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Politics : View from the Center and Left -- Ignore unavailable to you. Want to Upgrade?

To: Sam who wrote (229053)	8/9/2013 11:44:56 AM
From: Wharf Rat	Respond to of 542785

But guess what, the sky is blue, :>)

To: Sam who wrote (229053)	8/9/2013 12:07:37 PM
From: Dale Baker	Respond to of 542785

The biggest culprit in guaranteeing the garbage was AIG's Financial Products division, which is why the company was nationalized for several years. Without them the BS CDO-squared products would not have been bought by legit financial institutions everywhere. But facts don't matter to those who make the housing bubble a theological crusade. They don't need no stinkin' facts.

To: Sam who wrote (229053)	8/9/2013 12:24:20 PM
From: Bread Upon The Water	Respond to of 542785

Okay. Let us say you are right. That Fannie and Freddie's participation in buying sub-prime stuff as a percentage of the total loans made by both government and private lenders went down during the mortgage crisis. It still would be useful to know, in case the point arises during a debate about Obama's proposed housing plan (which phases out Fannie and Freddie), the extent to which Fannie and Freddie did participate (and I am not asking you to find this out) in sub-prime loans. It may be that their participation, if any, remained steady state and their percentages of subprime loans dropped in relation to the overall loan market only because private lenders participation in said market went up. In other words, they could have guaranteed 1 million subprime loans the year prior to the onset of the crisis and 1 million during the crisis and their participation would have been the same in terms of numbers, but not as percentage of the total loans made. So their participation as government guarantors still could have been significant during the mortgage loan crisis. Again, for me, this debate is only worth having not as a matter of ideology over failed or not failed policy, but only as a matter of whether Fannie and Freddie should continue to be factors in mortgage lending. It may be that question of their continuation of their existence is inextricably intertwined with the policy around the extent of their subprime loan participation, but until it comes up as point of contention in Obama's housing loan proposal it is moot point for me. I do think your point about private lenders increased participation in the mortgage mess is a good one and shows that one shouldn't automatically assume it was government policy alone that fostered that mess.