The Residential Real Estate Crash Index Message Board

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Strategies & Market Trends : The Residential Real Estate Crash Index

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To: ChanceIs who wrote (158779)	10/21/2008 1:10:15 PM
From: CalculatedRisk	Read Replies (1) of 306849

If the argument is Fannie and Freddie played some small role in the bubble - fine, I'll accept that. There will be plenty of blame to go around, but the "blame the GSEs" meme is ... well ... stupid. We (the long term readers of this thread) know that the GSE role was very small compared to other factors. As I noted before, most of the damage was done trying to get around the GSE guidelines. We all know that. Think New Century to Bear Stearns to Norwegian investors! Follow that thread and we realize the GSEs were not involved - and if they had been, the MBS wouldn't have been so toxic (There is a reason the GSE MBS is performing much better than the Wall Street MBS). If the GSEs hadn't existed, the bubble would have happened anyway ... The GSEs have been a disaster in the making for years. All it took was a bubble and a bust to expose the problems. But blaming them for the bubble is definitely wrong, and will lead to the wrong solutions.

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