I agree with you that those in the tea party movement need to deal with those within the movement who are ignorant, racists and uneducated. I would also think that the tea party movement needs to take seriously the concerns of the ‘racists’ while not agreeing with their racism. What I mean by that is most individuals who are group centered, in this case centered around their skin color , think and act out of fear. Sometimes those fears are legitimate but acted upon ignorantly i.e. a lot of people who are joining the racist right wing are out of work, see the government selling out to wall street and selling out main street but incorrectly assume that it has anything to do with color (blacks) or religion (jews). Its a self-referential loop as they surround themselves with like minded people and read like minded materials. So, many of their fears are legitimate but their understandings of those fears and means of acting on them are not.

Someone has to take the loss and we seemed to have decided that the original mortgage provider should be saved. Thus the need for the Treasury to fully backstop these companies as they lose money in the mortgage market by the boatload.

In most cases, the entity that originated the loan was off the hook within a year or two of selling the paper, it is the current holders of that loan and MBS, and related CDOs that were derived from that loan that stand to loose.

Some of these questionable MBS and CDOs originated with F&F, however, most of these pose less risk to the owner because they are not based on sub-prime loans because F&F for most of the bubble period were enjoined by regulations from issuing sub-prime loans.

My take on the unlimited credit given F&F, is that they intend to not only back-stop the potential losses to holders of MBS they themselves sold, but they are being used to back-stop losses to the big banks and investors holding securities sold by entities other than F&F.

Like I said, this looks like an under-the-table TARP II, not to mention covering up for the past crime of F&F management
?

Being a bit more liberal / progressive / whatever than average doesn’t mean that I immediately should need to label views that are different than mine disparagingly. Calling Bachmann or Palin a teabagger can be a bit of fun because of the not-so-subtle innuendo. Some of the people that think that government policies are corporatist or kleptocratist (new word I think) are looking at the same problems as people sometimes referred to as teabaggers. So long as the critics avoid racism and slander they shouldn’t be dismissed out-of-hand. Of course it would be nice if they acknowledged their own side’s culpability but that might be hoping for too much.

Everybody else in this thread understands that Fannie Mae doesn’t buy loans.

Since Fannie and Freddie currently are the dominate part of US mortgage market, their real power is not in buying blocks of questionable loans, that distinction goes to the Fed and the Treasury, but in providing a mechanism for moving loans of questionable quality onto their books. This works out the same as buying a loan from the previous lender and converting it to a new mortgage from Fannie or Freddie. The advantage to the previous mortgage holder is that they are made whole without an awkward renegotiation of the principle and they have more money to play with. Whether you think this is better than actually buying the loan and hold the original probably depends upon whether you stand to lose from the transaction.

Someone has to take the loss and we seemed to have decided that the original mortgage provider should be saved. Thus the need for the Treasury to fully backstop these companies as they lose money in the mortgage market by the boatload.

Yes, its funny, and yes, there are those involved in the tea party movement who are ignorant, silly and in some cases dangerous but to dismiss a whole movement of people who generally are concerned about the corporate state is a mistake.

Keep up the great work

Michael Ostrolenk

p.s. Your analysis is correct i.e. there are many institutions including the government which are to ‘blame’ for our current crisis and it is a mistake to limit our focus to any one entity and dismiss others which are also culpable for our troubles (including the Federal Reserve) We also need to look at our culture which does not support sustainability in any areas of our lives including finances.

Maxime Waters, Barney Franks and the congressional Progressive gang were at the forefront of using Fannie and Freddie to lower the threshold of underwriting for mortgages. And since Fannie and Freddie gave the AOK for lower credit standards and gave clearance to banks to help get the liabilitiy off their books, and underwrit, it was just a matter fo time untilt he greed coupled with government pseudo immunity took over….

20% minimum down payments, good credit as a necessity and the liek kept minority and poor homeownership low….and the percieved injustice of the lot of a renter by the Congressional Black Caucus and other progressive groups led to policy adjustments….you can follow the hearings from the 90′s through to 2007 showing them all thiking it unfair that the poor cannot partake in the housing price appreciation.

In countires with old fashioned banking standards for mortgages, you have high levels of renters too….maybe they should have not been so prejudiced agaisnt renting,a dn focused their energies on renter protection measures, rather than contribute to this bubble.

Clue: Everybody else in this thread understands that Fannie Mae doesn’t buy loans.

Of course what I should have said was most people in this thread understand that Fannie and Freddy did not cause this economic crisis by buying loans from poor people.

Fannie’s, and Freddy’s contribution to the mess comes principly from what they were selling, and what their managers were stealing by cooking the books.

This might be a good time to remind everyone that it looks as if Rahm Emanuel was one of those responsible for the cooked books.

Many things gov’t does would be characterized as criminal if it were done by a corp or individual. But, the gov’t also has a different rationale for it’s actions — the public good, for the long run.

Actually, the issues we’re discussing are the actions of corporations and individuals, in many cases they constitute crimes which are now being covered up with the collusion of our government.

This collusion represents the government’s abdication of it’s responsibility to promote the public good, for the long run, in favor of promoting the interests of a tiny minority who have demonstrated no interest in the public good.

Getting the bad mortgages out of banks lets them get on with lending and normal operations.

Getting the banks out of our pockets would let us get on with our lives and the pursuit of happiness

It amounts to paying off Wall Street’s gambling debts, not the people’s mortgages.

Sort of, yes. In a crisis such things can sometimes need to be done.

I’ve heard armed robbers use that same defense, they were facing a crisis, and were just trying to look after the needs of their families.

We’re going to end up paying tens-of-trillions of dollars, and recieve nothing in return,

I depends upon your sense of timing. If we keep the system afloat, but then tax them over time to recover the loot with some interest, then it doesn’t have to come out of the diapers of children. Of course, this depends upon Dems having the sense to tax those who received this largesse to recover the “loan”.

You’re saying that our children’s and grand-children’s futures are riding on the slim chance that the Democrats, if they’re sensible, could reverse the course of recent history with tax policy?

If, and when the Democrats come to their senses, you’ll be back here arguing that raising taxes on the bankers now would be a bad idea because it endangers the recovery by stifling job creation.

when we could have paid off every mortgage in the country for something like $4 trillion, which may well have saved our economy, but would never have been discussed because it sounds like socialism.

Where would that money have gone? Right into the pockets of the mortgage holders. That’s just as bad, if not worse (because of the politics of that McCainzian idea) than what’s going on now.

Funny, I thought that paying off my mortgage would free up money to be spent on life’s other necessities, like healthcare, my kid’s education, retirement, and of course the goods and services that keep the’ real’ economy going.

Who knew?

Better is to deal with fewer entities (banks v. 300M people) and tax them (they who deserve it) instead of making all the people angry by taxing them.

You know what, you’re right, if we’re going to give away $5 or $10 Trillion dollars of tax-payer money, it’s much easier to write a few thousand big checks, than a hundred million little ones.

I’m just guessing, but I think that the tax-payers will disagree.

Gotta focus on who created the mess and make them pay, not the innocents.

I totally agree, please feel free to start focusing any time you feel is right.

Some would have us privatize everthing, even after seeing what that has cost and caused.

Had Fanny and Fredie been a Government run utility we may not have had the housing crisis. If the loans they bought were scrutuinized by them, instead of Banks and Brokers, they would not have been buying the bad loans made by others.

You see Barny and buds were instrumental in all of this happening, and it may be fun to see Him flap His lips, but He should have been indicted for His part in it with all of His buds.

A government of elected people who cannot be held to account for what they vote for and the damage it causes is no way to run a democracy or any other form of government.

We also forget that both the housing and Banking crisis’s were allowed to happen by the actions of Congress, and now these are the people we are looking to to fix the problems. It has been a long time since both crisis’s broke, and they haven’t fixed the underlying problems that caused either. Could it be that the people that caused them are the same ones in those offices that would need to act to fix them?