FFS Fenton, you are the one mixing up units......and......you still cannot cite your sources for the numbers.
So again, if you want to debate, GET A HANDLE ON YOUR NUMBERS AND PRODUCE SOME LINKS.
Ok, traffic's hell in the busy busy city of Houston so it took a while to access my PC. Anyway I'll post a few links and you can go from there.
http://fcic-static.law.stanford.edu/cdn_media/fcic-reports/fcic_final_report_wallison_dissent.pdf
" What was banks' role? It wasn't until 2002 that Wall Street issued over $100 billion in securities backed by subprime or other weak loans. Recall that by this date, the GSEs had bought over a $1 trillion. The banks' number grew so that, by 2008, there were 7.8 million low quality mortgages backing bank-issued securities — less than 30% of the 27 million."
RealClearMarkets - How Fannie, Freddie and Politicians Caused the Crisis
" In 1994 Johnson vowed to "transform the housing finance system" and "provide $1 trillion in targeted [affordable housing] financing." This was followed in 1995 by the Clinton administration's National Homeownership Strategy with a goal of greatly expanded home ownership. President Bill Clinton, when announcing the strategy said it would "not cost the taxpayers one extra cent." At the same time, the Community Reinvestment Act (CRA) was expanded and HUD announced its "Best Practices Initiative" with Countrywide as its leading acolyte. The central tenets of all these policies were the elimination of down payments, the use of "flexible and innovative underwriting" and "administer(ing) a review process for loan applications to ensure that all applicants have every opportunity to qualify for a mortgage" - all undertaken in an effort to greatly expand home ownership. "
http://www.huduser.org/periodicals/cityscpe/vol11num3/ch11.pdf
The troubles in the mortgage finance market exposed large risks the GSEs had undertaken
and increased concerns related to their safety and soundness. In 2007, both GSEs reported net
income losses, the first ever for Freddie Mac. Losses continued to mount for the GSEs in the first
half of 2008. Their core capital eroded and FHFA moved to place Fannie Mae and Freddie Mac
in conservatorship on September 7, 2008. The Treasury Department began to exercise its GSE
assistance authorities to restore the GSEs’ solvency.
Federal conservatorship has allowed the GSEs to maintain, and even expand, their presence in the
secondary mortgage market. Their combined share of single-family mortgage purchases peaked at
81 percent in the second quarter of 2008 and stood at 73 percent for 2008 as a whole.
The Last Trillion-Dollar Commitment - Economics - AEI
"In 1994, Fannie Mae replaced its initial $10 billion program with a $1 trillion affordable housing initiative, and both Fannie and Freddie announced new $2 trillion initiatives in 2001.[7] It is not clear to what extent the investments made in support of these commitments were losers--the GSEs' profitability over many years could cover a multitude of sins--but it is now certain that the enormous losses associated with the risky housing investments appearing on Fannie and Freddie's balance sheet today reflect major and imprudent investments in support of affordable housing between 2005 and 2007--investments that ultimately brought about the collapse of Fannie and Freddie."
Here's a great rebuttal to Krugmans and your assertion that Fannie and Freddie bought only low risk loans that conformed to the highest of standards.....:roll:
http://www.nytimes.com/2008/07/14/opinion/14krugman.html?_r=0
Krugmans, ( the frumpy cat lady in a lunatic mans frumpy body ) defense of the two corrupt GSE's follows....... " Fannie and Freddie had nothing to do with the explosion of high-risk lending. . . . In fact, Fannie and Freddie, after growing rapidly in the 1990s, largely faded from the scene during the height of the housing bubble. . . . Partly that's because regulators, responding to accounting scandals at the companies, placed temporary restraints on both Fannie and Freddie that curtailed their lending just as housing prices were really taking off. Also, they didn't do any subprime lending, because they can't . . . by law. . . . So whatever bad incentives the implicit federal guarantee creates have been offset by the fact that Fannie and Freddie were and are tightly regulated with regard to the risks they can take. You could say that the Fannie-Freddie experience shows that regulation works."
Many Are the Errors — The American Magazine
" Here Krugman demonstrates confusion about the law (which did not prohibit subprime lending by the GSEs), misunderstands the regulatory regime under which they operated (which did not have the capacity to control their risk-taking), and mismeasures their actual subprime exposures (which he wrongly states were zero). There is probably more to this than lazy reporting by Krugman; the GSE propaganda machine purposefully misled people into believing that it was keeping risk low and operating under an adequate prudential regulatory regime.
One of the sources of Krugman's confusion may have been Fannie and Freddie's strange accounting conventions relating to subprime loans.
There are many defi-nitions of a subprime loan, but the definition used by U.S. bank regulators is any loan to a borrower with damaged credit, including such objective criteria as a FICO credit score lower than 660."
The Last Trillion-Dollar Commitment - Economics - AEI
"
In their public reports, the GSEs use their own definitions, which purposely and significantly understate their commitment to subprime loans--the mortgages with the most political freight. For example, they disclose the principal amount of loans with FICO scores of less than 620, leaving the reader to guess how many loans fall into the category of subprime because they have FICO scores of less than 660. In i
In these reports, too, Alt-A loans--which include loans with little or no income or other documentation and other deficiencies--are differentiated from subprime loans, again reducing the size of the apparent GSE commitment to the subprime category. These distinctions, however, are not very important from the perspective of realized losses in the subprime and Alt-A categories; loss rates are quite similar for both, even though they are labeled differently. "
They finally tell the truth but alas, it's too late.
You want more links or what ?
