All Posts Tagged With: "fannie mae"
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 | 0 comments | ContinuedThe 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 | Sanford Ikeda | 0 comments | ContinuedThe 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, banker, [...]
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” (TBTF) [...]
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 | 2 comments | ContinuedBailing 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.
Make no [...]
Nationalization of the Mortgage Market
Breaking down the mortgage market breakdown and how it’s all the government’s fault.
1Dec2008 | Robert P. Murphy | 2 comments | ContinuedBailing Out Statism
The key to understanding the saga of Fannie Mae and Freddie Mac—the newly nationalized twin government-sponsored enterprises (GSEs) that dominate home financing—is this:
They were created—intentionally—to distort the housing and mortgage markets. That is, government planners were not content to let voluntary exchange and spontaneous market forces configure those industries unmolested. So—holding the taxpayers hostage—they intervened.
Make [...]
Can the Feds Save the Housing Market?
Government Solutions Will Only Make Matters Worse
1Jun2008 | Robert P. Murphy | 0 comments | Continued-
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