The economy: Take a load off Fannie…

Posted: Monday, September 08, 2008 9:14 AM by Domenico Montanaro

The Washington Post: “The government seized control of Fannie Mae and Freddie Mac yesterday in a dramatic bid to restore faith in the embattled mortgage giants and arrest a vicious cycle that has driven the nation's economy into a steep downturn. Following weeks of round-the-clock planning, Treasury Secretary Henry M. Paulson Jr. announced the takeover to try to stabilize the deeply troubled housing and financial markets. Fannie Mae and Freddie Mac, with a combined 11,000 employees, have funded more than two-thirds of U.S. home loans in recent months, and doubts over their ability to continue doing so had threatened to immerse the economy into even more turmoil.”

More: “There is no guarantee that the takeover will work, and it comes at a potentially massive cost to taxpayers. The government has pledged to inject money in the companies in any quarter in which they would otherwise be insolvent -- up to $100 billion in total for each company.”

The New York Times adds, “The rescue package represents an extraordinary federal intervention in private enterprise. It could become one of the most expensive financial bailouts in American history, though it will not involve any immediate taxpayer loans or investments.”

Looking at the politics… “The initial reaction to the plan was mostly positive. Senator John McCain, the Republican nominee for president, said on CBS’s ‘Face the Nation’ on Sunday that he supported the Treasury move, but he also implicitly criticized the Bush administration’s oversight.”

“Senator Joseph R. Biden Jr., the Democratic nominee for vice president, said on NBC’s ‘Meet the Press’ Sunday that he had spoken to Mr. Paulson on Saturday night, and that he thought the plan had a good chance of succeeding. ‘It’s not an official reorganization. It will be left to the next administration and the Congress to make those judgments,’ Mr. Biden said.”

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Comments

Isn't it ironic that "Petty Partisan Politician" McCain is now whining for the partisan political rancor to stop? After wasting 3 days on nothing but petty partisan poltical rancor coming from the RNC Freak Show the hypocrite now wants the Democrats to stop pointing out the inconvenient truths that the repugnant ones fear most.

I see that "Sinner" Sarah has something in common with "Embezzler" Cindy McCain, yes Embezzlement. While the ancient barbie stole from her own foundation, ""Embezzler" Palin has stolen our federal tax dollars and refuses to return them. Reuters has reported that while the Bridge to Nowhere project was cancelled the federal money was sent to Alaska but has never been returned. Time for "Embezzler" Palin to confess her sins about what she did with our money and to return it posthaste.

Hey how about "Sinner" Sarah's Pipeline to Nowhere? She dishonestly claims credit for this project that was started in the 1970's, has no funding and has had nothing done on it. Just another lie that "Sinner" Sarah will pay for on her Judgment Day, November 4th.

Go Obama/Biden 08/12!

Eric, Salinas, CA (Sent Monday, September 08, 2008 9:22 AM)

Bush: Is gas going to $4.00 a gallon, where did you here that from, I haven't heard it?

McCain: I think the people (Homeowners) are at fault, I don't think there should be a bailout fro them.

Republicans: They are (the people) are a bunch of whiners.....

Americans: In November, we are going to show you who the whiners are!!!!

The Real Truth!!! (Sent Monday, September 08, 2008 9:22 AM)

Will the CEOs stil make over 10 million yearly?

Seattle Sue (Sent Monday, September 08, 2008 9:29 AM)

no one cares about this

The American Idiot voter (Sent Monday, September 08, 2008 9:31 AM)

We can all blame the repugnant ones for wrecking our banking industry with their clueless banking deregulation. Now the middle and poor classes will pay for the rich and greedy getting richer and greedier as our taxpayer dollars are wasted bailing out Freddie Mac and Fannie Mae. Heck of a job "Big Bank" Johnny and his lobbyist flunky Phil Gramm.

Having historically record low interest rates for the past 8 years is the surest sign of an economy that is not fundamentally sound.

We can't afford another 4 years of wrong economic policies. We can't afford to find out what industry the repugnant ones will deregulate next so that a few can get filthy stinking rich while the rest of us pay the consequences.

Only Obama/Biden will fix the broken economy that "Warmonger" Bush and his flunky "Dunce" McCain have broken.

Go Obama/Biden 08/12!

Eric, Salinas, CA (Sent Monday, September 08, 2008 9:32 AM)

oil profits should not pay for this like Sarah would purpose...

Gasoline going up...ask Sarah

BJ, CA (Sent Monday, September 08, 2008 9:37 AM)

I hope the Independents are watching and thinking. Is it not funny that McPOW could not pick his own VP. Is it also not funny that earlier in the campaign that it was noted that McPOW did not speak for the campaign. McPOW is being used by the republican party as a frontman and the Executive Branch of the government will be ran from behind the scenes by the Neocons that have been running the Bush administration for the last 8 years.

President or Puppet (Sent Monday, September 08, 2008 9:47 AM)

I love it---Bush trashes the economy to the extent that Freddie and Fanie get caught in the sh**-storm, so we now need to nearly double the deficit to bail these entities, which were a good idea originally, but now are hopelessly mired and corrupt. Most of its investors are now screwed out of their money, but is China taking a hit along with domestic investors> Anyone know? Was that question answered. If China is let off the hook, we know for sure who holds all our debts.
Way to go, Dumbya!! And what solutions is Mccain offering? I'll bet Obama the Wonk with the golden tongue has already started working on somehting.

Class Warrior, D.C. (Sent Monday, September 08, 2008 9:49 AM)

http://www.twocanpete.blogspot.com/
The failure of Freddie and Fannie are just two more examples of incompetent management by G.W. Bush. Also, posted the Palin Letter is a must read!

twocanepte (Sent Monday, September 08, 2008 9:54 AM)

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

Get ready people, fascism is coming. George W. Bush laid the groundwork, and McCain/Palin will enforce it.

Mrs. Cruel Intentions. She's just more of the same Republicon slime and McCain has been turned into a puppet in his ambition quest to out do his father/grandfather.

I'm going to up my monthly donation after seeing that pathetic pack of lies and cheap personal attacks. Figure $100 tonight when I can get a secure connection (work's firewall stops it), and up it later this month.

https://donate.barackobama.com/page/contribute/pf?outreach_page_id=45154

Those that can't donate money, please donate your time. Tell all your friends, email buddies, neighbors and family the truth. Educate them. Register them, and get them to vote!

BL, Cincinnati OH (Sent Monday, September 08, 2008 10:00 AM)

John 'I don't know as much about the economy as I should' McCain has the nerve to criticize Bush's oversight?

I'm sorry, whose economic policy author was it that pushed for deregulation of these banks? C'mon John, you remember, he called us a 'nation of whiners'. OH YEAH, it was your, Phil Gramm.

http://www.rodneyhopper.com

Rodney Hopper, Waxahachie, TX (Sent Monday, September 08, 2008 10:05 AM)

Um, Eric, FAnnie and Freddie were sent out on a limb by the CLINTON administration. He was concerned about so-called 'red-lining'; a process of evaluation of risk that banks took and led them to avoid making loans to high risk borrowers, (who were mostly poor and/or minorities), particularly in urban areas. By GOVERNMENT MANDATE, the Clinton administration demanded that a certain portion of mortgage paper be written for those borrowers in those areas. Therefore, entities sprang up to write this paper, in a classic 'high-risk-high-reward' scenario. The interst rates on these notes were high, reflecting the credit-worthiness of the borrowers, and the lack of invested interest(down payments) on the properties.

It was only a question of time before there were enough people exploiting the system, coupled with enough defaults due to the 'real estate bubble' bursting, to create the problem we have now.

It is important to notice that most of the properties in default are in three states, and that the defaulters 'own' multiple properties. In other words, you average joe is not losing his house, but your average real estate speculator IS losing property. and the banks are losing money.

Again, none of this would have happened if the government had not attempted to "help" people. Unfortunately, you cannot convince most politicians to study enough history to learn this. Nor enough voters, it seems.

Read a BOOK, Lincroft, NJ (Sent Monday, September 08, 2008 10:14 AM)

Ha, I guess Paulsen knew it wouldn't do any good to even try to brief the woefully unqualified rep vp nominee.

Kate, Atlanta (Sent Monday, September 08, 2008 10:18 AM)

Get over your love affair with Palin press. Stop pushing her down the throats of the American public. I expect you to do more investigative pieces like her extreme religious views where she has been known to talk in tongues and shake and fall down violently at her pentecostal church. I expect that you will do red meat stories like her pork barrell earmarks, the deficit she left when she was mayor, and her statements recently about not knowing what Freddie and Fannie Mae even were. Get over yourselves. Stop drowning out the only voices of truth like Olbermann. The GOP is full of lies, lies, and hateful lies. If you don't start exposing their talking points as lies, you do yourselves and the American public a huge disserve. You therefore becomes liars yourselves.

American Voter (Sent Monday, September 08, 2008 10:26 AM)

Thank you Clinton Cronies. Another case of Bush failing to clean house, and trusting democrats to not act like criminals.

Dave, Tn (Sent Monday, September 08, 2008 10:30 AM)

The Real Truth!!!

[Bush: Is gas going to $4.00 a gallon, where did you here that from, I haven't heard it?]

Pelosi schedule that vote on domestic drilling yet?

[McCain: I think the people (Homeowners) are at fault, I don't think there should be a bailout fro them. ]

If you take out a loan, you, and you alone are responsible for paying it off.

[Republicans: They are (the people) are a bunch of whiners..... ]

Mis-spell. That should be "winners".

[Americans: In November, we are going to show you who the whiners are!!!! ]

We know it already. It's Obama and the Democrats.

[The Real Truth!!! (Sent Monday, September 08, 2008 9:22 AM)]

Nothing real about you.

Greg Yost, Evergreen Park, PA (Sent Monday, September 08, 2008 10:54 AM)

Way to go, Dumbya!! And what solutions is Mccain offering? I'll bet Obama the Wonk with the golden tongue has already started working on somehting.

Class Warrior, D.C. (Sent Monday, September 08, 2008 9:49 AM)
\----------------------------\

If Obama solves this problem, it will be the first problem ever that he solved.

McCain is the Solution (Sent Monday, September 08, 2008 10:56 AM)

This is a joke...this is the change that McCain/Palin talk about...THE TAXPAYERS WILL PAY FOR THE GREEDY...

Bush is jump starting the change for McCain and Palin...

Eloise "Family First", Clearwater, FL (Sent Monday, September 08, 2008 11:04 AM)

So we as a nation are forced yet again to SOCIALIZE the losses for our financial institutions. Why is it that the GOP fails to acknowledge this simple fact, yet they constantly try to brand Democrats as Socialists?

Suburban Mom paying attention, IL (Sent Monday, September 08, 2008 11:12 AM)

Quite frankly, it would be irresponsible and dangerous for the American people to elect another Republican into office. Why should we elect the same people into office who have nearly broken our economy, were wreckless in their rush to invade Iraq, creating enviroment that has made us less safe internationally and at home, let lobbyists run this country into the ground and now our children and grandchildren will have to pick up the tab for their wreckless ineptitude? They broke it but don't have a clue on how to fix it!! For six of the last 7+ years Bush/Cheney, along with a Republican lead Congress, have passed bill after bill that with no oversight, no accountability, no transparency, which has created the massive problems we are facing today! Incredibly, they feel they are entitled to four more years! McCain and Palin haven't got one new idea or plan except to continue the same disasterous Bush policies.

Heather, WA (Sent Monday, September 08, 2008 11:14 AM)

And the polls have McCain and Obama running neck and neck. How can people even consider voting for the GOP party again? This country will not be able to survive another four years of GOP rule.

lu, Las Vegas, Nevada (Sent Monday, September 08, 2008 11:19 AM)

Americans: In November, we are going to show you who the whiners are!!!!

The Real Truth!!!
From your mouth to God's ears, but I have to say I am really scared again. My son keeps telling me to keep the faith, but after watching George Bush get elected not once, but TWICE, I really don't have too much faith left in the American public. It boggles my mind that the polls are so close, when 80% of America says we are going in the wrong direction, and not only has McCain voted 90% of the time with Bush, but he also has the Bush people, including Rove, running his campaign as well as lobbyists. The oil companies even support him. Why are the American people so dense???? Why would women even consider Palin with her radical religious right views and taking away women's right to choose even in cases of rape? Why would women vote for McCain when he voted AGAINST equal pay for women? Why would the military support McCain in any way, when he voted AGAINST giving free college to veterans? How about the way McCain treated the MIA/POW family members? Half of what Palin has said is false, and no one is really calling her on it. They're (the media) too busy celebrating her "celebrity status" while they were questioning Obama's a short time ago? Every time Palin speaks she says the same exact things she said at her speech. Doesn't she know anything else? If Obama did that, the media would be all over him. I hope to God the youth get out and vote!

New Independent (Sent Monday, September 08, 2008 11:30 AM)

I cant wait until McCain is our next president. Im sick of hearing selfish pro-choice feminists speak. Go away already and go back to being good women and mothers. No one that calls themselves a Christian should be voting for a pro-choice president. Only the others are expected.

jill, NJ (Sent Monday, September 08, 2008 12:08 PM)

Check out the extreme practices of Palin's church and the fact that the pastor tells them to vote for the "right ones" or they will go to hell. Check out that people who know negative things are VERY afraid to talk because of her vindictive nature and history. Check out that most of what she has said isn't quite what and how she said it was. Her extremist religious views are over the top and her abuse of power is disturbing. This could be WORSE THAN BUSH.

Becky (Sent Monday, September 08, 2008 12:32 PM)

How much of this could be attributable to Phil
GRAMM and his cronies' penchant for dereg., lack of any oversight? How many of the lobbyists working for the McCain Campaign lobbied for bank and finance deregulatiion over the last 8 years or more?
If there are ties, and this is the CHANGE Sen. McCain is talking about? Thanks, but no thanks!

Deborah Greenlawn, NY (Sent Monday, September 08, 2008 12:38 PM)

Palin makes her first gaffe. Doesn't even know what Fannie and Freddie do.
John Aravosis (DC) · 9/08/2008 12:14:00 PM ET · Link
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To be fair, I understand her crash "Economics 101" course isn't until Thursday. More from Huff Post:
Gov. Sarah Palin made her first potentially major gaffe during her time on the national scene while discussing the developments of the perilous housing market this past weekend.

Speaking before voters in Colorado Springs, the Republican vice presidential nominee claimed that lending giants Fannie Mae and Freddie Mac had "gotten too big and too expensive to the taxpayers." The companies, as McClatchy reported, "aren't taxpayer funded but operate as private companies. The takeover may result in a taxpayer bailout during reorganization."

Economists and analysts pounced on the misstatement, saying it demonstrated a lack of understanding about one of the key economic issues likely to face the next administration.
People are so mean to her. Can't they just ask her about snowmobiling and being Miss Congeniality and stuff? (Oh, that's right, she lied about being Miss Congeniality too. Facts are mean.)

DAV, Miami, FL (Sent Monday, September 08, 2008 1:04 PM)

If McCain gets elected he will chop Fannie Mae and Freddie Mac into a bunch of small private institutions so Dick Cheny and all the fat cats can invest in them, take the profits, then when they start losing call in the tax payers for relief. Same thing that just happened. Wake up folks. Rich get richer in all aspects with McCain. Now that he has the Queen Of Pork on the ticket he thinks the voters will not see the truth.

Elmer (Sent Monday, September 08, 2008 1:54 PM)

Sarah Palin commented that "lending giants Fannie Mae and Freddie Mac had "gotten too big and too expensive to the taxpayers". Aren't these private companies that are supported by the government - not owned by the government. Is there any discussion on these comments.

Jan Westmeyer. Perrysburg, OH (Sent Monday, September 08, 2008 2:33 PM)

The Republicans have cost this country billions with their lack of oversight of the financial sector. The FANNIE MAE and FREDDIE MAC,Bear Stearns, and Indy Mac bailouts should not be foisted on the taxpayers. Where is the free markert mentality now? Why should taxpayers bail out the credit markets to this extent? Because it's good for the country? It would be good for the country if people involved in the massive fraud went to prison.

Republicans rant and rave about taxpayers spending but the last eight years have slaughtered the USA credit standing in the international community and mortgaged the future of every man, woman and child living in the USA for generations. The Republicans have been in bed with the financial institutions for too long and made this problem with their negligence. Republicans are the worst money managers in history.

There should be serious consequences for those that were paid millions to oversee FANNIE MAE and FREDDIE MAC: That means all money and assets paid to those responsible should be confiscated.

We send drug dealers to prison for pushing bad vices on people. We send them to prison and confiscate money, property and all assets purchased with money made from selling drugs. The same applies here: Financial institutions pushed bad loans on people and knew at the time what they were doing was wrong. Ill-gotten gains should be confiscated and many people need to go to prison. It's not like they didn't know exactly what they were doing.

Portland, OR (Sent Monday, September 08, 2008 2:34 PM)

Wow, I had to read this again just to be sure. First Read - When you mentioned the political reaction to the Fannie Mae, Freddie Mac take-over, you made absolutely NO mention of Sarah Palin's major mistake regarding this!!! Why not? If Obama had said it, that would have been the title of this piece, but you don't even mention it when it's Palin and Americans are already questioning her readiness!!

New Independent (Sent Monday, September 08, 2008 3:28 PM)

GAFFE ALERT!!
Where is the GAFFE from Palin about fannie mae...
and she htought it was a government ru program??
Let's see you write word for word what McCain says aobut the old as the hills "bitter" comment. An being from PA...why is it that WE knew what Obama meant to say...but McCain can't? B/c McCain is an elitist!!
You write about Palin attack Obama on Iraq...
and Headlines...Obama regrets abortion comment.
But NOTHING..NADA on Palins GAFFE on FAnnie Mae!!
THe big bad press is cowering to McCain, just like you cowered to BUSH TO GET US INTO THIS WAR!!
You bunch of COWARDS!!
WE HAVE NO FREE PRESS!!!
we ONLY HAVE KEITH...
and now RACHEL, who have the BACKBONE to SPEAK THE TRUTH and ASK TOUGH QUESTIONS!!
GOOD LUCK TONIGHT RACHEL..WE WILL BE WATCHING!!

coninPA (Sent Monday, September 08, 2008 3:41 PM)

Where are the reports on Palin's humongous gaffe on Fannie Mae and Freddie Mac? I guess you're going to ignore it the way you ignored all of McCain's gaffes (Sunni anyone?). If Obama had made a remark suggesting that Fannie and Freddie were taxpayer funded (when they aren't), there would be reports all over the website by now.

JB, Memphis TN (Sent Monday, September 08, 2008 4:24 PM)

Fannie and Freddie in trouble...Then, we definitely are in a jam. McCain and Palin ticket means four more years of a lot more people being homeless. Our economy is shot to Hades. Our children and their children have no future from what I'm being told because it has been used up. The rich is getting richer and the poor is getting poorer. Good-bye middle class America. Hello to waking up to living with war for the rest of our lives if we get four more years of BusCain.

LadyAce2008 (Sent Monday, September 08, 2008 4:34 PM)

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