Who did what?

[Texanmike]

Fannie and Freddie purchased toxic securities just like everyone else. Why should that surprise anyone? Why would you expect them to do any differently?

They held the wrong side of some CDS's just like everyone else.

Yeah but 1 trillion in bail outs?? Seems to me like they were a little irresposible.

400B to 1trillion when they allegedly owned half the market? Ya think the private sector cost more than 1 Trillion for their half? (hint: the answer is not yes)

They owned almost 50% of all mortgages, they had to be affecting the morgage market somehow with their activity.

Affecting the market? of course! You're assuming that they affected the market AND that you know how they did so because it fits the right's hunch. But can you explain how it affected the market?

If you lower the standards required to borrow money you increase the demand for available houses by giving more buyers the ability to buy.

If you give more buyers the ability to buy you drive up the price of each house and you encourage new homes to be built because of a higher profit margin. If you do this then you also decrease the value when the bubble pops. Now there is an extreme excess of homes available for purchase and very little demand because money is harder to buy.

Does that explain it?

Mike

 

[signelect]

We voters did it. We elected congress and allowed them to build a self sustaining empire where they and their families make a lot of money off the government and the lobbyist and we still reelected them. Then we looked at the clean cut boy from Chicago and said maybe a change is good. He surrounded himself with a tax cheat or Treasury, an idiot for Justice and created the Czar movement so congress had not over sight and now here he are. Our of money, out work and almost out of hope. He push green to the point that his friend only took a year to blow 1/2 a billion dollars before declaring bankruptcy.

Go green in 2012 - recycle Obama

 

[Rocko]

The bottom line is Fannie and Freddie are not really private institutions, and their goals are broader than making a profit, and that's the problem.

 

[The Rabbi]

If you buy loans you lend money. I am not certain what part of that could be unclear.

Well, the fact that it is wrong is what's unclear. You're buying a product from a person who sold the loan. You're not loaning money to that person or anyone else.

They played in the Alt-A market--loans that were not good enough to be plain vanilla but at the top of the B/C market. Of course their losses will be less on those.
What point were you trying to make here?

You just made it for me - they were not involved in packaging the most toxic assets.

Hard to blame one company for another company's decision to purchase and repackage bad assets.

A loan is not a product in the normal sense. You are buying loans, collecting interest, foreclosing etc. You are an indirect lender. That is pretty simple. I would imagine even you could comprehend that.

I never made the claim that Fannie was involved in packaging the most toxic assets. But I dont even know what that means. Fannie securitized loans that were sold in tranches. The lowest tranches became toxic assets. Nothing complicated about that.

 

[The Rabbi]

The bottom line is Fannie and Freddie are not really private institutions, and their goals are broader than making a profit, and that's the problem.

You are correct. They were not private institutions. They had congressional oversight that a private institution did not have. They were chartered by the gov't, which a private company is not. And most importantly they had an implied (and in retrospect actual) guarantee by the Federal gov't on their products. As such they were subject to congressional whim, which included making home ownership affordable. Since their goals were not exclusively profit oriented they did things that ran contrary to that goal. the result of that is that the taxpayer has been on the hook for their folly to the tune of billions.

 

[Bfgrn]

The bottom line is Fannie and Freddie are not really private institutions, and their goals are broader than making a profit, and that's the problem.

You are correct. They were not private institutions. They had congressional oversight that a private institution did not have. They were chartered by the gov't, which a private company is not. And most importantly they had an implied (and in retrospect actual) guarantee by the Federal gov't on their products. As such they were subject to congressional whim, which included making home ownership affordable. Since their goals were not exclusively profit oriented they did things that ran contrary to that goal. the result of that is that the taxpayer has been on the hook for their folly to the tune of billions.

Between 2004 and 2006, when subprime lending was exploding, Fannie and Freddie went from holding a high of 48 percent of the subprime loans that were sold into the secondary market to holding about 24 percent, according to data from Inside Mortgage Finance, a specialty publication. One reason is that Fannie and Freddie were subject to tougher standards than many of the unregulated players in the private sector who weakened lending standards, most of whom have gone bankrupt or are now in deep trouble.

During those same explosive three years, private investment banks — not Fannie and Freddie — dominated the mortgage loans that were packaged and sold into the secondary mortgage market. In 2005 and 2006, the private sector securitized almost two thirds of all U.S. mortgages, supplanting Fannie and Freddie, according to a number of specialty publications that track this data.

Read more: Private sector loans, not Fannie or Freddie, triggered crisis | McClatchy

 

[The Rabbi]

The bottom line is Fannie and Freddie are not really private institutions, and their goals are broader than making a profit, and that's the problem.

You are correct. They were not private institutions. They had congressional oversight that a private institution did not have. They were chartered by the gov't, which a private company is not. And most importantly they had an implied (and in retrospect actual) guarantee by the Federal gov't on their products. As such they were subject to congressional whim, which included making home ownership affordable. Since their goals were not exclusively profit oriented they did things that ran contrary to that goal. the result of that is that the taxpayer has been on the hook for their folly to the tune of billions.

Between 2004 and 2006, when subprime lending was exploding, Fannie and Freddie went from holding a high of 48 percent of the subprime loans that were sold into the secondary market to holding about 24 percent, according to data from Inside Mortgage Finance, a specialty publication. One reason is that Fannie and Freddie were subject to tougher standards than many of the unregulated players in the private sector who weakened lending standards, most of whom have gone bankrupt or are now in deep trouble.

During those same explosive three years, private investment banks — not Fannie and Freddie — dominated the mortgage loans that were packaged and sold into the secondary mortgage market. In 2005 and 2006, the private sector securitized almost two thirds of all U.S. mortgages, supplanting Fannie and Freddie, according to a number of specialty publications that track this data.

Read more: Private sector loans, not Fannie or Freddie, triggered crisis | McClatchy

OK. And?

 

[8537]

Yeah but 1 trillion in bail outs?? Seems to me like they were a little irresposible.

400B to 1trillion when they allegedly owned half the market? Ya think the private sector cost more than 1 Trillion for their half? (hint: the answer is not yes)

They owned almost 50% of all mortgages, they had to be affecting the morgage market somehow with their activity.

Affecting the market? of course! You're assuming that they affected the market AND that you know how they did so because it fits the right's hunch. But can you explain how it affected the market?

If you lower the standards required to borrow money you increase the demand for available houses by giving more buyers the ability to buy.

Perhaps the private sector shouldn't have been so hell-bent on lowering standards and taking more market share of the subprime market form the GSE's.

Does that explain it?

I think I understood it just fine without your help, thanks.

 

[8537]

Well, the fact that it is wrong is what's unclear. You're buying a product from a person who sold the loan. You're not loaning money to that person or anyone else.



You just made it for me - they were not involved in packaging the most toxic assets.

Hard to blame one company for another company's decision to purchase and repackage bad assets.

A loan is not a product in the normal sense. You are buying loans, collecting interest, foreclosing etc. You are an indirect lender. That is pretty simple. I would imagine even you could comprehend that.

You are buying an asset. That asset is a product. It's so simple, but I have no doubt you'll deny the obvious for pages on end, then call folks names, then neg rep me for pointing out that you are wrong.

 

[The Rabbi]

400B to 1trillion when they allegedly owned half the market? Ya think the private sector cost more than 1 Trillion for their half? (hint: the answer is not yes)


Affecting the market? of course! You're assuming that they affected the market AND that you know how they did so because it fits the right's hunch. But can you explain how it affected the market?

If you lower the standards required to borrow money you increase the demand for available houses by giving more buyers the ability to buy.

Perhaps the private sector shouldn't have been so hell-bent on lowering standards and taking more market share of the subprime market form the GSE's.

.

The GSE's weren't just sitting still for it. They aggressively lowered standards as well.

 

[The Rabbi]

A loan is not a product in the normal sense. You are buying loans, collecting interest, foreclosing etc. You are an indirect lender. That is pretty simple. I would imagine even you could comprehend that.

You are buying an asset. That asset is a product. It's so simple, but I have no doubt you'll deny the obvious for pages on end, then call folks names, then neg rep me for pointing out that you are wrong.

Here's your neg rep. I figured it was really pretty simple and even you could understand it. I guess not.

 

[8537]

If you lower the standards required to borrow money you increase the demand for available houses by giving more buyers the ability to buy.

Perhaps the private sector shouldn't have been so hell-bent on lowering standards and taking more market share of the subprime market form the GSE's.

.

The GSE's weren't just sitting still for it. They aggressively lowered standards as well.

Not fast enough, apparently. They lost almost half of their market share. They were chased out of the market by private sector lenders.

 

[8537]

You are buying an asset. That asset is a product. It's so simple, but I have no doubt you'll deny the obvious for pages on end, then call folks names, then neg rep me for pointing out that you are wrong.

Here's your neg rep. I figured it was really pretty simple and even you could understand it. I guess not.

you're as predictable as the morning sun. As soon as someone demonstrates how stupid your comment was, you neg rep them.

ouch! Stop hurting my internet reputation Rabbi! It hurts me!

 

[The Rabbi]

Perhaps the private sector shouldn't have been so hell-bent on lowering standards and taking more market share of the subprime market form the GSE's.

.

The GSE's weren't just sitting still for it. They aggressively lowered standards as well.

Not fast enough, apparently. They lost almost half of their market share. They were chased out of the market by private sector lenders.

Contradiction.
If they lost almost half their market share then they were obviously not chased out of the market.
It is irrelevant. Private lenders' mortgages were not guaranteed by the U.S. government. I really don't care if Countrywide's securitizations reached 20% default rates. That's their problem. But Fan/Fred's default rates are our problem because we're paying for them.

 

[The Rabbi]

Here's your neg rep. I figured it was really pretty simple and even you could understand it. I guess not.

you're as predictable as the morning sun. As soon as someone demonstrates how stupid your comment was, you neg rep them.

ouch! Stop hurting my internet reputation Rabbi! It hurts me!

No, it's when someone demonstrates they will willfully ignore logic and evidence and cling to the same myths that I neg rep them.
It's happened often to you. And you still don't learn.
Fan/Fred did not buy product like peanuts or blenders to resell. They did not buy stocks and bonds. They bought mortgages and either held them in their own portfolio or securitized them. Just liek Countrywide. That makes them a mortgage lender, because ultimately it is their money that gets loaned.

 

[8537]

The GSE's weren't just sitting still for it. They aggressively lowered standards as well.

Not fast enough, apparently. They lost almost half of their market share. They were chased out of the market by private sector lenders.

Contradiction.
If they lost almost half their market share then they were obviously not chased out of the market.

No, if they lost half of their market share they obviously WERE chased out of the market - they got chased out of half of the mortgages.

It is irrelevant. Private lenders' mortgages were not guaranteed by the U.S. government. I really don't care if Countrywide's securitizations reached 20% default rates.

Oh really? Who ended up guaranteeing those and paying for them?

 

[8537]

you're as predictable as the morning sun. As soon as someone demonstrates how stupid your comment was, you neg rep them.

ouch! Stop hurting my internet reputation Rabbi! It hurts me!

No, it's when someone demonstrates they will willfully ignore logic and evidence and cling to the same myths that I neg rep them.

Well that's special my little racist friend. You'll be proud to know you're about the only neg rep I've ever gotten, mr internet tough guy.

Fan/Fred did not buy product like peanuts or blenders to resell. They did not buy stocks and bonds.

what the fuck are you talking about? Of course they bought bonds. Buy a clue before you continue.

They bought mortgages and either held them in their own portfolio or securitized them. Just liek Countrywide. That makes them a mortgage lender, because ultimately it is their money that gets loaned.

No, not at all like Countrywide. Countrywide originated mortgages. FM's did not.

 

[The Rabbi]

Not fast enough, apparently. They lost almost half of their market share. They were chased out of the market by private sector lenders.

Contradiction.
If they lost almost half their market share then they were obviously not chased out of the market.

No, if they lost half of their market share they obviously WERE chased out of the market - they got chased out of half of the mortgages.

It is irrelevant. Private lenders' mortgages were not guaranteed by the U.S. government. I really don't care if Countrywide's securitizations reached 20% default rates.

Oh really? Who ended up guaranteeing those and paying for them?

Now your'e going to define "chased out" as "lose market share."
Are you actually this stupid or is it an act online?

 

[The Rabbi]

No, it's when someone demonstrates they will willfully ignore logic and evidence and cling to the same myths that I neg rep them.

Well that's special my little racist friend. You'll be proud to know you're about the only neg rep I've ever gotten, mr internet tough guy.


what the fuck are you talking about? Of course they bought bonds. Buy a clue before you continue.

They bought mortgages and either held them in their own portfolio or securitized them. Just liek Countrywide. That makes them a mortgage lender, because ultimately it is their money that gets loaned.

No, not at all like Countrywide. Countrywide originated mortgages. FM's did not.

Countrywide both originated mortgages and bought from other brokers. That Fan/Fred didnt originate their own is irrelevant to whatever point you think you are making.

 

[Rocko]

So, it's only the loans that were originated that you have a problem with? Countrywide did plenty of refinancing too, and when they did refinance they became the lender, just like Fannie and Freddie.