PoliticalChic
Diamond Member
The ongoing argument as to the cause of the mortgage meltdown has yet to be settled, but since I have always championed the idea that the political pressure, mostly Democrat, from the GSE's Fanny and Freddie, and the CRA, etc., etc. and the resulting corruption of the free market, was the main villain, let me add a little more gasoline to the fire:
"Mr. Greenspan also told the Financial Crisis Inquiry Commission that his decisions were right 70 percent of the time during his 19-year tenure as the Feds chairman, placing much of the blame for the crisis on Congress and the credit ratings agencies. (As DealBook notes here, the hearing wasnt without drama: the power went out in the middle of Mr. Greenspans testimony.)
There is a presumption that the Federal Reserve is an independent agency, and it is up to a point, but we are a creature of the Congress, Mr. Greenspan told the commission, which is holding hearings this week on subprime lending.
Had we said we are running into a bubble and we need to start to retrench, Congress would have said, we havent a clue what you are talking about.
Demand for mortgage-backed securities was heavily driven by Fannie Mae and Freddie Mac, which were pressed by the Department of Housing and Urban Development and the congress to expand affordable housing in the U.S., Mr. Greenspan said. During 2003 and 2004, the firms purchased an estimated 40 percent of private-label, subprime securities, almost all adjustable rate, newly purchased, and retained on investors balance sheets.
Greenspan Again Defends Tenure as Fed Chairman - DealBook Blog - NYTimes.com
"Mr. Greenspan also told the Financial Crisis Inquiry Commission that his decisions were right 70 percent of the time during his 19-year tenure as the Feds chairman, placing much of the blame for the crisis on Congress and the credit ratings agencies. (As DealBook notes here, the hearing wasnt without drama: the power went out in the middle of Mr. Greenspans testimony.)
There is a presumption that the Federal Reserve is an independent agency, and it is up to a point, but we are a creature of the Congress, Mr. Greenspan told the commission, which is holding hearings this week on subprime lending.
Had we said we are running into a bubble and we need to start to retrench, Congress would have said, we havent a clue what you are talking about.
Demand for mortgage-backed securities was heavily driven by Fannie Mae and Freddie Mac, which were pressed by the Department of Housing and Urban Development and the congress to expand affordable housing in the U.S., Mr. Greenspan said. During 2003 and 2004, the firms purchased an estimated 40 percent of private-label, subprime securities, almost all adjustable rate, newly purchased, and retained on investors balance sheets.
Greenspan Again Defends Tenure as Fed Chairman - DealBook Blog - NYTimes.com