Friday Funnies

Freddie, Fannie, and the Financial Crisis

Henry Payne | October 24, 2008

Comments

JMR|10.24.08 @ 7:35AM|#

And the "no regulation" came during a period of magically increased regulatory spending!!

|10.24.08 @ 9:16AM|#

Alan Greenspan says that the subprime mess caused the current financial problems. Did Fannie and Freddie also cause it? I was under the impression that a subprime loan was one that didn't qualify for Freddie or Fannie. Shouldn't Greenspan be saying that all mortgage lending is responsible for the mess?

|10.24.08 @ 9:24AM|#

Well it's oversimplified, but that's to be expected. Some genuinely funny elements too. I especially like "Pookums". I give it a C+

|10.24.08 @ 10:04AM|#

Replace Pelosi with the Chairman (former ranking minority member) of the House Financial Services Committee* and you might have a winner.

* Is Barney Frank-enstein too obvious?

|10.24.08 @ 10:04AM|#

Lamar,

Fannie & Freddie changed their minds about subprime loans according to Arnold Kling (who used to work at Freddie, even):

...in the years leading up to this crisis, politicians imposed both formal and informal "affordable housing" goals on Freddie and Fannie, sending the two agencies plunging into the subprime mortgage market.

|10.24.08 @ 10:14AM|#

* Is Barney Frank-enstein too obvious? - J sub D

Mebbe so. I know I have no interest in the sequel, The Bride of Barney Frank-enstein, introducing Steven L. Gobie.

Kevin

|10.24.08 @ 10:48AM|#

Mebbe so. I know I have no interest in the sequel, The Bride of Barney Frank-enstein, introducing Steven L. Gobie.

But Abbott and Costello meet Barney Frank-enstein would be a hoot.

|10.24.08 @ 11:15AM|#

"Abbot and Costello buy this great big old house, see- and they're gonna flip it, and get freakin' rich, you know. But they're down in the basement, and they find the secret passage to the laboratory, and they pull the sheet off the table, and there's this monster, and all hell breaks loose, and it's a fucking riot. I laughed the whole time I was reading the script, I tell ya. Whaddaya say? Can I put ya down for ten million? If you can't come up with the cash up front, I can introduce you to my guy down at the Federal Reserve, who's working at the Stimulus Window, these days. You won't regret it."

|10.24.08 @ 11:15AM|#

No. Fannie and Freddie don't have anything to do with this. It was all deregulation. DEREGULATION, I tell you! Stop looking at me that way!

justsomerandomfellow|10.24.08 @ 11:18AM|#

The Frankenstein analogy is particularly appropriate for Fannie and Freddie. While I'm not a libertarian, I would agree with many here that the worst abuses in the market occur when you create public-private hybrids like Fannie and Freddie.

TallDave|10.24.08 @ 11:49AM|#

Nailed it.

justsomerandomfellow,

What's especially bizarre is that they were allowed to make political donations to its political owners in Congress. It's like the Pentagon was making donations to the Congresspeople that control its budget.

|10.24.08 @ 12:50PM|#

Isn't the real problem the house of cards we've created by living beyond our means with credit?

|10.24.08 @ 12:58PM|#

Yes TrickyVic, and that is why we must all be given even more credit to get us out of this.

Sam Grove|10.24.08 @ 1:10PM|#

...create public-private hybrids

The whole point of such monstrosities is to enable the government to do what it's not supposed to.

LarryA|10.24.08 @ 2:39PM|#

It's like the Pentagon was making donations to the Congresspeople that control its budget.

The Pentagon would never do any such thing. But if Congresscritters want to play with tanks or other such toys, that can be arranged.

The whole point of such monstrosities is to enable the government to do what it's not supposed to.

And to enable private enterprise to do really stupid things they would never otherwise consider. It's a lot like "reality" television.

Last time I got one of those "deregulated" home loans my wife and I signed/initialed/signed that we had initialed a stack of government-mandated paperwork that was about an inch thick. And that's here in Texas, where the state, county, and city don't add any layers.

|10.24.08 @ 3:05PM|#

"...While I'm not a libertarian,...

Not that there's anything wrong with that.

Angel|10.24.08 @ 3:08PM|#

"I can introduce you to my guy down at the Federal Reserve, who's working at the Stimulus Window, these days. You won't regret it."

Stimulus Window! Now THAT'S a Friday Funny. Thanks.