Fannie Mae, Freddie Mac Bailout Would Cost Taxpayers Dearly

New York Times:

IT'S dispiriting indeed to watch the United States financial system, supposedly the envy of the world, being taken to its knees. But that's the show we're watching, brought to you by somnambulant regulators, greedy bank executives and incompetent corporate directors.

This wasn't the way the "ownership society" was supposed to work. Investors weren't supposed to watch their financial stocks plummet more than 70 percent in less than a year. And taxpayers weren't supposed to be left holding defaulted mortgages and abandoned homes while executives who presided over balance sheet implosions walked away with millions.

Read the whole story: New York Times

Comments

[unbozo]

I'd like to own Gramm's head so I can use it as a commode I'll show you trickle down!

[Robespierre]

Brilliant!!! That is the best comment yet!!!

Gramm is a waste of space!!!

Anyone who is stupid enough to vote for a Republican this November ought to have his head examined. Seriously, these guys put us into this quagmire. They have no plan to extricate us from it. Now their big dollar buddies are going to see some pain too. Idiots!!!

[loki]

I would suggest investing heavily in anal lubricant as 300 million people are about to take it deep , hard and a very long time. Thank you to both the Republicans and Democrats, for apparently only the spelling separates who they are in congress.

[sparkey]

The taxpayers will get the bill. The CEO's will get the money. The CEO's are happy, the governmet is happy and to hell with the taxpayers. A hint that Bin Laden has been spotted will dominate the news and this will be forgotten.

[truthynesslover]

On C.n.n. last night they said there are ninety other banks on the verge of insovency but the names wont be released for fear of a run.Way to go republicans you should be proud!!

[Heretic]

Is anyone suprised? GWB is Hoover redux.

Face it, Republicans cannot handle the American economy nor governing in general.

[JaseAllen]

I'm sure they are proud. The rich are richer, the poor are poorer, and the Democratic majority in Congress are spineless. Their /real/ mission is accomplished.

[tompoe]

As I understand things, borrowers were given loans with payments they could afford. When subprime lenders built in huge jumps in payments, borrowers could not afford new payments, and had to default. It looks to me like we have a lender credibility gap, not a borrower gap. So, why are we bailing out the practitioners of free market economy/corporate welfare? It's time to bite the bullet, and make sure the raping and pillaging crowd eats dirt. The rest of us are going to be eating dirt soon enough. NO More Corporate Welfare for Wall Street! and let the dung chips fall where they may.

[joebaggadonuts]

It has become painfully clear that we can't administer justice to the "raping and pillaging crowd" while the current crop of officials is in office. At least not without violent revolution. So, we will just have to wait.

[WIpatriot]

We'll wait...for now, joe.

[BobEvansZombie]

Gee, who didn't see this one coming when Republicans are in charge. Get ready for the coming economic collapse of America. I wonder if the Union will follow.

[Heretic]

GWB legacy: pushing homeownership on low to middle class and minorities, all the while sealing a back door deal for his banker friends to run away with the profits, his appointed regulators look the other way, and the tax payers are left with the massive debt.

http://findarticles.com/p/articles/mi_qa5344/is_200208/ai_n21316979

http://www.whitehouse.gov/news/releases/2002/10/20021015.html
http://www.whitehouse.gov/news/releases/2003/06/20030613.html
http://www.whitehouse.gov/news/releases/2006/05/20060524-6.html

Go ahead, please tell me this is just another crazy conspiracy theory.

[paixa3]

The elimination of the middle class is happening, that is NOT conspiracy theory, that is REALITY.

[argeec]

This article smells like a plant from the wall street firms that hate Fannie and Freddie because they take business from them.
Fannie and Freddie are paragons of virtue compared to wall street.

[nanotubz]

You're overly paranoid. Suggest you actually read up on the actual relationship between Wall Street and Fanny and Freddy.

[gevan]

If it turns out that the taxpayers are left holding the defaulted loans and abandoned homes, I suppose that our system would start to tip towards the nationalization of homeownership. Welcome to the brave new world of Bushinomics.

[TimmySlagle]

But we're forgetting one key aspect of the problem: The borrowers. The people that banks wouldn't write mortgages for, because they weren't good risks.

The Feds jumped in, and essentially said that the Banks were wrong. Liberals screamed that if these bad risks were just given a chance, they would prove they were worthy of the mortgages the Banks were denying them.

Apparently, the Banks were right all along.

[Podewumun]

You could not be more wrong.

[TimmySlagle]

Podewumun writes: "You could not be more wrong."

Sure I could.

I could be a Democrat!

[Heretic]

"Liberals" weren't the ones pushing subprimes on people that couldn't afford them. Actually GWB was promoting low-income homeownership. The subprime snake oil salesmen were pushing it. The people who fell for it are guilty of not doing their homework and not sensing that something didn't smell right. The low to middle class people who were preyed on were both liberals and conservatives.

[TimmySlagle]

" The low to middle class people who were preyed on"

Stop right there. If a person isn't smart enough to realize they are signing a mortgage they cannot afford, they are not smart enough to have a mortgage.

And if there wasn't a Liberal push to get these people into mortgages, the "snake oil salesmen" wouldn't have had mortgages to sell them in the first place.

And as I said below, I'm not blaming either Party. I'm blaming Liberals. Despite popular criticism, President Bush wasn't always Conservative. He did many Liberal things. Like writing "No Child Left Behind" with Teddy Kennedy, addding the Prescription Drug Benefit to Medicare, and promoting low-income home ownership with Federal funds.

[dadw5boys]

BANKS OR INVESTMENT FIRMS DID WRITE THE LOANS!!!!!

PLEASE STEPP AWAY FROM THE KOOLAIDE.

[TimmySlagle]

Sure, but they wrote the loans knowing that there was plenty of Federal money to back up any defaults.

When I used the term "Banks" I meant banks in the traditional sense, institutions where investor capital is at risk.

Character limits here make it difficult to go into great detail. I sometimes rely on shorthands to keep my remarks compact.