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Is this the same Barney Frank who, less than two years ago, was insisting that Fannie Mae and Freddie Mac were financially sound, completely solid, and then nothing bad was going on with them?
That Barney Frank?
Yep, that Barney Frank. Somehow, in left-wing la la land, not having a clue what the hell is going on equates to 'the most intelligent man in Congress' and 'a whiz with both fact and concept.'
Barney Frank: "I think this is a case where Freddie Mac and Fannie Mae are fundamentally sound. They're not in danger of going under. They're not the best investment these days from a long term standpoint going back. I think they are in good shape going forward. They're in the housing market. I do think their prospects going forward are very solid."
Digg - Barney Frank: Freddie Mac/Fannie Mae fundamentally sound (http://digg.com/business_finance/Barney_Frank_Freddie_Mac_Fannie_Mae_fundamentally_ sound - broken link)
The YouTube clip has been removed due to morbid embarrassment, ...er, I mean 'use violation.'
Yo! Barney! Here's anoddah one! (The fat cats can't help themselves!)
Former KB Home chairman is indicted in alleged backdating scheme - Los Angeles Times (http://www.latimes.com/business/la-fi-karatz6-2009mar06,0,6937523.story - broken link)
Citibank was sound, too. Countrywide was sound, too. Gimme a break.
Barney Frank is "Fannie Mae's Patron Saint" and has blocked reform and regulation to fix Fannie's and Freddie's problems for years.
"His record is close to perfect as a stalwart opponent of reforming the two companies, going back more than a decade. The first concerted push to rein in Fan and Fred in Congress came as far back as 1992, and Mr. Frank was right there, standing athwart. But things really picked up this decade, and Barney was there at every turn... In 2000, then-Rep. Richard Baker proposed a bill to reform Fannie and Freddie's oversight. Mr. Frank dismissed the idea, saying concerns about the two were "overblown" and that there was "no federal liability there whatsoever." Two years later, Mr. Frank was at it again. "I do not regard Fannie Mae and Freddie Mac as problems," he said in response to another reform push. And then: "I regard them as great assets." Great or not, we'll give Mr. Frank this: Their assets are now Uncle Sam's assets, even if those come along with $5.4 trillion in debt and other liabilities. Again in June 2003, the favorite of the Beltway press corps assured the public that "there is no federal guarantee" of Fan and Fred obligations. A month later, Freddie Mac's multibillion-dollar accounting scandal broke into the open. But Mr. Frank was sanguine. "I do not think we are facing any kind of a crisis," he said at the time." Fannie Mae's Patron Saint - WSJ.com
But, hey, Frank is supposedly 'the most intelligent man in Congress' and 'a whiz with both fact and concept.'
Barney Frank is "Fannie Mae's Patron Saint" and has blocked reform and regulation to fix Fannie's and Freddie's problems for years.
"His record is close to perfect as a stalwart opponent of reforming the two companies, going back more than a decade. The first concerted push to rein in Fan and Fred in Congress came as far back as 1992, and Mr. Frank was right there, standing athwart. But things really picked up this decade, and Barney was there at every turn... In 2000, then-Rep. Richard Baker proposed a bill to reform Fannie and Freddie's oversight. Mr. Frank dismissed the idea, saying concerns about the two were "overblown" and that there was "no federal liability there whatsoever." Two years later, Mr. Frank was at it again. "I do not regard Fannie Mae and Freddie Mac as problems," he said in response to another reform push. And then: "I regard them as great assets." Great or not, we'll give Mr. Frank this: Their assets are now Uncle Sam's assets, even if those come along with $5.4 trillion in debt and other liabilities. Again in June 2003, the favorite of the Beltway press corps assured the public that "there is no federal guarantee" of Fan and Fred obligations. A month later, Freddie Mac's multibillion-dollar accounting scandal broke into the open. But Mr. Frank was sanguine. "I do not think we are facing any kind of a crisis," he said at the time." Fannie Mae's Patron Saint - WSJ.com
But, hey, Frank is supposedly 'the most intelligent man in Congress' and 'a whiz with both fact and concept.'
You're not going to stop your fact-finding about Fannie Mae and the banking crisis at reading the WSJ are you? For example:
The Big Picture
//
The folks who want to place the entire crisis at FNM/FRE 's doorstep miss the point -- and let me hasten to add that I was never a fan of the company, and we were short FNM from over a year ago, at $42+ -- these people seem to miss all of the big picture issues, and are focsing on minor factor and outright irrelevancies. This was not a "social engineering" experiment, as the radical right has called it. This was extreme short sightedness.
...
Fannie has been around since 1938, Freddie since 1968, the CRA has been around since 1977 -- suddenly, all of housing goes to hell in 2005, and then credit collapses 2 years after -- and the best explanation some people can come up with is Fannie, Freddie and CRA? Gee, isn't that rather odd -- especially after 70 years?
Then there is the international issue: If Fannie and Freddie and the 1977 CRA (and amendments) are to blame for the US boom and bust, how did the rest of the world end up with a housing boom too? Why did prices and sales go skyward in the UK, France, Spain, Ireland, Australia, etc.? They had no CRA, or a Fannie Mae, or a Freddie Mac, -- so then what caused their housing boom?
The short answer: Ultra low rates, securitization, and perhaps some of our homegrown, innovative lending standards.
//
//If Fannie and Freddie and the 1977 CRA (and amendments) are to blame for the US boom and bust, how did the rest of the world end up with a housing boom too?//
it is probably easier to throw insults than to defend a policy where 9/10 homeowners are being financially punished for being responsible. they will have to pay their mortgage at a higher rate and a greater amount than their irresponsible counterparts. there is growing resentment towards these types of policies and i don't understand why more is not being done to address this resentment.
Did you know that about one-third of small businesses fail within two years, and more than half fail within four years? Did you know that with each failure, we take a stroll down the lane of business bankruptcy, wherein banks and other creditors are forced to eat losses that they then simply pass on to the rest of us who didn't fail at anything at all? And these tapped out tycoon-wannabes get to keep their expensive homes, their fancy cars...all of their personal assets, while we pick up the tab for the business debts they cannot or will not repay. Isn't that awful? Aren't you outraged?
Is this the same Barney Frank who, less than two years ago, was insisting that Fannie Mae and Freddie Mac were financially sound, completely solid, and then nothing bad was going on with them? That Barney Frank?
It was Wall Street that collapsed. The GSE's by comparison were in fabulous condition. While under-capitalized thanks in part to continual efforts by Republicans to wedge them out of market share, and while having been forced over the tail-end of the crisis buildup to take on some volume of garbage assets produced by a corrupted primary mortgage market, they were pulled back into federal status not because of anything resembling insolvency, but rather to lop off their shareholder obligations, allowing them to focus on public rather than private interests in a world in which the Wall Street side of the picture was about to be erased in all but its entirety.
Rep. Frank's actual comments did not go to extents you claim for them, but his statements concerning the financial situation of the GSE's were correct. It was the market around them that was coming apart at the seams, and the need to reorganize the GSE's to enable them to meet public needs in a newly-shattered environment was the major impetus for putting them into conservatorship. That is about as far as the old administartion could go. It will be up to the new one to do the heavy lifting on getting the GSE's repositioned to address their old mission under a new set of circumstances.
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