{"id":4576,"date":"2008-09-22T09:55:09","date_gmt":"2008-09-22T16:55:09","guid":{"rendered":"http:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/?p=4576"},"modified":"2008-09-22T09:55:12","modified_gmt":"2008-09-22T16:55:12","slug":"what-happened-fannie-mae-and-freddie-mac-exploded-and-many-bystanders-were-injured-in-the-blast-some-fatally","status":"publish","type":"post","link":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/4576\/what-happened-fannie-mae-and-freddie-mac-exploded-and-many-bystanders-were-injured-in-the-blast-some-fatally\/","title":{"rendered":"What happened? “Fannie Mae and Freddie Mac exploded, and many bystanders were injured in the blast, some fatally”"},"content":{"rendered":"

Things fall apart: Kevin Hassett at Bloomberg.com is getting death threats over this news analysis:<\/a><\/p>\n

The financial crisis of the past year has provided a number of surprising twists and turns, and from Bear Stearns Cos. to American International Group Inc., ambiguity has been a big part of the story.<\/p>\n

Why did Bear Stearns fail, and how does that relate to AIG? It all seems so complex.<\/p>\n

But really, it isn’t. Enough cards on this table have been turned over that the story is now clear. The economic history books will describe this episode in simple and understandable terms: Fannie Mae and Freddie Mac exploded, and many bystanders were injured in the blast, some fatally.<\/p>\n

Fannie and Freddie did this by becoming a key enabler of the mortgage crisis. They fueled Wall Street’s efforts to securitize subprime loans by becoming the primary customer of all AAA-rated subprime-mortgage pools. In addition, they held an enormous portfolio of mortgages themselves.<\/p>\n

In the times that Fannie and Freddie couldn’t make the market, they became the market. Over the years, it added up to an enormous obligation. As of last June, Fannie alone owned or guaranteed more than $388 billion in high-risk mortgage investments. Their large presence created an environment within which even mortgage-backed securities assembled by others could find a ready home.<\/p>\n

The problem was that the trillions of dollars in play were only low-risk investments if real estate prices continued to rise. Once they began to fall, the entire house of cards came down with them.<\/p>\n

Take away Fannie and Freddie, or regulate them more wisely, and it’s hard to imagine how these highly liquid markets would ever have emerged. This whole mess would never have happened.<\/p><\/blockquote>\n

Read the whole thing<\/a>.
\n<\/p>\n

Technorati Tags: investment<\/a>, real estate<\/a>, real estate marketing<\/a><\/p>\n

<\/p>\n","protected":false},"excerpt":{"rendered":"

Things fall apart: Kevin Hassett at Bloomberg.com is getting death threats over this news analysis: The financial crisis of the past year has provided a number of surprising twists and turns, and from Bear Stearns Cos. to American International Group Inc., ambiguity has been a big part of the story. Why did Bear Stearns fail, […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_crdt_document":"","jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[29,8,26,6,5],"tags":[],"class_list":{"0":"post-4576","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"hentry","6":"category-group-therapy","7":"category-investment","8":"category-lending","9":"category-marketing","10":"category-real-estate","12":"no-featured-image"},"jetpack_featured_media_url":"","jetpack_sharing_enabled":true,"jetpack-related-posts":[{"id":4039,"url":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/4039\/mortgage-market-week-in-review-7\/","url_meta":{"origin":4576,"position":0},"title":"Mortgage Market Week in Review","author":"Tom Vanderwell","date":"August 22, 2008","format":false,"excerpt":"Here we are on Friday again and it\u2019s time to take another look at what\u2019s going on in the mortgage markets. This week we\u2019re going to talk about two economic reports and two big question marks. First the economic reports from the week: 1. The Index of Leading Economic Indicators\u2026","rel":"","context":"In "Lending"","block_context":{"text":"Lending","link":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/category\/lending\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":10727,"url":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/10727\/anyone-think-that-fannie-and-freddie-are-out-of-the-woods\/","url_meta":{"origin":4576,"position":1},"title":"Anyone think that Fannie and Freddie are “out of the woods?”","author":"Tom Vanderwell","date":"December 29, 2009","format":false,"excerpt":"Then check out this chart marking delinquencies at Fannie Mae.\u00a0\u00a0 Calculated Risk: Fannie Mae: Delinquencies Increase Sharply in OctoberFannie Mae reported today that the rate of serious delinquencies - at least 90 days behind - for conventional loans in its single-family guarantee business increased to 4.98% in October, up from\u2026","rel":"","context":"In "Lending"","block_context":{"text":"Lending","link":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/category\/lending\/"},"img":{"alt_text":"","src":"https:\/\/i0.wp.com\/straighttalkaboutmortgages.com\/wp-content\/uploads\/2009\/12\/FannieMaeDelinquencyOct.jpg?resize=350%2C200","width":350,"height":200},"classes":[]},{"id":10718,"url":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/10718\/twas-the-night-before-christmas\/","url_meta":{"origin":4576,"position":2},"title":"‘Twas the Night Before Christmas","author":"Tom Vanderwell","date":"December 29, 2009","format":false,"excerpt":"and all through the country, people were paying more attention to Christmas than they were to the government and to the financial mess that is making our country struggle.So what did the Treasury do?\u00a0\u00a0 They did two things:They expanded the nationalization of Fannie Mae and Freddie Mac from $200 Billion\u2026","rel":"","context":"In "Dirty Laundry"","block_context":{"text":"Dirty Laundry","link":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/category\/dirty-laundry\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":10963,"url":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/10963\/barney-frank-i-believe-this-committee-will-be-recommending-abolishing-fannie-mae-and-freddie-mac-in-their-current-form-and-coming-up-with-a-whole-new-system-of-housing-finance\/","url_meta":{"origin":4576,"position":3},"title":"Barney Frank: “I believe this committee will be recommending, abolishing Fannie Mae and Freddie Mac in their current form and coming up with a whole new system of housing finance.”","author":"Greg Swann","date":"January 22, 2010","format":false,"excerpt":"To say anything at all would be way too much. From the Wall Street Journal:\"The remedy here is...as I believe this committee will be recommending, abolishing Fannie Mae and Freddie Mac in their current form and coming up with a whole new system of housing finance,\" said Rep. Barney Frank\u2026","rel":"","context":"In "Big Mother"","block_context":{"text":"Big Mother","link":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/category\/big-mother\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":4256,"url":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/4256\/excerpts-from-the-press-release-about-the-death-of-fannie-and-freddie\/","url_meta":{"origin":4576,"position":4},"title":"Excerpts from the Press Release about the Death of Fannie and Freddie…..","author":"Tom Vanderwell","date":"September 7, 2008","format":false,"excerpt":"Treasury Press Release I have clearly stated three critical objectives: providing stability to financial markets, supporting the availability of mortgage finance, and protecting taxpayers \u2013 both by minimizing the near term costs to the taxpayer and by setting policymakers on a course to resolve the systemic risk created by the\u2026","rel":"","context":"In "Lending"","block_context":{"text":"Lending","link":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/category\/lending\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":3447,"url":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/3447\/moral-hazard\/","url_meta":{"origin":4576,"position":5},"title":"Moral Hazard….","author":"Tom Vanderwell","date":"July 22, 2008","format":false,"excerpt":"Barry Ritholz at The Big Picture had these two comics that brought to the forefront again the issue of moral hazard. Check out the comics and then we'll talk \"on the other side.\" Okay, now some thoughts about moral hazard: The definition of moral hazard (as taken from that scholarly\u2026","rel":"","context":"In "Investment"","block_context":{"text":"Investment","link":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/category\/investment\/"},"img":{"alt_text":"This is going to get expensive.....","src":"https:\/\/i0.wp.com\/straighttalkaboutmortgages.wordpress.com\/files\/2008\/07\/moral-hazard.jpg?resize=350%2C200","width":350,"height":200},"classes":[]}],"_links":{"self":[{"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/posts\/4576","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/comments?post=4576"}],"version-history":[{"count":1,"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/posts\/4576\/revisions"}],"predecessor-version":[{"id":4577,"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/posts\/4576\/revisions\/4577"}],"wp:attachment":[{"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/media?parent=4576"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/categories?post=4576"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/tags?post=4576"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}