Thread: Fannie/Freddie hearing on again

On CSPAN1. I listened to about half of it earlier today. It was pretty good, but it's hard to soak all that up in one shot, so I'll probably listen to it again until it puts me to sleep. I think it's about 6 hours all together.

I watched some of it today . The part where he was explaining who they were acting on the requests by congress and the president. I was really glad to hear who was at fault. Now if they could have a hearing on derivatives and swaps we might come to realize who is actually to blame. As if we don't already.

A lot of this was due to the bubble in housing prices. I think it's interesting that they all aknowledged it was a bubble, but they seemed helpless to not exploit it. Which begs the question to those who don't believe in regulations, how do you stop these "too big to fail" institutions from driving off of a cliff, dragging everyone else with it?

Our entire housing market was inflated beyond belief, and everybody from the bankers to the appraisers, to the customers, to the developers, to the real estate agents, and probably the local governments (higher home values represent higher property taxes) were unwilling to recognize reality.

All these financial products, ways of approving people for loans they never should have gotten, were all based on the market continuing to go up.

Since when does the price of something continue to go up forever when the supply is increasing? It's not sustainable. And people who are dealing in a business that should be looking at least 30 years into the future should have known this.

They all claimed the purchasing of mortgage insurance and swaps were simply a way to hedge their bets, but they had to know if housing prices fell that would collapse also.

The biggest lie I heard was that what their mission was to provide affordable homeownership. Maybe what they charged for their services was more affordable than other mortgage companies, but what they were doing was creating a demand for homes that drove the price of the homes up.

Speculation doesn't make anything affordable.

I am glad I missed it, I just got a new fancy TV and I like it.

Originally Posted by Blueneck

A lot of this was due to the bubble in housing prices. I think it's interesting that they all aknowledged it was a bubble, but they seemed helpless to not exploit it. Which begs the question to those who don't believe in regulations, how do you stop these "too big to fail" institutions from driving off of a cliff, dragging everyone else with it?

Our entire housing market was inflated beyond belief, and everybody from the bankers to the appraisers, to the customers, to the developers, to the real estate agents, and probably the local governments (higher home values represent higher property taxes) were unwilling to recognize reality.

All these financial products, ways of approving people for loans they never should have gotten, were all based on the market continuing to go up.

Since when does the price of something continue to go up forever when the supply is increasing? It's not sustainable. And people who are dealing in a business that should be looking at least 30 years into the future should have known this.

They all claimed the purchasing of mortgage insurance and swaps were simply a way to hedge their bets, but they had to know if housing prices fell that would collapse also.

The biggest lie I heard was that what their mission was to provide affordable homeownership. Maybe what they charged for their services was more affordable than other mortgage companies, but what they were doing was creating a demand for homes that drove the price of the homes up.

Speculation doesn't make anything affordable.

So right, thing is they knew, that is why they were buying swaps and derivatives and they knew about the derivatives bubble that was being created also but most thought they could get out in time. Which seems to be working out for the ones who waited till the crisis subsided a bit. Now the government is covering those derivatives and encouraging more derivatives purchasing by giving it legitimacy through their attempt to regulate the derivatives market.

They can go on playing this too big to fail game to but at some point in the not too distant future foreigners will stop lending us money and then no one will be able to bailout anyone but someone will still have to pay for the damage that has been done.

Originally Posted by anonnymous

So right, thing is they knew, that is why they were buying swaps and derivatives and they knew about the derivatives bubble that was being created also but most thought they could get out in time. Which seems to be working out for the ones who waited till the crisis subsided a bit. Now the government is covering those derivatives and encouraging more derivatives purchasing by giving it legitimacy through their attempt to regulate the derivatives market.

They can go on playing this too big to fail game to but at some point in the not too distant future foreigners will stop lending us money and then no one will be able to bailout anyone but someone will still have to pay for the damage that has been done.

I am watching the market this morning, the DOW is up 90 points. I wonder how much the "lending" will cost us, and I am confused as to why they're doing it. I thought after the election, this bullshit would have come to an end.

Originally Posted by Blueneck

A lot of this was due to the bubble in housing prices. I think it's interesting that they all aknowledged it was a bubble, but they seemed helpless to not exploit it. Which begs the question to those who don't believe in regulations, how do you stop these "too big to fail" institutions from driving off of a cliff, dragging everyone else with it?

I am not necessarily against regulation. I just know our government fails many times even when they are supposed to be regulating something. They just don’t do it very well. More regulation would “in theory” have helped; in reality I doubt it would have helped. What they should have done was not create a moral hazard in the market. We should not have “held on to them” as they were going off the cliff and that should have been made clear by the government where their responsibility was; perhaps only then would they have been more careful.

Also, it seems the government did not want to regulate them once they began to understand the implications of what was going on. Other than this, there were many other factors that caused the bubble, which may not have been prevented by the government. Such as the fact that people wanted the bigger house, they wanted to “flip” a house and turn a profit with no credit. There were many shows like “flip this house” and others which taught people to take this risk.

The government is all too good at passing the responsibility “buck” around and never pinning it anywhere. Fannie and Freddie were completely aware of the risks, yet they assumed Uncle Sam would come to their rescue if they failed, just like the others that are “too big to fail” and know it. In other words, everyone thought someone else would be taking the responsibility if things went south, which is the definition of a moral hazard. They were right, it seems the American taxpayer is now taking the responsibility.

I agree with the rest of your post. Seriously, you can watch CSPAN and it puts you to sleep? I would just become more infuriated at the lack of action by our politicians if I watch it and I think I would have a hard time sleeping after watching something like this.

The taxpayer is not taking responsibility. It is being forced upon us.

Originally Posted by michaelr

I am watching the market this morning, the DOW is up 90 points. I wonder how much the "lending" will cost us, and I am confused as to why they're doing it. I thought after the election, this bullshit would have come to an end.

No one cares what lending costs cause they know they will not have to pay it back. As for how much it will cost us as a nation and as individual tax payers? It will cost a generation of wealth and more than likely our sovereignty as individuals and a nation.

The bullshit has not ended nor will it end. It is fixing to go from bullshit to sewage in a matter of months. All the people on the hill and in the media think we can spend our way out of this not understanding that it is the very idea of spending money we do not have that got us here and will only contribute to an already bad situation. No one on the hill or in the media is entertaining the idea of stopping spending. So we get what we have here. They want it , so they get it.

Pardon my rant but I am so damned dumbfounded that so many people can be so stupid so much of the time.

Originally Posted by anonnymous

No one cares what lending costs cause they know they will not have to pay it back. As for how much it will cost us as a nation and as individual tax payers? It will cost a generation of wealth and more than likely our sovereignty as individuals and a nation.

The bullshit has not ended nor will it end. It is fixing to go from bullshit to sewage in a matter of months. All the people on the hill and in the media think we can spend our way out of this not understanding that it is the very idea of spending money we do not have that got us here and will only contribute to an already bad situation. No one on the hill or in the media is entertaining the idea of stopping spending. So we get what we have here. They want it , so they get it.

Pardon my rant but I am so damned dumbfounded that so many people can be so stupid so much of the time.

You call that a rant, it occurs to me that when everything is collapsing, and the market does some sort of Orwellian shift to the positive, your hardly ranting at all.

I do believe the only ones buy stocks are the governments banks, and I fear the government will own everything. Wont that be keen?