“ These two entities — Fannie Mae and Freddie Mac — are not facing any kind of financial crisis,” said Representative Barney Frank of Massachusetts, the ranking Democrat on the Financial Services Committee. ”The more people exaggerate these problems, the more pressure there is on these companies, the less we will see in terms of affordable housing.
New Agency Proposed to Oversee Freddie Mac and Fannie Mae - New York Times - Sept 11, 2003
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“ From 2004 to 2006, [Fannie and Freddie] purchased $434 billion in securities backed by subprime loans, creating a market for more such lending.
Cafe Hayek: Krugman gets the facts wrong
“ Politicians wanted more home ownership than the market produces on its own, especially among low-income families. To encourage this politically popular goal, Fannie Mae and Freddie Mac were allowed to privatize their profits and socialize their losses. At the same time, HUD required them to expand their commitment to affordable housing. Freddie and Fannie achieved this goal by buying bundles of subprime mortgages.
Organic Market
“ The joint housing and mortgage-market crisis once again reminds us that all financial implosions stem from the same cause: borrowing short and lending long without enough equity to weather periodic storms in the gap between.
Some bubble - lots of interesting data in this link
“ this ought by rights to be a Democratic Party year across the board, from the White House to the Congress to the gubernatorial races. But there was a crucial energy leak, and it came from the very top.
Why is Obama so vapid, hesitant, and gutless? - By Christopher Hitchens - Slate Magazine
“ What’s good for GM or the financial sector is not necessarily what’s good for America. In fact what’s good for America, might be very, very bad for the financial sector.
Capitalists, Capitalism, and the Siren’s Song of Stability
“ There is simply huge amounts of cash ready to bottom fish in housing-related assets (we saw an estimate of $400 billion a couple of months ago). The issue is not lack of willing buyers; it’s that the prospective sellers are not willing to accept prices that reflect the weak and deteriorating prospects for housing.
Why You Should Hate the Treasury Bailout Proposal