All Posts Tagged With: "Fannie Mae"

Blowing Bubbles: Getting Ready for the Next Bust

Imagine you are a private in the army. Your sergeant orders you to dig a hole. When you finish, the sergeant is horrified to find that you have dug a hole. He dresses you down and then orders you to dig another hole. Insane? Welcome to today’s world of American banking. Over the course of [...]

4Jan2012 | Richard W. Fulmer | 16 comments | Continued

Freefall: America, Free Markets, and the Sinking of the World Economy

In 2001 Joseph Stiglitz was co-recipient of the Nobel Prize in economics, a fact prominently noted on the dust jacket of Freefall, his book on the financial crisis. In 2002 Stiglitz and two coauthors produced a report, commissioned and published by the government-sponsored housing agency Fannie Mae, stating that the risk of a failure by [...]

4Jan2012 | Lawrence H. White | 2 comments | Continued

Crisis Economics: A Crash Course in the Future of Finance

Nouriel Roubini and Stephen Mihm’s book on the great subprime crisis gets off to a good start by dismissing as a red herring the “tired” argument attributing the boom to “greed” and focusing instead on “changes in the structure of incentives . . . that channeled greed in new and dangerous directions.” These included programs [...]

30Nov2011 | George A. Selgin | 2 comments | Continued

It Takes a Government to Inflate a Housing Bubble

If you want to fully appreciate government’s responsibility for the housing bubble and ensuing financial meltdown, see this article by Peter Wallison. Choice quote: Beginning in 1992, the government required Fannie Mae and Freddie Mac to direct a substantial portion of their mortgage financing to borrowers who were at or below the median income in [...]

12Oct2011 | Sheldon Richman | 1 comment | Continued

Financial Regulation Snake Oil

Recent turmoil set off by the threat of Greek insolvency shows how fast markets change. Fear about the inability of European governments to pay their debts caused the 2010 turbulence. By contrast, the 2008–2009 havoc was rooted in the collapse of property values. The next crisis will be about something else, possibly another government’s debt. [...]

25Aug2010 | Chidem Kurdas | 1 comment | Continued

Now This Is News

From the Wall Street Journal (subscription site): Barney Frank has been all over the airwaves this week with a clear and—we never thought we’d say this—perfectly sound message about Fannie Mae and Freddie Mac: “They should be abolished.” Considering that Frank has been one of the principal backers and beneficiaries of the so-called government-sponsored enterprises, [...]

19Aug2010 | Sheldon Richman | 4 comments | Continued

Legends of the Fall: The Real and Imagined Sources of Our Bubble Economy

Preface The Foundation for Economic Education is pleased to announce that Richard W. Fulmer of Humble, Texas, is the winner of the second annual Eugene S. Thorpe writing competition. Mr. Fulmer holds a bachelor’s degree in mechanical engineering from New Mexico State University and for over 20 years has worked as a systems analyst in [...]

24Mar2010 | Richard W. Fulmer | 13 comments | Continued

Stop Insuring Mortgages

The Federal Housing Administration (FHA) announced last December that it wants tougher rules on mortgage lenders. Maybe FHA got spooked by a New York Times story in November titled “Easy Loans to Wealthier Areas,” which said: “In its efforts to prop up a shattered housing market, the government is greatly extending its traditional support of [...]

24Feb2010 | John Stossel | 4 comments | Continued

Fan and Fred Lied, Too!

Has anyone any doubts about the federal government’s role in the housing and financial debacle? From Peter Wallison’s latest in the Wall Street Journal: New research by Edward Pinto, a former chief credit officer for Fannie Mae and a housing expert, has found that from the time Fannie and Freddie began buying risky loans as [...]

30Dec2009 | Sheldon Richman | 0 comments | Continued

More Fun with Fannie and Freddie

From today’s Wall Street Journal editorial page: Back when the housing mania was taking off, Massachusetts Congressman Barney Frank famously said he wanted Fannie Mae and Freddie Mac to “roll the dice” in the name of affordable housing. That didn’t turn out so well, but Mr. Frank has since only accumulated more power. And now [...]

24Jun2009 | Sheldon Richman | 0 comments | Continued

Who Watches Our Guardians?

Predictably, the leading inquisitors into the causes of the financial turmoil are themselves among the most culpable: Rep. Barney Frank, Sen. Chris Dodd, and New York Attorney General Andrew Cuomo. AIG got into trouble because it in effect wrote insurance policies (credit default swaps) against the failure of securities based on mortgages, many of which were waiting to blow up when the housing bubble burst. Who created the housing bubble?

21May2009 | Sheldon Richman | 1 comment | Continued

The Dynamics of Disintervention

1) government interventions into the market process tend systematically to generate unintended consequences; 2) many of these unintended consequences frustrate the announced goals of those who support the interventions; 3) the response to these frustrated intentions tends strongly in the direction of further intervention; 4) the economic system performs less effectively in coordinating the plans of buyers and sellers as it becomes burdened with the cumulative effects of an increasingly chaotic mix of interventions; and 5) the process comes to an end when these cumulative effects result in a major system-wide crisis and public choosers decide to reject interventionism in favor either of comprehensive planning or radically freer markets.

21May2009 | Sandy Ikeda | 3 comments | Continued

The Trillion Dollar Meltdown: Easy Money, High Rollers, and the Great Credit Crash

The stocks of banks, investment banks, and associated financial institutions declined severely in 2007-08 when their many bad loans, first in subprime mortgages and then in other securities, surfaced. Scholars will be pondering this event for years to come, as they have with the Great Depression. In this instant and brief history, Charles Morris, lawyer, [...]

24Apr2009 | Michael S. Rozeff | 1 comment | Continued

TGIF: Crocodile Tears over AIG

If politicians spill any more crocodile tears over AIG, the EPA might have to declare Washington, D.C., a protected wetland. Sweep aside the phony expressions of “outrage” over AIG’s government-financed $165 million in bonuses (the information was in black and white) and ask yourself this: Who supplied the money? The rest of this week’s TGIF [...]

20Mar2009 | Sheldon Richman | 0 comments | Continued

Too Big to Fail

“Once you lose your freedom to fail, you also lose your freedom to succeed and you cease to be a free society.” —U.S. Rep. Jeb Hensarling of Texas In March 2008 the investment banking firm Bear Sterns failed and the federal government quickly stepped in. The public was inundated with the phrase “too big to fail” [...]

2Mar2009 | Michael Heberling | 8 comments | Continued

Bootleggers, Baptists, and Bailed-Out Bankers

For more than a year now, people worldwide have experienced an extraordinary chain of economic events. Led by crushing increases in U.S. mortgage-related bankruptcies, the world financial collapse that followed has been termed the subprime crisis, the financial meltdown, the Wall Street bailout, the beginning of another Great Depression, and even the end of capitalism [...]

2Mar2009 | Bruce Yandle | 6 comments | Continued

Bailing Out Statism

The key to understanding the saga of Fannie Mae and Freddie Mac—the recently nationalized twin government-sponsored enterprises (GSEs) that dominate home financing—is this: They were set up—intentionally—to distort the housing and mortgage markets. Government planners were not content to let voluntary exchange and spontaneous market forces configure those industries unmolested. So—holding the taxpayers hostage—they intervened. [...]

20Jan2009 | Sheldon Richman | 12 comments | Continued
Older Entries

    • © Copyright 2011 Freeman - Ideas on Liberty. All rights reserved.

    59 queries. 1.105 seconds