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Strategies & Market Trends : The Residential Real Estate Crash Index -- Ignore unavailable to you. Want to Upgrade?

To: tejek who wrote (262563)	7/21/2010 12:09:37 AM
From: Les H	Read Replies (2) \| Respond to of 306849

"Freddie and Fannie are buyers of mortgages in the secondary market. By the time they got involved the damage had already been done hundred fold. " They got involved in 2006 because Washington saw that private mortgage origination had fallen off dramatically after Katrina and the housing market threatened the economy with a recession. In fact, GDP went negative for one quarter by Q3 2006. "I think blaming Bernanke and Greenspan is nonsense." A lot of the housing inflation between 2000 and 2004 can be traced to the much lower rates for loans. Remember that Greenspan & Bernanke forced down bonds rates by holding down short-term rates at 1 pct for a couple of years and threatening outright purchases of treasuries. Greenspan also promoted the use of ARMS which became very popular from 2004 to 2006. As a result, the typical rate for mortgages dropped from 8.5% (30yr fixed) to below 4.0% (5yr ARMs) by 2004. Greenspan was also petitioned to crack down on abusive subprime lending by banks but refused. This was just before subprime mortgage lending took off.

To: tejek who wrote (262563)	7/21/2010 1:39:03 AM
From: The Reaper	Read Replies (1) \| Respond to of 306849

I mean how many bankers do you know who are Dems? Jamie Dimon and Robert Rubin off the top of my head. I'm sure there are plenty more after digging some. Not to mention the fact that the 6 biggest banks gave more to Dem federal candidates than Republican, but that's probably because the Dem's were the party in power and they wanted to make sure they had their bases covered with the guys calling the shots.