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October 8, 2008
The Fanny Mae and Freddie Mac Debacle
Source: Cato Institute
Zimbabwe Inflation at 2 Trillion Percent
Mi Casa es tu Casa --to pay for
Remember that Fannie Mae and Freddie Mac are GSEs (Government Sponsored Entities).
When watching these videos, ask yourself if the financial problems with our "casas" are due to:
After watching the first video, do you believe our problem to be a "black vs white" problem, or a "gay vs straight" problem?
OK, the last paragraph was a low cut. Both Frank Raines and Barney Frank are fine upstanding Franks!
Rep. Christopher Shays (R-Connecticut) points out in this video, that these two GSEs were exempt from the honest accounting and reporting practices implemented after the accounting scandal of Enron and Arthur Anderson with Sarbanes-Oxley. Getting rid of the honesty of "Mark to Market" regulations may have helped Lehman Brothers or AIG, but it would not have helped to have prevented this GSE scandal. Remember, Lehman Brothers was brought down by the improper accounting practices and corruption of GSEs Freddie Mac and Freddie Mae, as approved, bribed or demanded by Congress, not the other way around.
Watching this second video, you cannot help from walking away not feeling that this financial crisis was organized and planned to happen. What banker in the real work would issue 100% loans and adjustable rate mortgages to 92% of his worst credit risks? Ordinarily, he would be fired or imprisoned for giving the same loan to his least risky customer -- you.
The CRA (Community Reinvestment Act) caused home prices to soar, causing a bubble of over-priced homes.
Then the ARMs adjusted upward with higher mortgage bills and the price of gasoline started to rise. These cash-strapped low mortgage homeowners started defaulting on their mortgages.
The rest is history.
Banks stopped lending money and foreclosures started stacking up. The over-inflated prices started returning to normal levels and the sub-prime industry was imploding, taking everyone along with it.
And, the government was on the hook because it backed the GSEs doing the sub-prime lending.
Hence, you the tax-payer are on the hook.
The most sickening part that is played here is that Obama comes away squeaky clean and runs as an agent of "change". Not that I like McCain, mind you. I will take Ron Paul any day.
But there is no doubt -- more of the same is upon us.
At this time, I have no "smoking gun" proof showing the Sadducees to be directly involved or to show exactly what their motives are. Time usually shows what the Pharisees are after. Global currency, global union, civil war to get us there, whatever.
Perhaps, America will have the