Sunday, September 07, 2008
It's official
Government support needs to be either explicit or non-existent, and structured to resolve the conflict between public and private purposes. And policymakers must address the issue of systemic risk. I recognize that there are strong differences of opinion over the role of government in supporting housing, but under any course policymakers choose, there are ways to structure these entities in order to address market stability in the transition and limit systemic risk and conflict of purposes for the long-term. We will make a grave error if we don’t use this time out to permanently address the structural issues presented by the GSEs.A very grave error. The 'implicit' guaranty has been a mistake for decades.
3 Comments:
By 
, at
Sun Sep 07, 03:48:00 PM:
This "grave error" won't stop them from making it, or from repeating it, because politicians don't actually believe in limited government.
By , at
Sun Sep 07, 04:20:00 PM:
People need to go to jail ... FNM and FRE wouldn't turn down a loan. Period. The technology sucks.
Layers and layers of unscrupulous lender and borrower side people just f*cked us, and 25 billion, or whatever the number is won't do squat.
I don't know if this drives financials up or down tomorrow, but it doesn't seem like whatever happens will be sustained for more than just a short while.
By , at
Mon Sep 08, 09:47:00 AM:
At least this lets me take value out of my house again, I won't pay my mortgage each month and they won't foreclose. So all those shady lenders, crooked buyers and criminal executives at both these places get off scot free and we pick up the tab.
I certainly hope that Chris Dodd, Charlie Rangel and Hussein Obama get amnesty out of this for their crooked house deals.
