Replies to post #649117 on Fannie Mae-No Politics (FNMA)

[Donotunderstand]

nope

simply wrong and disproved in all the post mortem studies

lots of hot air for "housing help"

not a lot done

look to the interest only mortgages !!!!! that were not explained and blew up in year 5 when it amortized (but by then Banks had sold them !!)

look to the 80 10 10 10 - which is an 80% mortgage and 10% mortgage and yup 10% strip mortgage- all made into bonds - and the 20% that should have been down payment equity was debt held by pensions and such ---- again - banks had sold the risk off

banks greedy
pensions and such looking for yield and yield and yield and not willing to understand the risk
rating agencies - PAID BY BOND ISSUERS - rating pure crap - and worse as AAA

that is known

the poor and loans to the poor never were more than 1 or 2 percent of the market --- outside say HUD which took care of its own

reality - one does not sink a multi trillion dollar market with a few loans to poor people - even if we wanted to do that - it would not happen - and for sure the BANKS would make the loans - make profit - package the paper - sell it - make profit - carry no risk - award bonuses and golden parachutes and then get true relief as in corporate welfare

days are gone - with the end of LBJ (who meant well) ---- when welfare queens and strange loans were more than a pimple or less on the massive economy

just think about it

[Pecker9Wood]

CDOs and CDSs are not new, they were just new to the MBS market. Congressional types understood the risks involved to allow those instruments in the MBS market and stopped it with the Fair Housing Act of 1939. Banks have longed for more in the MBS market. That hedge fund manager was paying attention when the law changed and both Warren Buffet and Allen Greenspan said mentioned these instruments and said if Fannie Mae and Freddie Mac where to ever go bankrupt it would be the end of our economy.
I can't remember if I read it or heard it but knowing these people said it became alerted to them but still didn't understand fully the impact it would have. That was in 1999. Allen also said the market is running with reckless exuberance. Also the rating agencies rated those package triple A+ even while everything was going into the crapper. Changed to crap over night when they came to the realization that they no longer could hide it.