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Bloomberg: Don’t Blame Banks for Mortgage Crisis


Did Congress cause the mortgage crisis by mandating loans to poor people? No.

Repeating History


Looks like Reps. Barney Frank and Anthony Weiner want both Fannie Mae and Freddie Mac to loosen lending standards for condos. Two U.S. Democratic lawmakers want Fannie Mae and Freddie Mac to relax recently tightened standards for mortgages on new condominiums, saying they could threaten the viability of some developments and slow the housing-market recovery, […]

Fannie Wants More Tax Dollars


Fannie Mae has gone back the U.S. Treasury with its hand out asking for another $19 billion. Fannie Mae has been operating under government conservatorship since September. It says its net loss in the first quarter were $23.2 billion, or $4.09 a share. The larger-than-expected loss has driven the company’s net worth below zero and […]

Quotes of the Day: Congress Edition


“As bad a precedent as the AIG bill is, there is one positive. Congress has established the principle that $165 million is not too inconsequential a sum as to require strict budget hawkishness. I can’t wait to apply that standard during the next earmark fight.” – Bob Krumm “I was thinking: How about imposing a […]

Fannie Mae Retention Bonuses A-Okay


(Note: the title is sarcastic.) Flying rather low on the radar, somewhat surprisingly, are the retention bonuses for Fannie Mae. Fannie Mae, which suffered $59 billion in losses last year, has requested $15 billion in taxpayer assistance and has said it expects to need plenty more. Chief Operating Officer Michael Williams is in line for […]

‘Chicago Machine’ Ad


The latest McCain ad gets a little dirty, trying to tie Barack Obama to “the corrupt Chicago political machine.” John McCormick provides the transcript: Announcer: Barack Obama. Born of the corrupt Chicago political machine. Obama: In terms of my toughness, look first of all, I come from Chicago. Announcer: His economic adviser, William Daley. Lobbyist. […]

Are All Anti-Obama Ads Racist?


A concern that I’ve expressed since the days of the primary campaign is that, because Barack Obama looks black, virtually any criticism lodged against him can be seen in racial terms.  (The same was true of gender in any attacks against Hillary Clinton.)   The latest example is the bold proclamation from TIME’s Karen Tumulty: “McCain […]

Financial Crisis and Moral Hazard

Moral Hazard Cartoon

Lance Paddock, in his best Mr. Rogers imitation, asks, “Can you say moral hazard?” Unfortunately, the notion of “too big to fail” means that those who behave badly often keep the benefits when things go well but pass off the negative consequences of failure. UPDATE: Via Greg Ransom, I see that Cato’s Gerald Driscoll has […]

The ‘Too Big to Fail’ Problem


Now that Freddie Mac and Fannie Mae have joined the “too big to fail” club, isn’t it high time we started thinking about how to avoid allowing companies and other quasi-private agencies to get into these problems in the first place? It seems that over the past few decades, the Federal government has pretty much […]

Fannie Mae and Freddie Mac Bailout Debacle

Freddie Mac and Fannie Mae Logo

The widespread rumors of a government bailout of Fannie Mae and Freddie Mac have already had dramatic consequences, perhaps creating a self-fulfilling prophecy. Iain Dey and Dominic Rushe, writing for The Times of London, note that, “The two companies lost almost half their market value last week as rumours of a government bail-out swept the […]

Should You Worry About Sub-Prime Mortgages?


The housing market really isn’t my thing, but James Hamilton does have a pretty good post that looks at a potential problem with sub-prime loans. Still, you are interested in such things, head on over and check out that post. Here is the main conclusion, The ultimate discipline, then, must come from these final holders […]