I saw this morning that Bush's approval rating is at 28% and the approval rating of Congress is at 18%. Obviously Bush is on the way out the door, but too bad we couldn't throw 82% of these bums in Congress out in the street too. And if you are curious why the approval rating of Congress is so low look no further than this shining example from 2003 in the NY Times.
''These two entities -- Fannie Mae and Freddie Mac -- are not facing any kind of financial crisis,'' said Representative Barney Frank of Massachusetts, the ranking Democrat on the Financial Services Committee. ''The more people exaggerate these problems, the more pressure there is on these companies, the less we will see in terms of affordable housing.''
And to think Barney Frank is blaming Bush for all of this. What a clown! How much do you think Fannie and Freddie were paying him to block efforts to regulate them? Affordable housing? As if going deeply in debt overpaying for a house but getting a short-term teaser rate that later doubles is somehow "affordable" to anyone? Mr. Frank if you want to blame someone for all these poor people being kicked out in the street you should look in the mirror and consider if any of your efforts actually make anything more affordable to anyone! Mr. Frank is certainly not alone either. Throw all the bums out in the street is what I say.
Don't forget to check back to Dan's Deep Creek Blog for future updates.
5 comments:
It's always deceptive to look at the overall approval rating for Congress, mainly because it is a slow moving legislative body made up of 535 members with extremely diverse views who belong to two opposing parties. How do you give that an approval rating? It also is never going to have the benefit of a cult of personality, like that 20 to 25% of the public that would still like Bush even if he started eating Jewish babies.
It would be more telling to look at individual approval ratings for Congressmembers, which outside of say 40 or so endangered (mostly Republican) incumbents are really quite high.
The criticism of Barney Frank is also quite odd considering the comment is over 5 years old! Fannie and Freddie certainly weren't facing any financial crisis at the time, though they had faced criticism for understating earnings at the time. Congressman Frank has been a long time proponent of a more well-regulated marketplace. The quote you have given without context is apparently a quote related to a Republican bill at the time which would have just shifted regulatory authority over the two to another body, but with no additional regulation. It's also telling that the bill was only aimed at Fannie and Freddie, a rather small part of the current crisis. It's also worth noting that the bill in question passed the House in a bipartisan fashion, despite heavy lobbying against it from religious organizations angry at a Republican inserted provision that would have banned non-profits (like churches) from obtaining federal housing grants. The bill probably would have passed unanimously if it weren't for that. The bill then never came up for a vote in the Republican-controlled Senate.
Yeah sure everyone loves their own Congressman because they bring home the bacon!
In my opinion, Fannie and Freddie have been facing financial ruin for nearly a decade and instead of limiting their power, politicians kept giving them more. Anytime your debt to capital ratios are on the order of 20-to-1 (which they have been for sometime) you are only a small loss away from complete financial ruin. You can ask these people being foreclosed on and the likes of Lehman Brothers about that as well.
Imagine for a second that you had $1,000 dollars and you wanted to invest it in XYZ Corp. which traded at $100 per share. But instead of just buying 10 shares and waiting for your $1,000 investment to grow you talk to uncle Freddie and aunt Fannie. They tell you that they will loan you another $20,000 based on your $1,000 being the principle for this loan. Now you can buy 210 shares of XYZ Corp and a 10% gain in the stock price results in a $2,100 gain for you (less any interest). Without their loan of course you would have only made $100. Quite a different huh?
But here's the rub that must people (including homebuyers) don't think of, when the price of XYZ Corp declines you also lose money at a much faster rate. For example, consider just a 5% decline in the price of XYZ Corp. In the case without the loan from Fannie and Freddie you lose $50, but in the leveraged case where you did take the loan you stand to lose $1,050 or $50 more than you started with. That is essentially where Fannie and Freddie find themselves today. Only a small % decline wiped them out completely! And this disaster has been looming for far too long while they paid to keep the regulators, and Barney Frank, at bay so they could make those huge profits.
As for the quote being out of context I believe you must have skimmed this part of the article:
"Under the plan, disclosed at a Congressional hearing today, a new agency would be created within the Treasury Department to assume supervision of Fannie Mae and Freddie Mac, the government-sponsored companies that are the two largest players in the mortgage lending industry.
The new agency would have the authority, which now rests with Congress, to set one of the two capital-reserve requirements for the companies. It would exercise authority over any new lines of business. And it would determine whether the two are adequately managing the risks of their ballooning portfolios.
The plan is an acknowledgment by the administration that oversight of Fannie Mae and Freddie Mac -- which together have issued more than $1.5 trillion in outstanding debt -- is broken. A report by outside investigators in July concluded that Freddie Mac manipulated its accounting to mislead investors, and critics have said Fannie Mae does not adequately hedge against rising interest rates."
The idea was to take power away from Congress and give it to regulators who could seriously address the problems. Unfortunately that never happened for a variety of reasons, but I contend that it very well could have saved us from the mess we are in today!
Shouldn't you get back to targeting John Bambacus or coal miners now?
Why are you blaming REPRESENTATIVE Frank for the failure of a bill that PASSED the HOUSE with a large bipartisan majority? That really defies logic. Shouldn't you be blaming the Republicans who controlled the Senate at that time and wouldn't bring the bill up for a vote?
By the way, who would have appointed the new regulatory head? The Bush administration? I guess it might have been a better place for Brownie than FEMA, LOL. Maybe Mr. Bubble himself Alan Greenspan could have headed it up.
But for all of this, I still find it amusing that you are harping on about Fannie and Freddie, two agencies that have had problems ever since the former government agencies were privatized (or partially privatized, depending on how you think of them) and that are rather minor trees in the current forest of the financial crisis. To claim that giving further phantom regulatory authority to Bush appointees, who have spent the last eight years trying to find ways around enforcing existing regulations is really quite humorous.
I'll go back to targeting Bambacus when I see him (or his ego) out spewing his crap again. And contrary to your assertion, I've never targeted coal miners, but rather Big Coal and destructive mining practices.
Fannie and Freddie's debts were on par with the massive federal deficit. I'd hardly call that minor.
As for Frank I see him on TV a lot these days blaming everyone else and as I see it he is equally responsible. That's all I was trying to point out.
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