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Thread: The Fannie Mae, Freddie Mac debacle explained

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    Friend of Gossip Rocks! buttmunch's Avatar
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    Default The Fannie Mae, Freddie Mac debacle explained

    It's a pretty long article but dispells many of the myths surrounding this whole thing so...


    Fannie Mae's Last Stand | vanityfair.com
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    Elite Member Grimmlok's Avatar
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    repost here, work has it blocked.
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    Elite Member MohandasKGanja's Avatar
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    That was a fascinating, complex article. Here was a part that I thought was a good summary:

    "But a few things are clear. One is that the argument that Fannie and Freddie caused our entire economic calamity is absurd. Yes, the volume of bad mortgages that Fannie and Freddie bought may have blown the bubble bigger than it otherwise would have been. But to put the blame entirely on Fannie and Freddie is to exempt all the other players, including the mortgage originators who sold subprime mortgages and Wall Street, which packaged up the bad mortgages and sold them to investors around the globe.


    Another thing that’s clear is that the critics were both right and very wrong about Fannie and Freddie. Yes, their executives and shareholders made fortunes in the glory years, and, yes, taxpayers are now bearing the brunt of whatever losses there are. Just as critics always warned, it’s “the privatization of profits and the socialization of risks.” But what the critics missed is that that wasn’t unique to Fannie and Freddie. It turns out our entire financial sector was operating under that same premise—and to a far greater degree than Fannie and Freddie."

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    Friend of Gossip Rocks! buttmunch's Avatar
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    repost here, work has it blocked.

    Not sure I can. It's really, really long. Can you try at home? Otherwise I'll give it a go. It's worth the read and is in the Obama edition of Vanity Fair, which is where I first read it.
    'Those who sacrifice liberty for security deserve neither.' Ben Franklin

    "When fascism comes to America, it will be wrapped in the flag and carrying the cross."
    --Sinclair Lewis

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