Sunday, February 6, 2011

McClatchy with the must read on Fannie/Freddie

It's a great piece, but I think this needs to be put on T-shirts or something and maybe kill a zombie lie:

Q: What role did Wall Street play?
A: For most of their history, Fannie and Freddie performed their role without problems, helping home ownership grow and freeing up banks to lend more. In the late 1990's, Wall Street began aggressively pooling mortgages into bonds — called private-label mortgage-backed securities.

After 2001, these Wall Street firms focused heavily on subprime loans given to the least creditworthy borrowers. In 1999, 81 percent of new U.S. mortgages were securitized by Fannie and Freddie. By 2005 and 2006, the final years of the housing bubble and the period most characterized by the deep erosion of lending standards, Wall Street firms were securitizing two out of every three new U.S. mortgages.

Clearly Fannie and Freddie must be totally at fault for the housing meltdown.  Oh wait, also this:
Q: Didn't government requirements to lend to minorities and the poor fuel this subprime lending?
A: This is a narrative spun by some conservatives that is not grounded in fact. Beginning in 1992, Fannie and Freddie were directed to foster more lending to minorities by purchasing and securitizing these loans — when the loans met guidelines.
 Go, read, enjoy.


  1. You need more than T-shits to kill this zombie. I'd go for the kitchen sink of silver bullets, daggers in the heart, crucifixes, and Roundup (put a trademark on that for Monsanto). I had one of those eye-popping exchanges with someone who is supposed to work with securities on whether the CRA was at all responsible for the subprime housing disaster. Un-effin'-believable.
    5th comment on the page and ff

    My interlocutor for that exchange has since put me in his "killfile." I consider it a badge of honor.

    This is one I don't think can be killed. Even the Federal Reserve Bank hasn't been able to strangle/stab/bleed/suffocate it to death:

    Too many people finding it suits their preferences to believe otherwise.

  2. Ageed, just like FDR worsened the Great Depression (and I've even seen that he somehow caused it). It's a useful lie that won't die until its usefulness does.

    That said, that McClatchy straight up says conservatives aren't grounded in fact is progress. The real zombie lies are the ones the mainstream media picks up, like that Casey Sr. was denied a speaking slot at the 1992 because he's pro-life.

  3. Yeah. Mainstream media. Maybe it's a "Trochee[-like] Fixation."