fkusumot on 30 September 2008
| Jackson50 said: I agree with him, but I find it unfortunate that he did not implicate the Federal Reserve. Yes, the government should be held responsible for creating the stupefying GSEs. They should also be held responsible for attempting to artificially increase home ownership. Why the government attempts to artificially increase home ownership is beyond me; this odd practice began when Hoover was Commerce Secretary. With that being said, the Fed’s managing (mismanaging, actually) of the money supply was the main cause of the housing bubble and subsequent financial crisis. |
Fannie and Freddie have been around for 70 years and 38 years, and now all of a sudden it's their problem? The government should be held accountable for trying to increase home ownership? That's about the same as saying the government should be held accountable for trying to increase employment.
Fannie and Freddie weren't allowed (by law) to do B-Paper business. They used the loophole of putting collaterized debt obligations and bonds on their books and that's what fucked them over. The article is junk economics, it does not put A and B together and leaves out C. It's about as informative as a article by Bruce on Gaming.
