tazzygirl
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quote:
ORIGINAL: Sanity
Bush was warning of the looming crisis for years prior to your Dr Doom, so wouldnt that make Bush the prophets prophet?
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Hmmm... so... Nouriel Roubini, or Dr Doom, gave his lecture in 2006... and people thought he was insane. He gave a deeper, more depressing talk in 2007 and they called him a "prophet".
In 2007, the Democrats took control of Congress for the first time in 12 years.
Yet, this is the Democrats fault.
Interesting spin.
I never did like carney rides that went around in circles.
Show me where i said it was the fault of Bush or the GOP.
As of 2007, Congress had been under the control of the GOP. In direct conflict with this post...
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If you believe that GWB is responsible for the housing collapse, just what did he do to cause it. ? The dems controlled congress.
So, through the past two administrations, we have seen times when the President cannot control the outcome of his own party, let alone the other.
Bush pointed out the doom of Fannie Mae and Freedie Mac 34 times since 2001. Yet he couldnt get anything passed through his own party held congress. Much like we are seeing with Obamas.
But, Freedie and Fannie were not the cause of the housing burst.
August 27, 2010
Fannie, Freddie did not cause the housing crisis
This is an old theme, but it bears repeating when new information is presented. The right keeps blaring that liberals caused the housing bubble by showering money upon poor people through Fannie Mae and Freddie Mac. (And through other channels via CRA requirements, as commenters have noted. Thanks Josh.) So it must be repeatedly countered. I have no love for Fannie/Fred. Almost nobody other than the Wall Street Journal's editorial page was more critical of them than me in the years leading up to the disaster. They were ghastly government/private mutants, with taxpayers taking on all the risk and shareholders reaping incredible profits until the end.
But the fact is that they played a relatively minor role in the subprime bubble. They got into subprime only after they started losing market share to Wall Street, which was leading the subprime and Alt-A parade. They never had more than 13 20 percent of their originations in subprime. The table below shows the action. It's from a new "autopsy" of Fannie and Fred, of which the NYT's Economix blog has a good summary.
The vast majority of loan defaults have not been made by the poor. And Fannie & Fred weren't lending much to low-income folks anyway.
UPDATE: For the complete demolition of the "Fan/Fred caused the bubble" argument see the blog Big Picture by Barry Ritholtz, who's hardly an apologist for soft-headed liberals. See Ritholtz posts here and here and especially here. Then read his book, Bailout Nation
http://weblogs.baltimoresun.com/business/hancock/blog/2010/08/fannie_freddie_did_not_cause_t.html
Today in a House Oversight Committee hearing with former Fed chairman Alan Greenspan, SEC chairman Christopher Cox, and former Treasury secretary John Snow, Rep. John Mica (R-FL) revived that argument. He also tried to tie the crisis to Sen. Barack Obama (D-IL), holding up a chart called “Follow the Money Trail.” He pointed that Obama has been the largest recipient of donations from Freddie and Fannie. (Actually, he’s the second highest.)........ (the hightest? McCain)
Committee chairman Henry Waxman (D-CA) chastised Mica for trying to turn the financial crisis into a political issue. He noted that Freddie and Fannie “certainly played a role” in the current situation, but then asked the witnesses, “Do any of you believe that they were the cause of this financial crisis?” All three men said no.
~Video included on the link
Federal housing data back up this conclusion — that “the private sector, not the government or government-backed companies, was behind the soaring subprime lending at the core of the crisis.” As Center for American Progress Senior Fellows Michael S. Barr and Gene Sperling explain, Freddie and Fannie weren’t even securitizing subprime mortgages en-masse until 2005:
The subprime boom was led by investment banks and mortgage brokers, not by government-sponsored enterprises. Fannie and Freddie became unhinged in the middle of this decade when they tried to play catch-up. Their shareholders and managers pushed them to recover the securitization market share they had lost to unregulated investment banks getting absurd AAA ratings for packaging subprime dross. From 2005 to 2008, Fannie Mae purchased or guaranteed $270 billion in loans to risky borrowers — triple the amount in all its earlier years combined.
As Center for Economic and Policy Research co-director Dean Baker has written, “Fannie and Freddie got into subprime junk and helped fuel the housing bubble, but they were trailing the irrational exuberance of the private sector. They lost market share in the years 2002-2007, as the volume of private issue mortgage backed securities exploded.” More here on “how did this happen.”
http://thinkprogress.org/2008/10/23/mica-waxman/
Its my contention that the Federal Government has enough blame to spread around to all parties. Blaming only Obama or only Bush is just rediculous.
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RE: Home sales plummet - 
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