market, plain and simple, and a lot of dumb smart bankers in New York City who still got to keep their million-dollar Christmas bonus anyway. Glad I invested in gold and oil instead!

[right_to_assemble]

I have to say that investors,and yes, those who barrow more than they can afford, all have responsibility for their own laments. Not having used due diligence or not having made prudent judgment has impacted this country in only a way that the un-just, inconsiderate, run-through-the-dark, go-with-the-gut air this nation has, can. I just wanted to make clear that any support of any private business with tax payer money is a violation of the tenants of free-market capitalism. Those who swear by the free market (and yell at liberal protesters: "get a job, you hippies" and support this move by the federal government is obviously in conflict with them-self and apparently have to keep yelling their mouth off just so that there is not enough room for their foot. It is a sad day in America, when the government decides which business will be rescued and which must perish.

[AndyJackson]

Another bunch of boomers - yes I am one - ducking their responsibility for 20 years of financial malfeasance. This guy is just another one.

It is not "all our fault." There are specific and namable scoundrels and culprits. They are easy to identify. They have profited enormously running our major financial institutions doing things that only an idiot or an ivy leaguer who thought he/she was smarter than everyone else would do.

Example. Remember the name Michael Milken. He had a whole theory on how this irresponsible investment scam worked. In the end, he theorized, if the mess was big enough and systemic enough - and he and his pals made sure it was - it was all safe because the FED had not choice but to bail them all out. Turns out he was "rights."

PS Milken was a first year boomer - I am keeping count because there are some folks around here who think that what boomers have "accomplished" is a point of pride.

[nmh]

“No we are not all to blame. Some us had studied economics and history and had enough science / engineering training to understand the no free lunch principle. Even Whimpy had to pay on Tuesday for today’s gluttony.”

Read the explanantion behind the reasons.

Keep in mind that one hand washes the other and people VOTED these freaks into office.