Defending Jim Cramer

Jumping on the Jon Stewart bandwagon, Todd Gitlin, Eric Alterman, Chris Hayes, and sundry other lefty activists have started the website fixcnbc.com, a network, they argue, that has helped "get us into the economic crisis we face today." This is utter nonsense. And the website presumes that we already agree with this blame-a-cable-network argument, offering little evidence (save an embedded Daily Show video) to bolster its case. It does, though, offer a quote from everyone's favorite hate-figure, host of CNBC's Mad Money Jim Cramer, as proof of the network's unforgivable perfidy: "Housing bubble? What housing bubble? The signs are in place for a further run-up in real estate. Breathe easy, mortgage holders…There is no housing bubble." As fixcnbc.com notes, Cramer's assurance was made in 2003—hardly damning evidence of his complicity in "the economic crisis we face today." (In 2007, Cramer freaked out about the housing crisis on his CNBC show). Indeed there are many that are stepping up to defend Cramer's now-infamous advice on Bear Stearns, arguing that professional economists like Stewart misunderstand the difference between keeping stock in Bear Stearns and keeping a brokerage account with the company.

But rather than attacking just Cramer—who does seem to be an unreliable source of financial information—why not go after Barney Frank who, also in 2003, argued that "these two entities, Fannie Mae and Freddie Mac, are not facing any kind of financial crisis." As the Washington Post reported, Frank "said the [Bush] administration's position [on tighter regulation of Fannie and Freddy] is driven by concerns about the financial safety and soundness of the companies 'to the exclusion of concern about housing.'" To the exclusion of concern about housing. But here is a potential difference: Frank hasn't attacked Barack Obama's stimulus plan as "causing the greatest destruction of wealth I have ever seen by a president," as Cramer recently did.

But of course, you rubes, cable television is the real malevolent power behind the financial crisis. Mustache-twisting CEOs use financial news programs to manufacture consent!

There is much to say in CNBC's defense, though why bother when The Atlantic's Megan McArdle has done all the heavy-lifting for me? A lengthy excerpt from her terrific blog post on the Kramer-Stewart showdown:

Jim Cramer ran a show on trading.  You can say it might have been nice if he'd run a show on financial regulatory theory, but there's no reason to think that he would be any good it it--the guy's a trader, not a regulator, not a crack investigator.  The skills that make someone a good trader, like a short attention span and an appetite for risk, are not what makes someone good at economic theory or managing regulation. We lost precisely nothing, as a society, when he decided to tout stocks instead of take a dive into public policy.

Individuals, of course, did lose something by following his advice.  I'm sure a number of his viewers stuck with Bear and regretted it.  On the other hand, I'm sure a number of his viewers sold out of the stock market in October on his advice and saved themselves a bundle.   Do you know whether he has cost viewers more than he made them?  I tend to suspect he has, but I have no actual data on which to base that conclusion, only a general belief that ordinary investors can't beat the market and shouldn't try.

No, neither Jim Cramer nor CNBC created this mess.  They focus mostly on stocks, and though people tend to think of the stock markets as synonomous with the financial system, they just haven't had much to do with the current problems.  And thank God, really.  I'd rather not hand over the responsibility for the US financial system, or even my retirement account, to a guy who goes on camera to bite the heads off of plastic bulls.

The problem with Jim Cramer is the problem with the Jonas Brothers:  what he does simply isn't much good, for all that people seemingly have a large appetite to consume it.  And he encourages people to pursue a destructive activity, trading their own portfolios, when most economic research shows they'd be better off in an index fund.

But this is a minor sideshow.  Going after Jim Cramer is like trying to fix your marriage by getting new drapes.

Comments

[Morgan]

"Going after Jim Cramer is like trying to fix your marriage by getting new drapes."

I think it's far worse than that. It is active ignorance of the root of the problem, and an attempt to attack a peripheral voluntary entertainment instead of the compulsory regulatory mess.

It's not an attempt to fix anything. It's more like trying to resolve your marriage by burning your house down with your wife in it. It's so upside-down, backwards, and actively blind that the word 'fix' should never come into the conversation.

[crimethink]

Wait a minute, I'm confused. In the post below you guys are saying that Obama's wrecking the economy by saying things are going badly, but here you're arguing that people yakking on TV have no effect on the economy.

[Morgan]

Oh man just saw the site itself. No, the fix isn't to tune out of the channel it's to hold them responsible for their advice. Next time you predict something Jim Cramer, you just better be right. That is our edict.

[Libertymike]

Query: How did Cramer make all his money and get so rich?

I bet the answer does not include "that he isn't much good."

[Morgan]

@crimethink

Huge difference. Jim Cramer can't spend trillions of dollars where he sees fit. His bad info affects his viewers and maybe some public opinion.

Obama being wrong affects the entire market. Because he's shown a willingness to spend money based on what he thinks is wrong, and to try to legislate fixes.

Maybe that's not the best explanation, but I'm having a hard time believing you actually can't tell the difference between a talk show host and the president in terms of their potential effects.

[JB]

These bunch of liars make me sick.

They are the same ilk along with nearly everyone else in the mainstream media who won't say a word about the connections between prominent democrats and Fannie Mae and Freddie Mac.

Here is an article from 1999 on Bill Clinton and Fannie Mae and Freddie Mac:
http://www.thedonovan.com/archives/2009/02/oka_little_blas.html

Oh, SNL tried to have more journalistic integrity than Stewart, but they failed by not running the skit:
http://patdollard.com/2008/10/it-is-here-the-banned-snl-skit-cannot-hide-from-louie/

[John-David]

I know people who, near the end of the bull market, were trading based on CNBC info. I don't see anything wrong with holding CNBC's feet to the fire when a lot of "little guys" lost a lot of money listening to them parrot lying CEOs. Most people expect the President to lie; they don't expect "financial experts" to do the same.

Sorry for all the "scare quotes".

[NAL]

I think it's far worse than that. It is active ignorance of the root of the problem,...

Agreed.
It's as ridiculous as trying to solve a debt problem by borrowing more money...oh wait,...

[Maitri]

That even Reason rushes to defend Cramer from a comedy show tirade is even more telling.

But of course, you rubes, Comedy Central is the real malevolent power behind the financial crisis. Mustache-twisting writers use Stewart's comedy show and resultant lefty websites to manufacture consent!

[Tbone]

The promoters of fixcnbc are long-time media critics who all complain about truth and gravitas in the MSM - I am with them on this. The unfortunate problem is reasoned analysis and measured discourse doesn't sell.

"Gossip, gotcha, and titillation" (Jim Sleeper, Yale)

Maybe Reason.TV can package it for the next generation. The prepared pieces are generally very good; the interviews generally awful.

[Libertymike]

Another difference between Obama and Cramer is that the former did not have to excel in any of his prior positions, and did not, in order to get his current gig while the latter did. Come to think of it, that is one Nate Newton size kind of difference.

[PR]

That even Reason rushes to defend Cramer from a comedy show tirade is even more telling.

It's a comedy show when they are criticized. It's the bravest show on television when they are praised.

[Paul]

But rather than attacking just Cramer-who does seem to be an unreliable source of financial information

I disagree with this sentiment. Cramer is no worse (or better) than 99% of all the financial analysts out there.

It's all merely educated guesswork. The only difference is his predictions are made in a bombastic format on national TV, whereas most other analysts make their predictions in stoic columns in financial journals.

Cramer's just a noisy, forceful guy, so he's easy to hate.

[Kolohe]

@libertymike-

exactly. That's why, though I largely agree with McArdle's point, I find she did not do enough 'heavy lifting' in Moynihan's words.

Cramer has said why he does what he does - he can still earn some coin, but work less hours and avoid heart attacks.

And that's my primary critique of Cramer's show. Not that one cannot pick stocks better than the market. (Altough this is indeed very difficult; as a retail investor you're flying a snub fighter around the star destroyers of the major funds & trading houses and the death star of the govt itself.) My critque is that picking stocks better than market takes an amount of time that makes it not worth it to the retail investor with some 100K or so at stake. Cramer's own thumbrule is 1 hour per stock per week. With a 6-7 stock porfolio you're looking at 300+ hours per year, for a potential - and by no means guarenteed- gain of a couple thousand dollars over throwing it into an index fund. Barely minumum wage. So it ain't worth it unless you like it and do it as a hobby.

[ed]

I'd be perfectly content if the AIG brainiacs who wrote those billions in credit default swaps were identified, dragged out of their golf carts and beheaded. Is that asking too much? Fraud has been committed on an unprecedented scale. Time to sharpen the guillotines.

[MNG]

"prominent democrats and Fannie Mae and Freddie Mac"

Are there still people who think all this was caused by Fannie Mae and Freddie Mac?

WTF?

"Start with the most basic fact of all: virtually none of the $1.5 trillion of cratering subprime mortgages were backed by Fannie or Freddie. That's right - most subprime mortgages did not meet Fannie or Freddie's strict lending standards. All those no money down, no interest for a year, low teaser rate loans? All the loans made without checking a borrower's income or employment history? All made in the private sector, without any support from Fannie and Freddie.

Look at the numbers. While the credit bubble was peaking from 2003 to 2006, the amount of loans originated by Fannie and Freddie dropped from $2.7 trillion to $1 trillion. Meanwhile, in the private sector, the amount of subprime loans originated jumped to $600 billion from $335 billion and Alt-A loans hit $400 billion from $85 billion in 2003. Fannie and Freddie, which wouldn't accept crazy floating rate loans, which required income verification and minimum down payments, were left out of the insanity."

http://www.businessweek.com/investing/insights/blog/archives/2008/09/fannie_mae_and.html

[Tangental]

The big news of the day is the AIG bonuses. Barack Obama, obviously worried about getting on the wrong side of the bailout backlash, berated AIG and directed Tim Geithner to do what he can to block their payment.

Republicans weighed in too; John Boehner called the bonuses "outrageous" and demanded an "exit strategy" from AIG. The company, meanwhile, says it is contractually obligated to pay the bonuses and has no choice.

It strikes me that this episode illustrates the inherent evils of a bailout. There really are no rules; the government pumped many billions into AIG, but the company and its new "owners," the taxpayers, are making it up as they go along. AIG is likely right in saying it is obligated to pay the bonuses, but the public is also right in believing a bailout shouldn't work this way. The problem is that we have no established rules to govern bailouts.

Which is one basic reason why bankruptcy is far preferable. Bankruptcy has reasonably clear rules that have been developed over many years. The bankrupt company is run for the benefit of its creditors, or, if appropriate, shut down. The creditors decide whether to keep existing management on. Executory contracts can be accepted or rejected; labor and supply agreements can be renegotiated. A judge presides so that disputes can be fairly resolved.

A bailout is an ill-defined procedure in which no one's rights are clear, and political calculation counts for more than fairness or transparency. The flap over AIG bonuses is just one of many that we can expect to arise if we continue down the path of endless bailouts, rather than allowing insolvent companies and their creditors and investors to pay the price of that insolvency.

[Mike Laursen]

I've checked in on the Daily Show a couple of times since Obama ascended. Living down to my expectations, it looks like they are settling on reserving their barbs to making fun of conservative newscasters, while making only fawning, playful pokes at Obama.

[Maitri]

No, it's a comedy show, whether it's good or bad, and Stewart doesn't state otherwise. Bottom line: Anyone who watches Mad Money or The Daily Show and takes financial advice from these TV shows is dumb.

[PR]

MNG,

Fannie & Freddie certainly did offer Stated Income Stated Asset zero down loans.

[Kolohe]

Fannie & Freddie certainly did offer Stated Income Stated Asset zero down loans.
Frannie and Freddie always required conforming loans.

Fannie and Freddie, which wouldn't accept crazy floating rate loans, which required income verification and minimum down payments, were left out of the insanity.

Frannie and Freddie needed to be bailed out by the govt, so there's a prima facie case that they fraked up *somthing* royally.

[PR]

and their "strict standard" was a 620 credit score.

[Kolohe]

including speling

[PR]

Fannie & Freddie certainly did offer Stated Income Stated Asset zero down loans.

Frannie and Freddie always required conforming loans.

??

[The Sadness of the Libertarian]

What are you guys arguing about?

The economy is fine. R.C. Dean (he has to change that name) assured me that the middle class is not struggling, and that this whole mess is just one big misunderstanding. Also, John "Markets Are Magical" Stossell said the same thing. Obviously, I'm torn.

On my most cynical days I am convinced that this is all just one big Socialist conspiracy, and that the bailout money is actually being squirreled away in Israel.

I would choose someone else to shift blame to, so that I don't have to reevaluate my untested political philosophy like a mature, intelligent human being, but it's just so difficult.

Help.

-Sleepless In Nowhere

[Taktix?]

But rather than attacking just Cramer-who does seem to be an unreliable source of financial information-why not go after Barney Frank...

Becuase, somehow, Cramer accomplished the astounding feat of making himself look like more of a complete jackass than Barney Frank.

Be nice, the man deserves a medal...

[Kolohe]

??

'Conforming' not only refers to the upper loan limit but also that the loan met doc and dti requirements. At no point did either org cover no-doc loans. (I think they never did zero down loans* but am now not sure)

They did for a time in 2008 do 'jumbo-conforming' but the cat was well out of the bag by then. Since then everything is back to 'conforming' (with some areas still at higher than the previous national limit of 417K)

*even if they did not do zero down loans, the way around this was 80/20 (also 80/10/10) where you got the conforming 80% loan and a second loan to cover the 'down payment').

I've said the Freddie Frannie fucked up. But it is not true that offered No-doc loans.

[TheThe Sadness of the Liberta]

"It's not an attempt to fix anything. It's more like trying to resolve your marriage by burning your house down with your wife in it."

Wow. Talk about hyperbole. You take a clumsy shit all over one analogy, and then counter with one that is even more ridiculous. And many of you wonder why people think that most Libertarians are socially retarded cuckoo clocks. You better have youth as a excuse.

Stewart may have gotten too full of himself, but there is absolutely nothing strange about taking to task people who make their living selling their advice; especially under the current circumstances.

Of course, if it was a Libertarian doing the questioning, then onward!

[Chuck]

The main criticism of CNBC (and Cramer specifically) seems to be that they uncritically repeated the press releases of a bunch of big companies without doing any further investigating. To me, that sounds pretty much like most of what passes for journalism these days. I don't see why CNBC is being singled out, other than some rubes took it at face value and spent a bunch of their own money without doing any furhter research.

Anybody that goes out and buys stock just because some guy on TV told him to is a moran.

[quiet one]

As a pretty hard core libertarian and fan of the Daily Show, I thought that Stewart made some good points, along with his usual liberal crap. The real disappointment was Cramer who laid down like a puppy on its back. He didn't even try to throw a punch or defend himself, truly disappointing as some of the attacks were clearly unfair or overboard.

[B]

"No, it's a comedy show, whether it's good or bad, and Stewart doesn't state otherwise."

Give me a fucking break. Stewart tries to act like he is an Edward R. Murrow that also happens to tell preaching-to-the-leftwing-choir-that-is-my-audience jokes. Every time someone calls him on his partisan hackery and his sanctimonious bullshit, he always counters with "I only ever claim it is a comedy show" bullshit.

Christ, if anyone out there needed anymore
evidence at all that Stewart is a partisan hack, this is it. As Tucker Carlson so rightly stated the other day, the only reason Stewart went after Cramer is because he attacked Obama, not because Cramer abrogated his responsibilities to the public. Christ, his fucking show is called Mad Money, for god sakes. What more evidence do you need that the guy is not some sort of fucking watchdog?

Seriously, Obama has proven himself to have virtually no equal when it comes to incompetence, yet Stewart criticizes a fucking TV show host on a network hardly anybody watches instead, while saying pretty much nothing about Obama himself? You can't make this shit up. And the idiots starting this stupid fucking website don't find anything wrong with that. It's just fucking pathetic to hear pieces of shit like Stewart and Chris Matthews all of a sudden claim that the president shouldn't be criticized in tough times, seemingly forgetting the unprecedented level of vitriol that was spewed at Bush. While some of that was surely deserved, Obama's absolutely breathtaking incompetence certainly deserves some harsh skewering as well.

And it doesn't help that Stewart makes Dane Cook look funny.

[matt]

Stewart is blessed with great comedic timing but cursed with having absolutely nothing to say.

[sage]

I'm pissed at Jim Cramer because he forced, you hear? FORCED me to invest money in Bear Stearns. And when things weren't looking good for them, he FORCED me to keep my money in there.

[Jesse Walker]

It's just fucking pathetic to hear pieces of shit like Stewart and Chris Matthews all of a sudden claim that the president shouldn't be criticized in tough times

When did Stewart claim this?

[Teresa]

Cramer is a criminal and the SEC and FCC must investigate. He starts an "entertainment" financial news show to reach the unsophisticated masses. Then, he meets with financial insiders with highly suspicious information at his finger tips, i.e. that Bear Sterns is in trouble, and does nothing to independently verify their talking points. So, Cramer goes on his show and urges the common man to buy Bear Sterns, though financial analysts suspect something is wrong. He says that is like BS stock at $60 or $70 days before it crashes. He says that people should not pull their money out of BS. He pushes the stock to mitigate their losses - to mislead investors. If he took money for that, it's a crime.

[MJ]

"AIG is likely right in saying it is obligated to pay the bonuses, but the public is also right in believing a bailout shouldn't work this way. The problem is that we have no established rules to govern bailouts."

It is difficult to see under what legal principle, if the executives fulfilled the bonus requirements of their contracts, AIG is not obligated to pay the bonuses. Perhaps these contracts made sense for a thriving company and now they do not, I do not know. For Obama and the rest of the political class to say that a company can ignore its obligations because the political class thinks badly of those obligations, undermines trust in that company, for customers, for vendors, for potential employees. It is hard to see how AIG will fare in the future as a result of this demagoguery

[Kolohe]

It is hard to see how AIG will fare in the future as a result of this demagoguery

AIG Delenda Est. The sooner the better.

[jasa]

...the only reason Stewart went after Cramer is because he attacked Obama...

Jebus Fucking Chrysler. Stewart went after Rick Santelli and CNBC. CNBC deserved it. Santelli really deserved it. Cramer was just incidental collateral damage, until he bitched about it.

Cramer should have sucked it up and kept his fat mouth shut. Bad stock picks are one thing, fraud is quite another. When Stewart's folks dug a little deeper, they found 2006 video of Cramer describing how fund managers do the pump and dump, and boasting he'd done it as well.

I'm surprised Cramer didn't take heat for it back then. Today, it's just about a hanging offense.

Stewart's liberal leanings may steer him wrong on occasion, but in this case he's right on target. Plus, it was funny as hell.

[Jesse Walker]

Stewart went after Rick Santelli and CNBC. CNBC deserved it. Santelli really deserved it. Cramer was just incidental collateral damage, until he bitched about it.

Add to that the fact that Cramer's iffy track record and over-the-top style are a running gag in pop culture already (see the parody of him on King of the Hill, for example), and have been since Bush was president.

[Kolohe]

CNBC deserved it

Yes.

But all the clips that Stewart showed during his interview were of Kramer on not-CNBC. (I agree, however, that these clips should start an investigation)(And I understand that the regular viewer would have seen all the previous clips of Santelli etc over the past week)(and I agree that Kramer did enough to keep this log rolling, no doubt to some short benefit for CNBC ratings)

On a different note, I have come around to agreeing with the fundemental hypocrisy of the 'i'm just a comedian' defense - although I still like Stewart's (and Colbert's) show because it has CSPAN topics in an entertaining format.

Stewart's pull quote from that interview was: 'it's not a fucking game'. Fine. Stewart says he 'admits he's selling snake oil' Fine. He's says he'd love to go backing to 'telling fart jokes.' Fine.

Then do it.

If Stewart wants to go to a standard where the somber and serious is the somber and serious, and the silly and friviluous is the silly and frivilous...and never the 'twain shall meet...fine. Well, for starters, no one's going to watch the somber and serious. That's a tv fact of life. But more importantly, to keep his end of the bargain, Stewart then needs to stay on his side of the line. Which he won't, even in the unlikely but preferable event of Zombie Murrow eating Sean Hannity's brain on air and taking taking over hosting duties.

Lotsa people love to hate on infotainment. I think it's a valuable commodity when used correctly. But as Stewart's stock in trade, for him to hate on it is indeed hypocritical.

[Russ R.]

I happen to have a lot of respect for both Jon Stewart and Jim Cramer... but I'd still love to see them go head-to-head in the UFC octagon (where I'd put my money on Cramer... Stewart's way too pretty.)

Ultimately they're both entertainers, and regardless of what they say or do, their objectives are identical... to attract sufficiently large A.C. Nielsen audiences that the advertising teams at their respective networks can sell commercial airtime at a high enough price to pay the bills and bank some decent profits. And since both shows continue to air after a few seasons, I'm satisfied that both of them are successfully achieving their objectives, which I can only respect.

While Stewart talks politics, and Cramer talks finance, they're both selling the same tonic--making their audiences feel like they're smart... at least smarter than the average prole. And who here doesn't like a piece of that every so often?

[Gilbert Martin]

The real reason all these leftists starting harping on Cramer was because Cramer started criticizing Obama's performance after the election.

One must not critcize The One or the wrath of the Obamamaniacs will descend upon you.

[Russ R.]

"Santelli really deserved it."

Disagree with you on that one... Where Santelli differs from Stewart and Cramer is that he truly knows his shit. Stewart's got a team of writers, and Cramer's got a team of researchers. Santelli parks himself in the CME trading pits and calls the game like he sees it... and after being out there for as many years as he's been out there, he knows the game better than almost anyone... better than the folks in academia or government, and certainly better than a team of comedy writers.

So, when Santelli tells you the market is selling off because they don't like Geithner's ambiguity, or Obama's housing plan will do more harm to the markets than good... it's not because he's got a partisan axe to grind. He was saying the exact same thing about the corporate bailouts (Bear Stears, Fannie, Freddie, AIG, etc.) back when Bush and his team were calling the shots. He's been consistently negative about government intervention for as long as I can remember (and I've been a regular CNBC viewer since the late 90's).

[jasa]

... I have come around to agreeing with the fundemental hypocrisy of the 'i'm just a comedian' defense...

To the extent that Jon Stewart uses that defense to excuse his own errors, shame on him. But as a regular viewer, I haven't seen it happen recently.

He does use it as a cudgel to encourage ostensibly more serious media types to do their job better. I think that is fair play.

As far as the whole somber and serious vs comedy issue, satire has been a part of the political landscape since well before Mark Twain's time. Some like it, some don't.

[Not as libertarian as you]

Stewart was dead right on what he said about Santelli.

I have to wonder though if ideology wise the roles were switched, if people on this message board would be singing a different tune. Actually im pretty sure they would be this belong on hack watch

[Mo]

Indeed there are many that are stepping up to defend Cramer's now-infamous advice on Bear Stearns, arguing that professional economists like Stewart misunderstand the difference between keeping stock in Bear Stearns and keeping a brokerage account with the company.

Uh, Cramer also suggest you buy Sterns around then too (start at 2:50). He got a stock pick wrong, BFD. However, he's a big crybaby when he gets criticized. When people analyze his picks and show that they underperform the market, he points to the fact that he made a lot of money during a once in a lifetime bull market. When his balloon gets pricked, he goes to "I'm an entertainer".

If you want entertainment and decent stock picks, get a monkey in a rumpled suit. You'll get better portfolio performance and higher quality (and more refined) entertainment.

[jasa]

So, when Santelli tells you the market is selling off...

Russ, did you watch the clip? Stewart was picking on Santelli for calling all the sub-prime mortgage holders "losers". Some of these homeowners are indeed losers, in the sense that they gambled knowingly and lost. Plenty of others are clueless sheep. Now shorn. Calling them losers is a bit over the top.
One shouldn't pick on the marks. It shows a lack of noblesse oblige.

Gilbert, shut the fuck up. Let the adults talk.

[MNG]

"it's not because he's got a partisan axe to grind. He was saying the exact same thing about the corporate bailouts (Bear Stears, Fannie, Freddie, AIG, etc.) back when Bush and his team were calling the shots."

Well, maybe not a partisan one but an ideological one...

On Stewart, I actually failed to see why the interview was a big deal, but then I have trouble taking him seriously. He reminds me of a left Rush Limbaugh. I hate the way he mugs for the camera and often his "joke" is nothing more than making faces. Some of the segments on his show are funny, but that's probably more his writers.

Colbert on the other hand strikes me as both very smart and very funny. But I've liked him since he was on Strangers With Candy.

[newlibertarian]

link to The Atlantic's Megan McArdle blog is incorrect...

[MJ]

"AIG Delenda Est. The sooner the better."

Perhaps, but it would have been nice for the government had not given AIG billions of dollars and before undermining AIG's credibility. It makes no sense for the government to save a company from bankruptcy and then demand that the company treat its obligations as if it was legally bankrupt.

[juris imprudent]

Take the economic advice of all those named above in one hand, and shit in the other.

See which one fills up first.

[JB]

MNG,

I never said Fannie Mae and Freddie Mac were responsible for everything, that's the straw-man in your head talking.

There were one of the huge catalysts however. Go back to that 1999 article. They started making a large number of sub-prime loans and made moola on packaging them. Eventually more banks got in on the action after following the examples of Fannie Mae and Freddie Mac.

They were left out of some of later insanity, but they started some of the early insanity which led to the later insanity.

Oh, here's another inconvenient fact for you:
"Fannie Mae and Freddie Mac, the country's second-biggest mortgage finance company, together owned a record $6.9 billion of foreclosed homes on March 31, compared with $8.56 billion held by all 8,500 U.S. commercial banks and savings and loans."
http://archives.chicagotribune.com/2008/aug/03/business/chi-re-fannie-unsold-home-0803aug03

[Warren]

I'm sorry but there is not a good word that can be said about Wall Street scum bag and crony communist Jim Cramer. He is teh SUXOR!

[Hobo Chang Ba]

What I'm still wondering is why Cramer didn't even bother to defend himself. Man, everyone's saying "Stewart beat Cramer into the ground, curb stomped him and then fucked the crack in the back of his skull til Cramer's eyes popped out." I'm just not seeing that - Cramer lay down for him willingly and gently asked for him to stop thrusting quite so hard.

Had Mr. Cramer said (in his usual beserk tone):
"Mr. Stewart, since you're such a fiscal frickin' genius, why didn't you predict the stock market collapse? Oh - that's right - you're a fucking comedian who is now trying to lecture me self-righteously with 20/20 hindsight over a couple of minor mistakes I made, despite that I had told everyone to get out of the financials back in 2007 when subprime started to go sour. I made a couple bad picks, whoopty-frickin-doo. Find one stock analyst who hasn't and I'll let you curb stomp me and fuck the hole in my skull until my eyes pop out."

"Oh yeah - by the way - hmm... finance isn't a 'fucking game', but I guess politics is... All the factual errors you make can be written off as comedy - so if my show had just been on Comedy Central instead of CNBC, you would have praised me for spoofing the hypertensive trader stereotype and laughed the same exact silly promo you criticized as bullshit because it happened to be on a semi-serious station. Guess what - I'm an entertainment personality just like you who happens to also provide interesting analysis and opinion of actual things."

...the results might have been a little different, but Cramer didn't even bother to make even a compelling self-defense, and thus the smug Stewart won with his retrospect and his air of indignity. I just don't get why Cramer would commit career seppuku in front of probably his biggest audience ever...and he didn't even bother to defend the statement critical of Obama that put him in the hot seat in the first place, because he could have won that debate as well. I just don't get it...

Not that I actually like Cramer much, but that was a fun rant to write although probably totally unnecessary...

[Right Wing Realist]

Can't talk reason to leftists, Michael. Explaining finance to them is like explaining Rembrandt to wombats.

[Hobo Chang Ba]

By the way, playing Cramer's most obscure and embarrassing gaffe and then wasting much of the interview trying to make Cramer look like the biggest douche in the universe while all the while claiming that "this is not about you" was a huge low blow. The playing field was already unfair with Stewart's audience, with his own sculpting of the dialogue and with his access to multimedia biased against him. It was a douche-y thing for Cramer to say, but it was even douchier of Stewart to rub some obscure gaffe from three years ago in his face in front of a hostile live audience and millions of viewers so he could avoid a fairer debate on whether Obama was actually contributing to the greatest destruction of wealth in the recent history of this country.

[CB]

The correct link to the Megan McArdle post is this:
http://meganmcardle.theatlantic.com/archives/2009/03/whats_the_matter_with_jim_cram.php

[Gilbert Martin]

"Gilbert, shut the fuck up. Let the adults talk."

Take your own advice, junior.

[Charlie (Colorado)]

Most people expect the President to lie; they don't expect "financial experts" to do the same.

I am so tired of the conflation of "can't foretell the future with 100 percent accuracy" with "lie". You mean "they're damned fools if they expect 'financial experts' to always be right."

[Pete]

So when they are looking for economists who got it right and warned about this collapse before it happened, I assume they aren't talking about the economists who have warned about the problems since mid-nineties with housing legislation, regulation, govt trying to micromanage the economy, loose fed monetary policy etc... They are probably talking about economists who woke up to the problems a few years ago but still don't recognize and/or acknowledge the root causes.

[L. Ron Hoover]

Cramer didn't fight back because he's a guilty liberal at heart.

[Mark Buehner]

Am i to understand that by listening to a cable show hosted by a sweaty man smacking plungers that make sound effects, I'm not only not guaranteed to make a future, but in fact I may even LOSE my investment?

This is shocking. The real question is why the Daily Show didn't break this incredible story sooner. Who is the REAL villain here?

[Kolohe]

Perhaps, but it would have been nice for the government had not given AIG billions of dollars and before undermining AIG's credibility.

It would have been nice for middle school girls to appreciate a dude's skills on Micropose's Gunship for the C-64 but that's not the world we live in.

Being less than a week away from total insolvency already undermined their credibility. As well as initial loan terms of LIbor plus 825 points - which for an institution like that is equivalent to most people going to a loan business endorsed by Gary Coleman. And finally the de facto (or de jure I've lost track) assumption of 80% of the company by the US taxpayer.

AIG was defunct. It was an ex-corporation. It was pinning for the fjords. The only reason, and a good reason, for doing what we did back in Sept was that the world financial system, and the bankruptcy system in particular, was not capable of handling the resulting mess - a hole that should be fixed but that's a separate issue.

The only mistake that was made was having any sort of 'exit strategy' for AIG, any hope that they could re-emerge from their situation in anything like their previous form. It needed to be clearer from the get go that the entire aim was an orderly transfer of pieces of the company to other entities and where appropriate complete liquidation.

[Pinko]

Haven't seen the fixCNBC site. Don't give a shit. Most of the people I know enjoyed the show for the fact that a non-journalist painstakingly laid out the template for doing reporting that holds someone accountable for talking out of their ass over the course of several years. That's emotionally satisfying for a lot of people. I wouldn't expect too many Reasonoids to understand that, but the Cramer apologetics and getting exercised about the little loony lefties that hide in all of your fucking closets and who done went and set up a website is really weak sauce. Really Moynihan!?! That's what you got out of the whole thing!? Cramer threw a hissy fit and decided to be the face of this whole thing. Tough shit.
And MNG, I almost always like your stuff, but Rush fucking Limbaugh? The guy who should be getting his ass pounded in prison right now? The send drug users up the river guy? He's a total fucking douche. No comparison. I'll be on the lookout the next time Stewart lobbies for draconian sentencing for a crime and then slimes his way out of getting caught committing said crime. Stewart ain't THAT much of hypocrite.

[jk]

George Will had some folksy wisdom (useful as a first line of defense, at least). To paraphrase Will:

Don't play poker with a man name Slim, don't buy a Rolex watch from a guy out of breath, and don't take financial advise from a man who shouts.

[Orion]

"Wait a minute, I'm confused. In the post below you guys are saying that Obama's wrecking the economy by saying things are going badly, but here you're arguing that people yakking on TV have no effect on the economy."

Obama is wrecking the economy by DOING things badly: Get it straight. Obama promises load up the government with more debt over 2 years than over the last 8 years and that included paying for a major regional war and occupation.

All Cramer is doing is pointing out the obvious: The new captain has decided to fix the leaks in the hull by drilling holes in the bottom of the ship to let the water back out.

[Groo]

Obama just said killing babies and small children is now OK. Bush was against it - that bastard.

Check out the great new website attacking people who are dumb and don't agree!
http://www.killingbabiesandsmallchildrenisok.com

[jk]

"By the way, playing Cramer's most obscure and embarrassing gaffe..."

Cramer had a show on LA's KFI radio station. Thankfully he's been replaced by the more sober Charles Payne. Cramer issued a strong don't buy warning on Google's IPO. How's that for another embarrassing gaffe?

[Schempf]

MNG,
Yes, Fannie Mae bought huge amounts of subprime loans - they were the largest purchaser from Ameriquest. "Enhanced" CRA requirements created a good chunk of the demand for subprime assets and Fannie securitized a lot of them.

[jt007]

Stewart's defenders don't have a clue. He is hiding behind the pretext of a "principled" objection to Cramer overhyping the stock market and failing to expose the Wall Street "corruption" that he is so certain caused this economic mess. None of that has anything to do with his attack on Cramer (who is a certifiable blowhard).

"Mad Money" has been on CNBC since 2005, Cramer made his Bear Stearns call (which Stewart focused on) in March of 2008, and CNBC has scores of other hosts and commentators on shows with larger audiences than "Mad Money". Nonetheless, Stewart's defenders would have you believe that it is just a coincidence that Stewart took CNBC to task several weeks ago and he randomly chose to focus on Cramer immediately after Cramer excoriated Obama for his inept handling of the economy. Cramer made his erronious Bear Stearns call a year ago and Stewart just coincidentally called him on it a year later but only a week after he criticized the messiah. Just a coincidence my ass.

Save the highfalutin' analysis of CNBC and its effect on average investors, Stewart's hissy fit has nothing to do with any of that. Stewart is as thin skinned as it gets and he hides behind the "it's just comedy" when it suits him. Stewart can't tolerate criticism of Democrat president who is as elitist and socialist as he is.

[mark l.]

i like cramer, but DO NOT FEEL SORRY FOR HIM.

he knew what he was doing when he went on the show. he had offended obama, and submitted to a very public assassination by obama's court jester.

cramer didn't even care that his rep was being torn to shreds, it was all about regret for bad mouthing the messiah.

cramer was once a marxist. he may no longer be one, but old sympathies die hard.

[Jha Khosla]

Take a look at Jim Cramer's MSFT recommendations over a 2 year period. You can see that he flip-flopped quit a bit and likely lost viewers money.

http://www.stocktagger.com/2007/07/jim-cramer-microsoft-corporation-msft.html

[MNG]

Commentators say that's what triggered the stock market meltdown and the freeze on credit. They've specifically targeted the mortgage finance giants Fannie Mae and Freddie Mac, which the federal government seized on Sept. 6, contending that lending to poor and minority Americans caused Fannie's and Freddie's financial problems.

Federal housing data reveal that the charges aren't true, and that the private sector, not the government or government-backed companies, was behind the soaring subprime lending at the core of the crisis.

Subprime lending offered high-cost loans to the weakest borrowers during the housing boom that lasted from 2001 to 2007. Subprime lending was at its height from 2004 to 2006.

Federal Reserve Board data show that:

More than 84 percent of the subprime mortgages in 2006 were issued by private lending institutions.

Private firms made nearly 83 percent of the subprime loans to low- and moderate-income borrowers that year.

Only one of the top 25 subprime lenders in 2006 was directly subject to the housing law that's being lambasted by conservative critics.

The "turmoil in financial markets clearly was triggered by a dramatic weakening of underwriting standards for U.S. subprime mortgages, beginning in late 2004 and extending into 2007," the President's Working Group on Financial Markets reported Friday."

[monkeyfan]

Well all this TV show BS back and forth has certainly convinced me of the veracity of my particular personal investment strategy.

Guns, ammunition, and firearms training.

[Russ R.]

"Russ, did you watch the clip? Stewart was picking on Santelli for calling all the sub-prime mortgage holders "losers". Some of these homeowners are indeed losers, in the sense that they gambled knowingly and lost. Plenty of others are clueless sheep. Now shorn. Calling them losers is a bit over the top."

Yes, I did watch the clip... live. So I'm fully aware of the context it was delivered in.

Yes, he used the term "losers". Admittedly a poor choice of words, but homeowners shouldn't be so damn sensitive. Whether they were speculators or investors, they still made losing investments.

Almost every deal will produce winners and losers. The markets work because winners are rewarded and losers take their losses. Having the government step in and punish the winners to reward the losers should concern you just a bit.

(Now, if the winners on the deal commited fraud, then of course the government should punish them, but it was usually the borrowers, and not the lenders that were doing the lying.)

Anyway, Santelli was just as angry about rewarding the losers at Bear Stearns and creating moral hazard. History proved him right.

When the government orchestrated a bailout or BSC, it set the stage for further disasters by protecting people from their mistakes and thereby encouraging less prudent behaviour.

Six months later, Lehman ended up going bankrupt because CEO Dick Fuld was convinced he would get the same bailout that Bear Stearn got. And why not? If Bear was too big to fail, Lehman was even bigger. He had plenty of opportunites to seek a buyer, raise more capital, or exit illiquid positions. He did none of the above because he expected a rescue.

The same story is now being written with regard to homeowners. If the government will bail you out if you're not paying off your mortgage... why would anyone in their right mind keep making their payments? Slow down a bit, claim that you need the help, and accept a government cheque. And unlike the corporate loans, these handouts have no obligations to repay the Treasury.

Sorry guys, I'm firmly siding with Santelli on this one.

[PM770]

Do any of the "talking truth to power" defenders of Stewart, et al. care to address Moynihan's point that maybe the ranking Dem on the House Committee of Financial Services (Frank) disproven comments from 2003 are more relevant than a CNBC talk show host?

Can you at least admit that the timing of the attack on Cramer prove that this is a concerted political attack, nothing more.

The attack on Cramer could have taken place any point in the last 9 months but came in the immediate aftermath of his negative comments regarding Obama's plan.

[lolTV]

Neither of these court jesters warrant any consideration. Cramer is a lousy analyst and a great loud mouth. Stewart is a fucking comedian with an army of writers to come up with snide remarks and quips. Giving either of these dipshits validity outside of the world of fart jokes, clown shoes, and bike horns, by arguing either side of their spat is as retarded as the argument itself.

Fannie and freddie along with every administration since FDR has been pushing for housing for everyone, regardless of future ramifications. The government set the model and then watched,and cheered deliriously, as the private sector took it for a joy ride putting everyone and their dog with a $50K income in a $250K house. Then when the morons, all of them, that risked everything failed, the government forces the financial responsible people to bail them out. The assholes in suits are just as responsible for misrepresenting MBS as the assholes in work boots that purchased a house they can't afford, a bass boat, two ATVs, a camper, and a Florida vacation every year on a $50K salary. All of this while Congress and former administrations are sitting on the sideline clapping like a helmet wearing retard screaming "MORE!! MORE!!" They all deserve to fail. Then maybe a small percentage of each group will realize where they went wrong and try to avoid a similar situation in 20 years.

How many assholes do we have on this ship anyhow?
I knew it. I'm surrounded by assholes.

[PR]

I see kolohe got back to me and is still claiming Fannie/Freddie never did no doc zero down loans. 100% Wrong. They did. I originated some of them. Stated Income Stated Asset Zero Down. They also offered true subprime loans to people with credit scores in the 500s. As far as doing 80/20, yeah you could do that, but they also offered full doc 100% financing up until March of 2007. BTW, Fannie and Freddie didn't discontinue 100% financing programs, the PMI companies refused to insure 100% loans any longer and that's what killed Fannie/Freddie 100% financing.

[mike]

1) Cramer is a scumbag and buffon. Even so, if you chose to watch his show "Mad Money" and after viewing, take his advice, that is your bad. Did you do any due dilligence? Check his record?
2) CNBC is positively annoying and with the exception of a handful of commentators (Santelli, Cashen), has nothing of value to say about anything. It shouldn't take you much more than one week of watching to realize this, in particular if you compare it to more serious financial press such as Bloomberg or the FT (in print).
3)Santelli was completely right in his rant from the pit and he captured the sentiment there that day just as he does most other days. The stimulus is a sham and those few who do get rewarded are mostly the least deserving.
4)Stewart is a partisan hack who attempts to simplify, black/white very complex issues even more than does CNBC. Did CNBC make the banks and insurers leverage themself 30-50x? Make them buy subprime CDOs? Sell CDS on multiple times the underlying? Did CNBC make the 'professionals' short these stocks without abandon? That JQ Publics IRA is down 50% has little to do with CNBC as much as I detest the channel.

[stuartl]

Almost every deal will produce winners and losers. The markets work because winners are rewarded and losers take their losses.

Russ R, this is wrong. On most deals, both sides are winners. The markets work because both sides should benefit from a transaction, and if a company makes too many losing decisions it goes down.

Back on topic, anybody that gets their political insight from a comedy show or their market advice from a loud mouth TV guy is a fool. Hearing about them bickering is a lot fun though.

[Jimmy L]

Fannie and Freddie don't originate ANY loans; what they do is work with banks to originate loans that meet F&F's requirements, then buy the mortgages and bundle them into securities. And, as somebody who worked directly with them to make these loans, that F&F had everything to do with it.

That being said, the default rate on even unqualifed homeowners is relatively low. It's the flippers, 2nd and 3rd mortgage based on incomeptent or corrupt apprasials, etc, that are the huge defaulters. However, none of that would have happened if it hadn't been for F&F's wildly inflating the market in the first place.

However, there will never be any serious public investigation of this, because of a defunct Fannie Mae program called American Community Funds (ACF).

[Tyler]

For the sake of entertainment I hoped that Cramer would at least stick up for himself. Look at his personality on Mad Money compared to how he looked during the interview. It was kind of pathetic and sad.

I decided to watch Mad Money yesterday even though I don't usually watch it. He was going on about how he thought that Obama's plan was so great, making sure to say "I hope he succeeds" right into the camera as if to specifically contrast himself with Rush Limbaugh.

Anyway, if he was criticizing Obama before, he has made a complete about face. Whether you like Jon Stewart or not, he really got to Cramer, and Cramer hardly put up a fight.

[Lamar]

Somehow I don't think Stewart would come off as such a hero if he chewed out Maria Bartiromo.

[Citizen Nothing]

I love CNBC. It's the ESPN of finance and investing. But I wouldn't rely on Dicky Vitale's advice when calling my bookie.

[hmm]

"That being said, the default rate on even unqualifed homeowners is relatively low. It's the flippers, 2nd and 3rd mortgage based on incomeptent or corrupt apprasials, etc, that are the huge defaulters."

*Not disputing or arguing the claim*

I never considered the impact of the "flipper" market on the housing bubble outside of a parasitic relationship. The idea makes sense, but was the industry big enough to significantly effect the housing market? Do you have any data dealing specifically with this?

I have information on the corruption or escalation of appraisals. I'm more interested in the actually "flippers" and their financing.

[Hugh Jass]

Why do people insist on stating that "CNBC didn't cause the financial crisis" when no one is saying that it did? Stewart's point was simply that he expects the media -- in this case, the financial media -- to do a better job, stop cheerleading and find a way actually to inform the viewers of what's going on.

What's so objectionable about that?

[Mo]

The attack on Cramer could have taken place any point in the last 9 months but came in the immediate aftermath of his negative comments regarding Obama's plan.

Actually, the attacks on CNBC came after Santelli canceled on him. Stewart was pretty brutal on Al Sharpton when Sharpton canceled on the show. Including a great bit where Stewart interview Stephen Colbert pretending to be Al Sharpton. He started attacking Cramer because Cramer whined to the rest of the NBC family about being picked om by a comedian.

[R C Dean]

The economy is fine. R.C. Dean (he has to change that name) assured me that the middle class is not struggling, and that this whole mess is just one big misunderstanding.

I take it you haven't googled my nom de blog, Implosion.

I've never said the whole mess is one big misunderstanding. I do maintain that the vast majority of the middle class is unaffected by this, with the exception of their retirement portfolios.

Very few people, especially outside a handful of real estate bubble states, have lost their homes. Nearly everyone in the middle class is either renting or making their payments.

Unemployment is still in the single digits, and mostly affects either a very few industries (financial industries at the top of the list) or workers at the bottom (as always). Nearly everyone in the middle class still has their jobs.

No, the real damage here is to (a) portfolios that people aren't relying on for day to day living and (b) the economic and social future of this country, when inflation and increasing state control come home to roost beginning next year.

This is a financial crisis that the Obama administration has been surprisingly candid about exploiting to advance their agenda of increased dependency on, and control by, the state.

[Jesse Walker]

Can you at least admit that the timing of the attack on Cramer prove that this is a concerted political attack, nothing more.

Er, no. His first attack on CNBC was "timed" to appear after Santelli's famous rant. (You can tell because it's framed as...a response to Santelli's rant.) One of the people in the CNBC video -- Cramer -- then wrote a column accusing Stewart of taking something he had said out of context. Stewart "timed" his subsequent attacks on Cramer to appear after that article. (You can tell because it's framed as...a response to that article.)

[Tony]

Every credible assessment of the financial crisis does not place blame on Fannie Mae and Freddie Mac. Only rightwing blowhards shilling for a Republican party with its tail between its legs continue regurgitating this nonsense, which is just another iteration of the right's "blame poor black people for everything" shtick.

[mark l.]

"Every credible assessment of the financial crisis does not place blame on Fannie Mae and Freddie Mac."

aig 'only' got 170 billion.

fannie mae and freddie mac have recieved 100 billion a piece.

Tony:
200 billion>170 billion.

[Tony]

So?

[mark l.]

tony-

your argument is akin to something like this...

you are blaming the person who got typhoid from 'typhoid mary', for not washing their hands. your 'typhoid mary' is without guilt?

find 'patient zero' among the financials.

if fannie and freddie had chosen to refuse the loans, becuase they would never be repaid, there would have been no subprime loan failure.

the financials accepted the opinion of fannie mae and freddie mac, on the solvency of the subprime loans. Both were mistaken, but one was the gatekeeper.

take a guess which one.

[mark l.]

"In January 2007, as years of loose mortgage lending were about to send the nation's housing market into devastating decline, Fannie Mae chief executive Daniel H. Mudd wrote a confidential memo to his board.

Discussing the company's successes, Mudd said one of Fannie Mae's achievements in 2006 was expanding its involvement in the market for subprime and other nontraditional mortgages. He called it a step "toward optimizing our business."

A month later, Fannie Mae outlined plans to further expand its activities in the subprime market. The company recognized the already weak performance of subprime loans but predicted that they would get better in 2007, according to another Fannie Mae document.

Internal documents show that even late in the housing bubble, Fannie Mae was drawn to risky loans by a variety of temptations, including the desire to increase its market share and fulfill government quotas for the support of low-income borrowers."

http://www.washingtonpost.com/wp-dyn/content/article/2008/08/18/AR2008081802111.html

you need to read more stuff outside liberal talking points.

[mark l.]

tony-

don't you wonder why the house can convene hearings on steroid abuse in baseball, but have yet to hold a hearing on a 2-3 trillion dollar bailout of the financial system?

here's a clue:
Robert Rubin was the head of citi...
the same robert rubin who was the 'architect of the boom of the 90's'. The same rubin who is the political benefactor of both geithner and larry summers.

Don't hold your breath waiting for ANY public castigations or hearing for the CEO's of the big firms, stemming from the dems.

[PM770]

Mo @ 10:54 &
Jesse @ 11:01

While the original tit-for-tat with CNBC may have been initiated earlier, the point of it being a political attack still holds because the Santelli rant was critical of new administration policy. Doesn't Santelli have a history of "rants"?

If Stewart, et al.'s is legitimate concern over the way the financial pundits give bad investment advice why not clobber them back in the fall.

[PM770]

Tony @ 11:22

Any assessment that does not put at least partial blame on Freddie Mac and Fanny Mae lacks credibility.

Both sides like to tout their pet causes and they are all partially correct (and partially incorrect by omission).

Yes the credit default swaps and all manner of financial derivatives were a large part of this mess. Sub-prime lending played a significant factor in this as well.

Low interest rates with lenders doing interest only and in some more extreme cases negative amortizations contributed to a housing bubble that was unsustainable once the rates started to rise. And once the rates started to rise the momentum of the downward pressure on housing prices could not be stopped by simply lowering rates again.

Of course Freddie & Fannie are not the sole causes, but they contributed to this.

[jasa]

Russ:
Almost every deal will produce winners and losers.

What Stuart said @9:48, but there's more to it. As far as sub-prime mortgages go, both participants in this deal were losers. I think you'd agree that the third party (taxpayers) collateral damage was severe as well.

When low income, low financial savvy home buyers (the proto-typical sub-prime consumer) are enticed to invest their meager savings into a home, with "ninja" loans and the like (see PR@9:27), it smells like fleecing the marks on the midway to me. Considering that these were zero down loans, the mark's savings went straight down the rat hole of "loan origination fees".

This is not to say I want to bail out all the sub-prime holders. I don't. I just recognize hypocrisy when I see it.

Santelli was just as angry about rewarding the losers at Bear Stearns...
Good on him.

Calling the mortgage bailout plan stupid? Fine by me. Calling all the sub-prime holders "losers"? Classless hypocrisy.

Mark@12:01 & 12:09 Good stuff.

[YouAllMissedIt]

You all missed the crux of why this happened.

Nielsen's first "sweeps" period for 2009 is?
You guessed it March 5 to April 1.

This all began on?
Yup, March 4.

Suckers?

Ya'll been played.

[D. Saul Weiner]

Tony:

"Every credible assessment of the financial crisis does not place blame on Fannie Mae and Freddie Mac. Only rightwing blowhards shilling for a Republican party with its tail between its legs continue regurgitating this nonsense, which is just another iteration of the right's "blame poor black people for everything" shtick."

Perhaps you have not read the testimony Ron Paul presented to the House Financial Services Committee on 9/10/2003.

"The special privileges granted to Fannie and Freddie have distorted the housing market by allowing them to attract capital they could not attract under pure market conditions. As a result, capital is diverted from its most productive use into housing. This reduces the efficacy of the entire market and thus reduces the standard of living of all Americans.

Despite the long-term damage to the economy inflicted by the government's interference in the housing market, the government's policy of diverting capital to other uses creates a short-term boom in housing. Like all artificially created bubbles, the boom in housing prices cannot last forever. When housing prices fall, homeowners will experience difficulty as their equity is wiped out. Furthermore, the holders of the mortgage debt will also have a loss. These losses will be greater than they would otherwise have been had government policy not actively encouraged overinvestment in housing".

Was Paul just shilling for the Republican party back in 2003 when he voiced these warnings and it was in power? Or was he shilling for them when he wouldn't support McCain for president?

[\"Markets Are Magical!\"]

"This is a financial crisis that the Obama administration has been surprisingly candid about exploiting to advance their agenda of increased dependency on, and control by, the state."

It's like a script.

How many hours do you get on those batteries?

[\"Markets Are Magical!\"]

"Was Paul just shilling for the Republican party back in 2003 when he voiced these warnings and it was in power? Or was he shilling for them when he wouldn't support McCain for president?"

Wow, you managed to come up with one, rogue example, and that example just so happens to be Libertarian messiah Ron Paul.

Are we supposed to believe that the rest of the Republican Party is/was full of Ron Paul's?

Here's a lesson: Cherry picking is still cherry picking when a Libertarian fanboy does it. The information doesn't suddenly become more relevant when a Libertarian leaning person recites it to you.

It's over. It's time to rebrand. Every movement has had to. Carrying on in the manner that you are now, is not going to win you any favors.

[D. Saul Weiner]

Just because any number of Republican whores may be beating up on Fannie or Freddie for political purposes does not absolve those organizations (and their supporters in government) from their share of the responsibility for the economic crisis. The argument stands on its own basis.

I am not looking to win any favors. In fact, I would like to see the political system stop giving out favors at all and instead provide justice. I do not expect that to happen, though. I expect a spectacular collapse.