I hope both of these mortgage giants fail...and i hope their debt is purchased by smaller less connected mortgage corporations who will lend money more responsibly.

props to NPR of all places...to write the article.

link: http://www.npr.org/templates/s...40620

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Homeowners might think of Fannie Mae and Freddie Mac as just the big dogs of the mortgage business, but in Washington, D.C., they're known as big players in lobbying. The two companies managed to stave off government regulation for years by lobbying hard — and spending generously. In the first three months of the year alone, Fannie Mae and Freddie Mac spent a combined total of about $3.5 million on lobbying and hired 42 outside firms. Their lobbying reports were analyzed by the Center for Responsive Politics. That kind of clout, coupled with huge mortgage portfolios reaching into every corner of the country, illustrates why they have never lacked for confidence on Capitol Hill. Former Rep. Jim Leach (R-IA) is an old nemesis of Fannie and Freddie. In Congress, he helped lead efforts to rein them in. "There've been a lot of rhetorical efforts to tighten regulation, but Fannie and Freddie have both done a pretty deft job of fending that off," Leach says. "Muscular" is another word he uses to describe those efforts. Fannie and Freddie have kept their profiles high because of their odd situation: They're not government agencies, but they're not regular corporations either. As government sponsored enterprises, or GSEs, they're often thought to have guarantees of federal support. It lets them get discounts when they borrow money. To maintain that advantage and others, they hire well-placed politicos for big salaries. A rival lobbyist once described Fannie Mae as a political organization that happened to be in the mortgage business. Past executives include Democratic operatives and appointees. Former CEO Jim Johnson made headlines last month after reports that he may have received preferential treatment in real estate deals forced him out as head of Illinois Sen. Barack Obama's vice presidential search team. It's a similar story over at Freddie Mac: Former Rep. Susan Molinari (R-NY) is a contract lobbyist, and Democratic operative Harold Ickes used to be on the board. And the two GSEs are famous for campaign contributions to both parties. Leach, who is now the director of Harvard University's Institute of Politics and chairman of the watchdog group Common Cause, says he finds that especially troubling. "They have done an awful lot in terms of the money game that have caused the kinds of conflicts of interest that have bedeviled the American political system," he says. In 2006, Fannie farmed out almost a million dollars in contributions, while Freddie forked over more than $600,000. That same year, the nation's biggest lender, Countrywide, gave $250,000. The GSEs also raise money from others. Five years ago, a Freddie Mac document described an 18-month push by the company's lobbyists in which they held more than 75 fundraising events for members of one House committee. Freddie Mac later was forced to pay the Federal Election Commission a record-setting $3.8 million fine. Even now, Fannie Mae and Freddie Mac's recent troubles may not dim their influence on Capitol Hill, says Mike House, director of FM Policy Focus, a lobbying group that's campaigned for years to regulate the GSEs more strictly. "They'll have clout because of the role they have," House says. "Whether it's more or less, we'll just have to see." The GSEs are waiting to see, as well. Spokespeople at Freddie Mac didn't return requests for comment Monday. And executives at Fannie Mae weren't talking.

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I like how the free market is only free for the little guys who don't have connections/lobbying power. I am 100% against a bail-out, and 100% for a bankruptcy and redistribution of both companies.

"When fascism comes to America, it will be wrapped in the flag and carrying the cross." - Sinclair Lewis

RonPaul2008!!!

...because our slowly collapsing economy could not take the hit?

I absolutely hate to see these morons get bailed out, especially when they deliberately perpetrated this house of cards to get rich quick and keep passing on the losses to the last party but do we have any other choice?

http://www.postgamepub.com - All sports all the time

come on bishop...the economy might be slowing and receding...but its not collapsing.

i think you've been taking freeeebird too seriously lately.

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Go read the first post in my thread in the GDD again, then realize I've hit the nail on the head on almsot every point I made this time last year.

It's going to get much much worse.

You can cruise that river in Egypt all you want, but it doesn't change the fact you're wrong.

i disagree and here's why.

the economy expanded faster than it should have...interest rates were low...the housing market was appreciating extremely fast...and now high fuel prices have combined with a correcting housing market and subsequent "credit card crunch."

this doesn't mean we're in for a depression and just means were in for a few years of market correction. in the end...over a 10 year period...we'll see similar growth to what we've always seen...and in the meantime more foreigners will be spending their money here in the united states while the dollar is cheap.

most people i know are still working...and those without a job (here in florida) weren't skilled enough to keep their jobs or were working in an artificial market. overall...americans will still be productive and they'll still go to work everyday and they'll still offer goods and services to people here in this country and around the world.

i realize its trendy for you to hype the next great depression...but its simply not realistic.

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You got a bunch of that right, except its a "credit crunch", and its not a correcting housing market, its a crashing housing market.

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this doesn't mean we're in for a depression and just means were in for a few years of market correction.

Wrong, credit crisis = credit contraction = deflation = depression. Its how these things work.

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in the end...over a 10 year period...we'll see similar growth to what we've always seen...

No we won't. Care to make a bet on this? Cool $100 sound good?

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and in the meantime more foreigners will be spending their money here in the united states while the dollar is cheap.

Not nearly enough to make up for the financial storm we face.

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most people i know are still working...and those without a job (here in florida) weren't skilled enough to keep their jobs or were working in an artificial market.

And those people who "aren't skilled enough" or who were "working in an artifical market" as you put it, still pumped lots of consumption back into the economy, take that away and other businesses suffer greatly, leading to more layoffs . . . leading to less consumption, its a vicious cycle, a deflationary death cycle is the term used by economists.

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overall...americans will still be productive and they'll still go to work everyday and they'll still offer goods and services to people here in this country and around the world.

Ok, but riddle me this, between the stock markets losses since October and the housing markets losses over the last two years, several trillion dollars worth of wealth has disapeared. Where will people get the money to buy and goods and services when gas is so expensive? Where will it come from when the stock market has wiped out their 401k and the housing crash has wiped out their homeonwers equity and their CC has been locked because they depended on it to survive?

I'm sure you'll give us some BS answer "Oh, well no one I know is in that position" or "only idiots got into trouble with thier money", guess what, those are still people who prop up the economy with their money, since 70% of our GDP is based off of consumer spending.

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i realize its trendy for you to hype the next great depression...but its simply not realistic.

Bullshit, it's not trendy, its the truth. The only thing not realistic is your interpretation of the world, the whole world all aroind you, not just your self delusional, narcisistic interpretation within your own thoughts and ideals of the world that you justify by using the opinions of those that fit your mold for X topic in X situation.

cliffs: DIAFAH

people were spending money they didn't have and banks were lending money they shouldn't have lent.

there is no doubt we are in for some difficult times because of this...but let me provide this.

if people lived within their means and only purchased what they could afford...we'd see slow steady growth in our economy. there would be less ups/downs etc and less fluctuation due to internal forces. obviously...its impossible to control what happens in other parts of the world...but the majority of the problems were facing have been caused by our own reckless behavior.

with that said, there are people who made millions of dollars during the last 3 years...and there are many people who will seize on great deals throughout the real estate market all over the country.

i would also gladly bet you 100.00 that in the next 10 years we won't see a depression or really come that close to one. we'll experience some inflation and we'll see more difficult times over the next 2-3 years but in 5-6 everything will be cruising forward unless some unforeseen event happens...like a big attack...war...etc.

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What will those jobs be replaced with?

of course we're losing them...

the chinese and other 3rd world countries can do it cheaper.

americans will do something else...as we've always done.

we don't make t-shirts anymore do we?

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Secondly, oil is going to crash soon. I don't have time to explain all the reasons why right now but you'll see a few things come out of this. Already stocks are in rally mode on Wall Street. Obviously gas will get cheaper. That last little tid bit will have a trickle down effect on MANY industries.

Does this mean a complete 180? Probably not but it's a much rosier outlook than most doomsday economists had predicted.

Lastly, do NOT bail out Freddie and Fannie. If one were inclined to believe pirates still existed in the classical sense, these would be Blackbeard and Redbeard respectively. Common criminals with uncommon connections.

I hear this a lot, but I just can't get there. A weak dollar is still a hell of a lot more than a peso, yuan, a won, dong, baht, rupee, etc.

I think what will bring manufacturing jobs back (over time) is the skyrocketing price of fuel. If you think oil is done spiking, think again.

Quote, originally posted by Knightsport »

Secondly, oil is going to crash soon. I don't have time to explain all the reasons why right now but you'll see a few things come out of this. Already stocks are in rally mode on Wall Street. Obviously gas will get cheaper. That last little tid bit will have a trickle down effect on MANY industries.

This rally was short-lived (I just gave back all my gains this morning). Tech earnings weren't great, and people are worrying that the slowdown is just beginning, rather than reversing course.

For my part, I have no opinion on the Freddie/Fannie thing. This government exists to enrich private interests, and will do whatever is in the best interests of those entities. We have crony capitalism, not a free market.

Agreed on both accounts but what I said ties into the fact that transporting those goods from cheaper areas of manufacture is getting really expensive.

And the dollar isn't done going down yet, just wait. I swear I feel the Amero coming on.

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This rally was short-lived (I just gave back all my gains this morning). Tech earnings weren't great, and people are worrying that the slowdown is just beginning, rather than reversing course.

You need to diversify.

While I don't disagree (and the thought of bailing out anyone who helped screw the pooch over the last 10 years), what choice do we have? I'm not one for more government intervenion but one would think that further regulation of the industry would be a good place to start, after we bail them out.

http://www.postgamepub.com - All sports all the time

AS for government bailouts, WTF. If you fail you do it on your own and no one helps you out. I don't expect the government to bail my race shop out.

if you did...i'm sure congress would be looking for ways to bail you out if you ran into trouble down the road.

unfortunately...this is just how it works when former politicians have ties to congress/the white house...etc.

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Chet, you know if you go any further w/this you're going to be straying into very Progressive/"Liberal" territory, right? And also w/this...

Quote, originally posted by chet »

of course we're losing them... the chinese and other 3rd world countries can do it cheaper. americans will do something else...as we've always done.

We need substantial public investment (read: taxes) to do the "something else."

its also ironic when you say that i'm headed towards progressive/liberal territory when commenting on the recent attempts to bailout freddie mae...especially when many of their high ranking board members have ties to the clinton administration.

i also don't believe we need public investment to create new jobs and new innovations.

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