Sorry to be a little late to the party on the Fannie/Freddie debacle; I managed to burn my right middle finger rather spectacularly last night on a pot handle, and though JP Freire, the American Spectator's MacGyver-like managing editor, rapidly sped to the rescue with a silicone oven mitt full of ice, typing is still somewhat slow.
Back to Fannie and Freddie. For those who haven't been following along at home, last night, in another "Sunday Save", the Fed and Treasury announced that they stand ready to bail them out. For years, there's been a moderately lively debate over whether Fannie and Freddie's status as Government Sponsored Entities (GSEs) means that the government has implicitly guaranteed their portfolios. Those who have wasted hours arguing this burning question in the nation's bars and debating clubs can settle up your bets and argue no more: it does indeed. As Clive Crook says:
US taxpayers are about to find out what their long-standing and (strictly speaking) non-existent guarantee of Fannie Mae and Freddie Mac will cost them. One way to think of it is this: take the US national debt of roughly $9,000bn and add $5,000bn. Not bad for an obligation still officially denied.
Steven Bainbridge adds:
Fannie and Freddie should have been fully privatized years ago, so that they were subject to market competition; alternatively, although less ideally, they should have been brought back into the government to be regulated more effectively. Leach was right that leaving them as they were was a disaster waiting to happen. And now it looms larger than ever, with potential disastrous implications . . . Want a worst case scenario? The government takes over Fannie and Freddie. The immense increase in the national debt causes the bond rating agencies to cut their rating of Treasury securities from their traditional AAA. Along with other economic problems (whether its mostly whining or not), this spooks investors, especially foreign investors. Foreigners abandon the dollar for the euro, dumping treasuries. The collapse of foreign investment in Treasuries makes our massive current account deficit unsustainable. At which point, things really go to pot.All because our leaders in Washington failed on a bipartisan basis to address the problems at Fannie and Freddie. Why didn;t they do something? Because Fannie and Freddie bribed them and because they’re petrified of being painted as anti-consumer, as even the Times finally noticed . . .
Arnold Kling also has some rather pungent commentary:
1. For some reason, I am reminded of a Vaudeville scene in which firemen are squirting hoses at the set to try to put out an apparent fire, and management comes out on stage to say, "Don't worry, folks. It's all part of the act." My point is that it's very important at this time for people like Treasury Secretary Paulson and Fed Chairman Bernanke to make it seem like they know what they are doing.2. It seems as though nobody wants to admit that the FM's are done for. Yet the new proposal on the table to have the government back more of the firms' debt and perhaps buy equity is so radical that I have to assume that there is no returning to the status quo.
3. If you could do it over again from a regulatory perspective, you would want to see the FM's market shares a lot lower and the market shares of other institutions, notably banks, a lot higher. I have to assume that this will be the thrust of policy going forward. It's just not something that is going to happen tomorrow.
4. I used to work at Freddie Mac, in the late 80's and early 90's. Back then, the capital regulations gave the FM's an advantage over banks in holding low-risk mortgages. We understood that, and we stuck to low-risk lending. As times changed, and the market shifted to high-risk loans, it would have been logical for the FM's to say, "This is not our market," and allow their market shares to drop. But top management, at least at Freddie, is pretty green (I'm not sure they could spell "mortgage" when they took over in 2003. When friends of mine described the behavior of the new management team, I decided to sell my Freddie Mac stock. This was at least four years ago.). Between that and government pressure to provide "affordable housing," the FM's decided that they needed to get on the subprime bandwagon rather than stop it.
5. A fundamental debate in economics is between central planning and the spontaneous order of the market. The collapse of the FM's, and of the housing market in general, can be viewed as a failure of central planning. Unfortunately, the dynamics are such that when central planning fails, you typically get more central planning.
In my view, the central problems with FM/FM are two:
1) Because they are government sponsored, the government let them get away with practices that would never fly in the private market. Contrary to the belief of many on the left, this is par for the course; just take a look at what's happening to state and local government pensions now that the federal government has forced them to account for their liabilities like normal pension funds do.
2) They are too big not to fail. Their mortgage portfolios cover so much of the market that any significant problems in the mortgage market will make them technically insolvent as soon as they mark their securities to market. Any attempt to clean up their portfolios, by, for example, selling off some of their underperforming securities, will move the MBS markets against them, making the problem worse.
It's not clear that bringing them fully into the government is even a second- or third- best solution; the government is not set up to be a hedge fund, nor should it be. Once the immediate crisis is over, it's time to strip their GSE status and break the companies up into less risky firms.
Of course, that's easy for me to say, sitting here on my couch in my comfy pajamas. Actually doing this is going to be a monstrous messy task.
Such interesting times. I guess I'm wondering what would happen if the government decided to let the big boys fail. Any guesses? I think it would be fun to watch them fail, and then throw the whole privatize social security because the "market always wins" back in the Republican's faces.
Funny how the Fed and Treasury guys are mostly made up of Republicans and Bush appointees.
Never privatize the profits while socializing the rish. What is worse is that Congress in the name of stealing (there is always stealing involved when it comes to Congress) and braying like jackasses (there is always braying as well) about the American dream of owning a home, refused any sort of oversight for years and helped prop up the price of homes to artificially high levels. Fannie and Freddie Mac were dream programs for your typical slobbering member of Congress. It got his buddies and staff members rich while letting him bray on about how he is helping people live the American dream and also propped up the value of middle class voters' homes. It was just perfect.
It's too bad you're no longer in NYC; I think you qualify for disability if you lose the use of your right middle finger.
Because they are government sponsored, the government let them get away with practices that would never fly in the private market.
Megan, I'm curious about what you mean by this. Examples? Specifically I'm curious about how you would respond to Tanta's post this morning that seem to imply that regulatory constraints actually helped the GSEs from taking on nearly as much toxic waste as their private counterparts.
Daniel,
I'll bet Megan's never heard of non-conforming loans. Hey, if you're a libertarian no need to worry yourself with "facts" and "research". Baseless assertions is all that's needed to run a blog on the Atlantic.
"1) Because they are government sponsored, the government let them get away with practices that would never fly in the private market."
Yeahhhhh...unlike such closely monitored and regulated private entities as Countrywide, Indymac, Bear Stearns, dozens of other banks/s&l's going belly up this year, etc., etc., etc.
Daniel Hall:
I am surprised she didn't mention Chuck Schumer's role in the Freddie and Fannie mess.
Independent George:
I am more worried about her hanging out with someone that works at The American Spectator. It's one of the worst cases of wingnut welfare. I didn't know Libertarians believed in welfare.
Freddiemac, to attribute market dynamics to the current debacle concerning your namesake and it's sibling Fannie is rather like saying "deregulation" was responsible for the California electricity mess of a few years ago.
People from across the political spectrum have been warning of this debacle for years, and the reason why nothing was done to prevent it was because Freddie and Fannie bribed members of Congress, to ignore the problem, and leave in place an implied government guarantee. What has that have to do with markets?
Also, to attribute this as being more the result of the malfeasence of the Republican Party than the malfeasence of the Democratic Party is simply disingenuous.
Regarding government guarantees of bank deposits; in today's world, where government securities could be easily purchased and sold on line with minimal transaction costs, what is their purpose? Rather than having a bank deposit backed by a taxpayer guarantee, why not just have people who want their savings guaranteed by the U.S. taxpayer cut out the middleman and buy, say, instruments that mature in 30 days, or even less?
This bailout of Freddie and Fannie counterproductive. Another congressional initiative, the Mortgage Bailout, will tax Freddie and Fannie to the tune of $530 million/ YEAR. So Congress wants to bail out an institution and tax it as well? What’s going on? Call your senators/representatives and tell them: Back off the Mortgage Bailout Bill and Back off Bailing out Fannie and Freddie Mac!
http://www.freedomworks.org/newsroom/press_template.php?press_id=2585
Blue Dog House Contact info:
1-866-887-5841
http://www.freedomworks.org/newsroom/press_template.php?press_id=2580
Yeahhhhh...unlike such closely monitored and regulated private entities as Countrywide, Indymac, Bear Stearns, dozens of other banks/s&l's going belly up this year, etc., etc., etc.
That's the point. It's not that private entities never do naughty things. If private entities do enough naughty things then they go away. And getting bought out for pennies on the dollar while leaving shareholders with nothing qualifies as going away.
What do you think of Paul Krugman's column today? Fannie, Freddie and You
You quote Kling as saying:
Between that and government pressure to provide "affordable housing," the FM's decided that they needed to get on the subprime bandwagon rather than stop it.
Paul Krugman:
Also, they didn’t do any subprime lending, because they can’t: the definition of a subprime loan is precisely a loan that doesn’t meet the requirement, imposed by law, that Fannie and Freddie buy only mortgages issued to borrowers who made substantial down payments and carefully documented their income.
So whatever bad incentives the implicit federal guarantee creates have been offset by the fact that Fannie and Freddie were and are tightly regulated with regard to the risks they can take. You could say that the Fannie-Freddie experience shows that regulation works.
In that case, however, how did they end up in trouble?
Part of the answer is the sheer scale of the housing bubble, and the size of the price declines taking place now that the bubble has burst. In Los Angeles, Miami and other places, anyone who borrowed to buy a house at the peak of the market probably has negative equity at this point, even if he or she originally put 20 percent down. The result is a rising rate of delinquency even on loans that meet Fannie-Freddie guidelines.
It's difficult to understand exactly what is going on.
The insolvencies/bailouts have only begun. Remember, we are in a mess before the onset of an actual recession. This is looking scarier by the day.
Below is from some MarketWatch article from early 2007. Unless I'm missing something, tt seems to suggest that Freddie was deeply into subprime despite what Krugman may claim:
For its part, Freddie Mac said Tuesday that it would stop buying those mortgages that have "a high likelihood of excessive payment shock and possible foreclosure." Instead, the company plans to buy only subprime adjustable-rate mortgages, and securities backed by such loans, that have been qualified at the fully indexed and fully amortizing rate.
Freddie Mac also said it would limit the use of loans that don't require income verification or other documentation, and will recommend that lenders collect adequate escrow for taxes and insurance payments.
http://www.marketwatch.com/news/story/freddie-mac-toughens-subprime-standards/story.aspx?guid=%7B3F839423-9407-4ED0-9351-4999979A647C%7D
Will Allen,
Where did I ever make the claim that Fannie and Freddie were or weren't in trouble due to market dynamics? I don't see that I made a claim either way in this thread. As far as Republican malfeasance goes, I believe the claim I made was that the architects of the bailout are Republicans or Republican appointees by and large. You seem to have trouble understanding what I wrote. Re-read my post and see again, you'll realize that you did not understand my words.
Krugman is certainly wrong about Freddie and Fannie only buying loans which involved substantial downpayments. For years, Freddie and Fannie were certainly buying loans with as little as 5% down, and I believe sometimes as little as 3% down. I've been out of contact with the industry long enough to be ignorant as to whether Fannie and Freddie ever got involved in purchasing low or no documentation loans, and if they did, what sort of downpayment was required for them.
Well, freddiemac, perhaps I misunderstood the nature of the nonsequitur regarding "the market always wins" remarks. Having people retain individual ownership of a percentage of the payroll taxes deducted from their paychecks has nothing to do with the topic of this thread. Nor does the fact that Republicans mostly dominate the Treasury Department and Fed eight years into a Republican Administration.
One of the things that has been undereported in this mess is the role of mortgage insurance companies. One would think that at least some of them would be going belly up pretty soon. Perhaps I'll go check their stock prices.
Will Allen,
My remarks were not nosequiturs. Since I need to expound:
1. Fannie and Freddie's oncoming collapse or bailout will certainly lower the market. More evidence against privatizing social security.
2. A lot of conservatives have clamored against bailing out Fannie and Freddie, as evidenced by this thread. Remember who the architects of that bailout are: Republicans.
I get the feeling you are being antagonistic due to partisan issues. Is this correct?
Addendum: Indeed, the mortgage insurance companies are doing poorly. GE was one of the largest mortgage insurers, and I can tell you their stocks have been clobbered. There was a to-do a few months back about the companies that insured the risk for mortgage insurers not having ample liquidity. It largely blew over, but I'm sure we'll hear from them again real soon.
Looking for some brighter signs, I read recently that the Minneapolis/St. Paul market, which was certainly among the more frothy ones at the peak, seems to have stabilized.
Freddiemac, I was unaware that people who advocated that people retain inividual ownership in a prcenatge of payroll taxes deducted from their paycheck had asserted that the market would never fluctuate downwards, or that the percentage of the payroll tax deduction in which individual ownership would be retained had to be 100% invested in equities, no matter the age of worker.
I really don't keep track of who is a "conservative" in this forum, and in fact, I deliberately try to avoid using the terms "conservative" or "liberal", since I think the terms are so vague as to be meaningless. Thus, your second point is meaningless to me. I think it unremarkable that eight years into a Republican Administration that Republicans would be the political appointees suggesting taxpayer supported relief for the debacles known as Fannie Mae and Freddie Mac. If John Kerrey had won in 2004, I suspect Democratic appointees would be doing so now.
Also, I think GE spun off their mortgage insurance unit as part of Genworth. I'm not sure what percenatge of Genworth stock is retained by GE shareholders.
Freddie, Will -
Please chill out.
Megan -
Please respond to Tanta's post (see Daniel Hall's comment at 11:58) claiming that regulation is to be credited with minimizing this blowup rather than blamed for creating it.
Clive Crook, for his part, is trafficking in hysterics.
It's a big problem, but the "bail out" certainly isn't going to be to the tune of all of FnF's backings. Seriously, it'll be a % of that 5 trillion. Which granted will still suck, but it ain't 5 trillion.
I saw Jamie Dimon the CEO of JP Morgan on Charlie Rose the other night and he was saying how hard it is to resist the pressure to grow. He said that to grown: "one often needs to take on bad clients or unacceptably large amounts of risk."
The problem from Mr. Dimon is the market can remain irrational longer than he can keep his job. I wonder what (if anything) can be done (from a corporate governence perspective) to protect those who advocate for prudence.
Just want to take on one comment by Freddiemac:
Freddiemac writes:
"1. Fannie and Freddie's oncoming collapse or bailout will certainly lower the market. More evidence against privatizing social security."
The alternative to "privatizing social security" is the supposed risk-free approach of having the government fund social security through bonds. For those playing at home, what happens to the value of our treasuries when the federal government chooses to explicitly take on trillions of dollars of liability by coming to the rescue of Fannie and Freddie?
Golly, more evidence against socializing social security...
"The alternative to "privatizing social security" is the supposed risk-free approach of having the government fund social security through bonds."
False dichotomy.
The alternative is not robbing the Social Security fund and therefore making it insolvent. Typical dishonest conservatism.
Freddiemac,
One might rob the current income stream, the payroll tax, but the fund itself is immune to robbery, the thief has already taken the "funds".
Some call it "outright thievery"
http://www.nysun.com/opinion/stopping-the-social-security-raid/50792/
Freddiemac:
1) I'm not a conservative.
2) You have displayed excellent point-missing skills. Do you understand what happens when the government takes on more liabilities? Have you heard of inflation? To perceive no meaningful risk to having the government controlling 100% of the social security purse strings is to be rather obtuse.
I'm tempted to call your response "typically stupid liberalism" except that I count plenty of smart liberals among my closest friends, so I see nothing especially typical about your cluelessness or about your immediate resort to ad hominem "argument."
Does anyone know why two entities controlled 50% of the secondary mortgage market? Is that the natural market structure (as it is with heavy indurstry or transportation) or is that an artifact of the regulatory scheme? Could we be safer in the future if the government nationalizes these two and breaks them up into 600 little pieces, all subject to generally accepted accounting principles?
"1) I'm not a conservative."
Congratulations.
"2) You have displayed excellent point-missing skills. Do you understand what happens when the government takes on more liabilities? Have you heard of inflation? To perceive no meaningful risk to having the government controlling 100% of the social security purse strings is to be rather obtuse."
I've heard of inflation. You seem to be suggesting that inflation is based somehow on government funding social security. Proof?
"I see nothing especially typical about your cluelessness or about your immediate resort to ad hominem "argument.""
Right, except you began the ad hominems. Your are either stupid or hopelessly hypocritical (sorry Megan, he asked for it). Go read what I wrote, and then what you wrote, then go kill yourself to save the gene pool.
An article in the Wall Strret Journal WSJ today noted that the prices of the 10 year bond sank Friday; interest rates rose. This was in anticipation of the FMs being added in some fashion to the national debt, $4.5 trillion to be added to ~ $9 trillion. The, pigeonholed for being merely 'conservative' by a commenter here, WSJ has called for years for limitations on the FMs business. This was opposed by the Democrats; they 'care' and beside Mr. Johnson, formerly chair of the VP selection committe for BHO, and other 'caring' connected individual wouldn't staned to make the $123 million dolar payday he did. Whether we "care" or 'have audacious hope' or not our debt service is going up.
Craig, on July 14, 2008 at 12:59 PM said:
"That's the point. It's not that private entities never do naughty things. If private entities do enough naughty things then they go away. And getting bought out for pennies on the dollar while leaving shareholders with nothing qualifies as going away.
"
Look at what Meghan said.
Meghan said: "Because they are government sponsored, the government let them get away with practices that would never fly in the private market. Contrary to the belief of many on the left, this is par for the course; just take a look at what's happening to state and local government pensions now that the federal government has forced them to account for their liabilities like normal pension funds do."
Which is just so erroneous in so many ways.
1. What's happening with Freddie and Fannie is not due to them being less regulated or monitored than any of the private financial entities that are or will soon be floating at the top of the fish tank. Did Freddie and Fannie get away with anything that Countrywide, BofA, Indymac, Bear Stearns, etc. were not also involved with? Or did all of them just make some stupid decisions that they could all get away with in the current regulatory environment?
Remember the S&L crisis during G.H.W. Bush? Were they over-regulated or under-regulated. Were they allowed to fail? Maybe they were according to Craig's way of thinking. However, that "failure" certainly led to a multi-billion dollar bailout by the taxpayer.
I love it when the keep government out of the marketplace crowd talks about letting business rise and fall on its own tide. Unfortunately the hypocritical bastards always come running to the government for money when they fuck up. Always.
2. Meghan slams state and local government pensions as if they are the only pension plans that have had problems. Some of their problems were due to changes in accounting rules. Some were due to outrageous benefit increases that any sober person would know there was no way they can be financially met. Does Meghan really believe that this is only a problem with government pensions? Wasn't it just a year or two ago that there was a lot of concern that the government agency that backs private pensions was going to go bust due to pension failures in the private sector? How often have the major American auto companies had to restate earnings or take write downs due to their effing up their pension funds? How many other Fortune 1000 companies have similar problems?
Actually there are many state and local pension systems that are in fine shape.
Whether something is a government run "thing" or a privately run "thing" really does not mean too much - contrary to the thinking of so many on the right. The notion that a private sector "thing" is ipso facto superior to a government run "thing" is just silly.
Stupid is as stupid does. Government does not have a monopoly on stupidity.
Whether something is a government run "thing" or a privately run "thing" really does not mean too much - contrary to the thinking of so many on the right. The notion that a private sector "thing" is ipso facto superior to a government run "thing" is just silly.
There is a body of economic theory on comparative institutional behavior that does offer models for systemic underperformance by public agencies in the provision of goods and services that can be generated by private enterprise (which not every service can be). Much obliged if you would provide a citation to the empirical research which refutes this and the theoretical literature that delineates contrary models. Methinks the political elites which presided over command economies in the East bloc and those which presided over mixed economies with a large measure of state-owned industry (e.g. Britain) might have elected to dismantle these edifices for some reason more substantial than ideologically-induced addlement.
It doesn't seem that long ago that certain members of Congress were proposing dramatically expanding the roles of the GSEs.
Also, what percentage of senior execs at the GSEs have been well-connected former pols like Franklin Raines (who of course was forced out of Fannie Mae '04 after OFHEO found "accounting irregularities")? Might that have something to do with all the rope the GSEs have been given?
More broadly, it's amazing how much damage has been done due to the bipartisan zeal for pushing home ownership percentages up to unrealistic levels.
freddiemac:
Alright, I know that this has at least been covered before at Asymmetrical Information, but apparently it needs to be reiterated:
There is no Social Security "fund". It is, and always has been (since the Democrats started the thing) an accounting fiction. The "fund" is, and always has been, held in bonds that the government issues to itself--i.e., the Federal government loans itself money. Calling this a "fund" is like taking a ten-dollar bill out of your left pocket, putting into your right, putting a $10 IOU to yourself back into your left pocket, and saying that you now have $20.
Does anyone know why two entities controlled 50% of the secondary mortgage market?
There was a strong (and apparently correct) assumption that Fannie and Freddie would not be allowed to fail. This allowed them to price risk lower than any fully private bank for a long time because of their "government guarantee" The result is that they could offer lower interest rates on loans than anybody else who qualified according to the regulations. From 2003-2006 this all changed because the underwriting standards were so poor (low doc, subprime etc.) that Fannie and Freddie were not able to offer similar loans due to the regulations in place. Once the credit started to contract in 2006, Fannie and Freddie were heavily encouraged to "fill the gap" and they took over the market again.
Here's some more pungent (and astute) commentary on Fannie and Freddie, via Steve Sailer: Treasury Announces Bailout Plan for Fannie and Freddie.
The rest of it is an interesting read, especially the parts about how Fannie and Freddie used the noble-sounding goal of making home ownership affordable to poor and minority communities as a way to take on additional risk by lowering down payment requirements, etc. Looks like ACORN, the Urban Institute, and other far Left groups were partly to blame for this mess.
Certainly not all, but some of the blame should rest on the bipartisan consensus to social engineer the home ownership rate above the 64 percent level
If anyone's been making this point lately, I've missed it: surely the government is much to blame for so heavily distorting the housing market? You factor in ALL the things it does to force people into houses so they'll be good citizens -- the sacred mortgage interest deduction, the cap gains tax break on selling, the 1st-time homebuyer IRA distribution, the very institution of FNMA and FDMC and all the other alphabet soup.
All this help and market distortion -- of course houses are going to get overpriced and too many people are going to buy them. How many renters have been told we are idiots for "wasting" our money? How many young people are told by their elders and friends that they absolutely have to buy a house -- better yet the most expensive one they can possibly qualify for -- as soon as possible or else they are stupid?
If the "FM's" tumble and fail, this side issue should work itself out. But if they end up being 'saved' by politicians [at our expense] it MUST be on condition the bulk of the management teams are sent packing. Otherwise no one pays the penalty for terminal stupidity, and nothing is learned.
Going way back in this comment thread, why does anyone read Paul Krugman any more? For that matter, why read anything out of the New York Times at all? They're so clearly totally lost when it comes to reporting or analyzing the news that they might as well joint the tabloids in discussing alien invasions.
Yes, the FMs were heavily involved in the subprime market. Krugman is a demagogue.
"Funny how the Fed and Treasury guys are mostly made up of Republicans and Bush appointees."
Funny how the FMs that are actually failing were run almost exclusively by Democratic Party hacks.
"Funny how the Fed and Treasury guys are mostly made up of Republicans and Bush appointees."
Funny how the FMs that are actually failing were run almost exclusively by Democratic Party hacks.
"...just take a look at what's happening to state and local government pensions now that the federal government has forced them to account for their liabilities like normal pension funds do."
They may have to "account for their liabilities", but that won't come close to solving the problem.
The rock bottom problem here is that those entities will simply roll the new costs into their budget, declare a shortfall, and try to raise taxes to cover it.
Got that? They're going to raise taxes on US. We, who will be scrimping by on our pitiful social security benefits (if it lasts). WE will be told WE have to pay for overly-generous pensions for the same people that squandered our social security funds. If you need more to become outraged, throw in the fact that they've largely exempted their pensions from state taxes.
Gee, at least Britain's royal family is only a few dozen people. Here in the good ole USA we now have a privileged class of MILLIONS who've made themselves entitled to the public treasury to fund lifestyles the rest of us can't afford. (Well, if we can...they demonize us!).
STOP PAYING TAXES AND MARCH ON WASHINGTON. THROW OUT ALL THE CROOKS. THAT MEANS ALL.
STOP PAYING TAXES AND MARCH ON WASHINGTON. THROW OUT ALL THE CROOKS. THAT MEANS ALL.
STOP PAYING TAXES AND MARCH ON WASHINGTON. THROW OUT ALL THE CROOKS. THAT MEANS ALL.
STOP PAYING TAXES AND MARCH ON WASHINGTON. THROW OUT ALL THE CROOKS. THAT MEANS ALL.
STOP PAYING TAXES AND MARCH ON WASHINGTON. THROW OUT ALL THE CROOKS. THAT MEANS ALL.
STOP PAYING TAXES AND MARCH ON WASHINGTON. THROW OUT ALL THE CROOKS. THAT MEANS ALL.
STOP PAYING TAXES AND MARCH ON WASHINGTON. THROW OUT ALL THE CROOKS. THAT MEANS ALL.
STOP PAYING TAXES AND MARCH ON WASHINGTON. THROW OUT ALL THE CROOKS. THAT MEANS ALL.
STOP PAYING TAXES AND MARCH ON WASHINGTON. THROW OUT ALL THE CROOKS. THAT MEANS ALL.
Essentials to 'democracy' and 'capitalism':
1.) Propaganda: 'The right to own a home' .
2.) Form FRE and FNMA i.e. a good way to shove debt down people's throats and corner the mortgage market.
3.) Collect interest, pay your execs and payoff the politicians so you can lever your profits to the moon.
4.) Have your rich buddies on Wall St join the party and create CDOs on everything so they can join the yield party and shove more debt down people's throats car loans, credit cards, helocs etc etc.
5.) Make enough long before it blows up.