HispanicPundit + fanniemae   90

The rebirth of Fannie and Freddie - Jun. 13, 2013
Today, 2 1/2 years after Geithner's principled pronouncement, Fannie and Freddie are bigger and more powerful than ever. Real estate is roaring back, and so are the players that, as much as any other, caused its crash. In fact, almost all the policy decisions that have been made since the government took control of Fannie and Freddie have failed miserably in the mission to de-emphasize their role in the economy -- instead giving the pair unintended but powerful advantages and squeezing out private competitors. The two institutions, now essentially owned by the government, are virtually the whole show in the mortgage market, guaranteeing 80% of all new home loans in America. That's almost double their market share before the credit crisis. In one of the strangest turns of events in the annals of business, Fannie and Freddie have rapidly morphed from epic money losers into unprecedented money machines.
fanniemae  fortune 
december 2013 by HispanicPundit
Bubbles: Who to blame? , Garett Jones | EconLog | Library of Economics and Liberty
Vernon Smith, emeritus professor here at GMU, ran experiments that I think give us a good reason to blame the Fed and Fannie and Freddie for a fair amount of the financial crisis--but for some reason, I don't see other economists connecting the dots the way I have.
sidebar  jones  smith  causes  financialcrisis  fanniemae 
september 2012 by HispanicPundit
More on Fannie and Freddie and the crisis
The right argues that the cause of the crisis was that the government made banks (Fannie and Freddie and CRA) buy bad loans. The left argues the government through deregulation let investment banks run amok. Each is partially correct.

My explanation is a little more complicated but it is also simpler in that it explains the behavior of the investment banks and Fannie and Freddie: past bailouts of large creditors increased the expectation of future bailouts. That in turn let all financial institutions borrow from large creditors at reduced rates and in enormous amounts relative to using their own money. Here is William Black’s recipe for how a lender can enhance short-run gains, artificially inflating profits for the institution, pocket a really big bonus, and let the costs come later (and fall on someone else):
sidebar  roberts  causes  financialcrisis  fanniemae 
january 2012 by HispanicPundit
Fannie and Freddie and the crisis
The left’s narrative does not explain why housing prices took off like a rocket between 1995 and 2003. Without that rise in housing prices, the whole subprime market would have stayed quiet. It was that rise that made it imaginable to lend money to people with little or no money down. It was that rise that encouraged people to buy a second and third house. It was that rise that allowed people to lend money to people with mediocre to poor credit because they would be able to flip the house quickly.

What explains that rise? There were a number of government policies in 1995-2003 that we would expect to push up the demand for housing–the requirements on Fannie and Freddie to ever more loans from low income borrowers, the toughening of the Community Reinvestment Act in 1995 and various state-level encouragement of home ownership. Bush I, Clinton, and Bush II all were eager to increase the home ownership rate. They were successful. Is it surprising that this push caused housing prices to r
fanniemae  financialcrisis  causes  roberts  sidebar 
december 2011 by HispanicPundit
Why the Left Is Losing the Argument over the Financial Crisis — The American Magazine
All told, after adding the SEC’s new data to our original estimates, there were approximately 28 million subprime and Alt-A loans outstanding on June 30, 2008, before the financial crisis, with a value of approximately $4.8 trillion. This was half of all mortgages in the United States. Of these loans, over 74 percent were on the books of U.S. government agencies and firms subject to government housing finance policies. This shows where the demand for these low quality loans came from. Fannie and Freddie were themselves exposed to more than 13 million subprime or Alt-A loans, or 65 percent of the government total.
sidebar  TheAmerican  causes  financialcrisis  GSE  fanniemae 
december 2011 by HispanicPundit
Greg Mankiw's Blog: GSE Fact of the Day
Edward Pinto (a former chief credit officer of Fannie Mae, and now a colleague at the American Enterprise Institute) presented the evidence to the commission showing that by 2008 half of all mortgages in the U.S. (27 million loans) were subprime or otherwise risky, and that 12 million of these loans were on the books of the GSEs
fanniemae  aeI  mankiw  sidebar 
july 2011 by HispanicPundit
Fannie Mae, Freddie Mac and the Perils of Privatization - NYTimes.com
We’ve seen too many decades of Fannie and Freddie to think that reprivatizing them will save taxpayers any money. (On Friday, Fannie requested an additional $2.5 billion from the Treasury, most of which will be used to pay a $2.1 billion dividend to the government on its nearly 80 percent stake.)
fanniemae  glaeser  economix  sidebar 
december 2010 by HispanicPundit
TheMoneyIllusion » Who’s to blame? Follow the money
The public sector bailouts is costing us much more than the private sector - and rising.
bailouts  financialbailout  fanniemae  financialcrisis  financialRegulation  sumner  sidebar 
november 2010 by HispanicPundit
Housing markets: What should be done with Fannie Mae and Freddie Mac? | The Economist
"So far, there is some (but not universal) agreement on principles but little consensus on strategy. Laurence Kotlikoff and Phillip Swagel each have plans to make Fannie and Freddie true private firms. Tom Gallagher suggests they should be returned to their pre-Johnson adminstration status, while Mark Thoma suggests that moral hazard could be reined in through new regulation and John Makin argues simply that they should go away."
fanniemae  economist  sidebar 
july 2010 by HispanicPundit
Fault Lines - Response to Paul Krugman
Raghu Rajan, of the Chicgo business school, responds to Paul Krugman on whether or not Fannie Mae and Freddie Mac caused the financial crisis.
fanniemae  subprimeCause  FinancialCrisis  krugman  Rajan  sidebar 
june 2010 by HispanicPundit
No, Barney Frank Didn't Crash The Economy | The New Republic
The argument against Fannie Mae and Freddie Mac causing the financial crisis.
FinancialCrisis  fanniemae  subprimeCause  krugman  chait  sidebar 
june 2010 by HispanicPundit
Jeffrey Miron » Blog Archive » The Fannie and Freddie Bailout Rolls On
"Sixteen months after [Fannie and Freddie] were seized to prevent their collapse, the companies remain wards of the state, running a tab that has now exceeded $125 billion in what has become the single costliest component of the federal bailout for the financial system."
fanniemae  miron  sidebar 
april 2010 by HispanicPundit
Fannie and Freddie: Budget Busters - Megan McArdle
"It's looking increasingly like Fannie Mae and Freddie Mac are going to cost the US government much more than AIG. In its latest long-term budget outlook released in late January, the CBO projected that the AIG bailout would ultimately cost the Treasury $9 billion dollars."
fanniemae  bailouts  financialbailout  financialcrisis  mcardle  sidebar 
february 2010 by HispanicPundit
Fannie Freddie data - Paul Krugman Blog - NYTimes.com
"Some readers have asked for data showing that Fannie and Freddie did not play a key role in the housing bubble. Mark Thoma has a good picture, link here."
fanniemae  subprimeCause  thoma  Krugman  sidebar 
november 2008 by HispanicPundit
A Mortgage Fact Pack, Arnold Kling | EconLog | Library of Economics and Liberty
"roughly three out of every four mortgages Freddie booked in 2006 and 2007 was either "Alt-A," an option ARM or an interest-only ARM (I assume those categories don't overlap). That means that only a small minority of the loans that that they guaranteed were traditional investment-quality loans."
fanniemae  subprimeCause  Kling  sidebar 
november 2008 by HispanicPundit
Bloggingheads.tv - diavlogs
Loury vs. McWhorter on the second debate. Loury takes McCain's side and McWhorter is the elitest on this one. Also, Loury basically defends the conservative view of the subprime mortgage crisis.
obama  campaign2008  McCain  subprimeCause  minorities  fanniemae  bloggingheads  loury  mcWhorter  sidebar 
october 2008 by HispanicPundit
Pressured to Take More Risk, Fannie Reached Tipping Point - Series - NYTimes.com
How the pressure to lend more to minorities and the reluctance of others to speak truthfully on it caused the fall of Fannie Mae and Freddie Mac and brought the financial sector down with it.
FannieMae  subprimeCause  Minorities  NewYorkTimes  sidebar 
october 2008 by HispanicPundit
Steve Sailer's iSteve Blog: The two kinds of bell curves
How PC'ness, in alot of ways, is the real cause of the financial mess, especially the fall of fannie mae and freddie mac.
FannieMae  subprimeCause  Minorities  sailer  sidebar 
october 2008 by HispanicPundit
Crisis roundtable: A final Frannie salvo | Free exchange | Economist.com
Whether or not fannie mae and freddie mac were the primary causes of the financial mess it is clear that they were one of the major ones.
FannieMae  subprime  FinancialBailout  economist 
october 2008 by HispanicPundit
George Will :: Townhall.com :: The Bust of a Bailout
Will on moral hazard, government irresponsibility, and the role of fannie mae and freddie mac.
government  FannieMae  subprimeCause  FinancialBailout  republicans  will  sidebar 
october 2008 by HispanicPundit
Crisis roundtable: More Fannie and Freddie | Free exchange | Economist.com
The argument that Fannie Mae and Freddie Mac were at the HEART of the financial mess.
FannieMae  subprimeCause  economist  sidebar 
october 2008 by HispanicPundit
Thomas Sowell :: Townhall.com :: Bailout Politics
The role of Democrats, minority home ownership, and the drive for "affordable housing" in the financial crisis.
FinancialBailout  subprime  FannieMae  Minorities  Sowell  sidebar 
september 2008 by HispanicPundit
Thoughtful Ideas - The Bush Connection
The role a push for minority ownership had in the financial meltdown.
FannieMae  subprimeCause  bush  Rabushka  sidebar 
september 2008 by HispanicPundit
CARPE DIEM: The Mind-Numbing Effects of Political Correctness
"After three decades of the home ownership rate stalling at around 64%, a series of federal initiatives to increase minority and low-income ownership helped push the rate up to just below 70%. "
subprimeCause  Minorities  perry  FannieMae  sidebar 
september 2008 by HispanicPundit
Cafe Hayek: Krugman gets the facts wrong
Fannie Mae did have the power and the means to intervene in subprime market.
FannieMae  subprime  Krugman  Roberts  sidebar 
september 2008 by HispanicPundit
CARPE DIEM: Flashback to 1999: Origins of the Credit Crisis
From the NY Times on September 30, 1999: "Fannie Mae Eases Credit To Aid Mortgage Lending".
FannieMae  subprimeCause  perry  sidebar 
september 2008 by HispanicPundit
Blame Fannie Mae and Congress For the Credit Mess - WSJ.com
How the political obsession with "affordable housing" and "home ownership" backfired.
FannieMae  subprime  wsj  sidebar 
september 2008 by HispanicPundit
Cafe Hayek: Fannie's and Freddie's Fates No Surprise to Good Economists
CATO warned about the future fate of Fannie Mae and Freddie Mac in early 2000.
cato  subprime  FannieMae  boudreaux  sidebar 
september 2008 by HispanicPundit
Walter E. Williams :: Townhall.com :: Stubborn Ignorance
Regulations, and a push for low income housing, part in the financial crisis.
FannieMae  subprime  regulations  williams  sidebar 
september 2008 by HispanicPundit
Cafe Hayek: Affordable equals "subprime"
"It shows Fannie and Freddie's role (and HUD's) in creating the debacle."
FannieMae  subprime  loans  regulations  Clinton  Roberts  sidebar 
september 2008 by HispanicPundit
Cafe Hayek: Fannie reaches its goals--sort of
"It's a mixture of fraud, inadequate oversight (love that lobbying, Fannie) and the use of funky loans from now-imperiled Washington Mutual to meet HUD goals of supporting affordable housing."
FannieMae  Roberts 
september 2008 by HispanicPundit
Cafe Hayek: Housing markets without the benefit of hindsight
"He argues that Fannie and Freddie are supposed to be helping low-income families get loans but are shirking because they are too concerned with their other mission of profitability"
FannieMae  Roberts 
september 2008 by HispanicPundit
Still in the dark - winterspeak.com
Winterspeak does not buy or understand much of what the freakonomics post said.
subprime  loans  FinancialBailout  FannieMae  freakonomics  winterspeak 
september 2008 by HispanicPundit
Economic View - Too Few Regulations? No, Just Ineffective Ones - NYTimes.com
"But it’s not obvious that the less regulated financial sector performed any worse than the highly regulated housing and bank mortgage lending sectors, including, of course, the government-sponsored mortgage agencies."
FannieMae  regulations  subprime  loans  cowen  sidebar 
september 2008 by HispanicPundit
Shrinking the GSEs | Free exchange | Economist.com
Hopefully the next administration will not decide to grow - again - the GSE's.
FannieMae  economist  sidebar 
september 2008 by HispanicPundit
EconLog, The No-Bailout Option, Arnold Kling: Library of Economics and Liberty
"The moral of the story is that Barney Frank's idea of a financial system, in which a very forgiving government-sponsored lender makes low down-payment loans in the name of "affordable housing," only works for a while. Eventually, it uses up a lot of money and a lot of time and effort on the part of the civil servants trying to put Humpty-Dumpty back together."
FannieMae  caplan  Kling  sidebar 
september 2008 by HispanicPundit
Megan McArdle (September 09, 2008) - Housing: put it down
McArdle responds to Kling on what the GSE's should do - no easy solution.
FannieMae  subprime  loans  Kling  McArdle  sidebar 
september 2008 by HispanicPundit
EconLog, If I Were Mortgage Czar, Arnold Kling: Library of Economics and Liberty
"If I were the czar of the mortgage market, I would attempt to bring back the 30-year amortizing fixed-rate mortgage with a 20 percent down payment. As recently as fifteen years ago, this was the workhorse of the housing market."
FannieMae  Kling  sidebar 
september 2008 by HispanicPundit
Marginal Revolution: What if we didn't bail out the creditors?
What would happen if we didn't bail out the GSE's? This is what.
FannieMae  cowen  sidebar 
september 2008 by HispanicPundit
EconLog, The McCain-Stiglitz Axis, Arnold Kling: Library of Economics and Liberty
"I lean toward the McCain-Stiglitz view. The priority should not be getting capital to Freddie and Fannie to support their growth. The priority should be diversifying the sources of mortgage finance."
FannieMae  McCain  summers  Kling  sidebar 
july 2008 by HispanicPundit
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