Sarah Palin, do your homework

[SonOfLe-loLang]

HuffPo is trumpeting "Palin's First Gaffe!" Asked about Fannie Mae and Freddie Mac, Palin said they've "gotten too big and too expensive to the taxpayers."


Fannie and Freddie have been privately run for 40 years, moron. This is as bad as McCain not knowing how social security worked.

Ladies and gentleman, your republican candidates!!!!

[theAPAOps5]

Well playing devils advocate aren't they too expensive for the taxpayers since they were just placed in conservatorship.

[SonOfLe-loLang]

Well playing devils advocate aren't they too expensive for the taxpayers since they were just placed in conservatorship.

haha yeah, but thats not what she was referring to in the context of the quote

[ColoradoDarin]

HuffPo is trumpeting "Palin's First Gaffe!" Asked about Fannie Mae and Freddie Mac, Palin said they've "gotten too big and too expensive to the taxpayers."


Fannie and Freddie have been privately run for 40 years, moron. This is as bad as McCain not knowing how social security worked.

Ladies and gentleman, your republican candidates!!!!

They're not private. They're GSE's (http://en.wikipedia.org/wiki/Government_sponsored_enterprise), which they are not supposed to have explicit government backing, but everyone believes them to have government backing (as seen with their bailout), so yes they are backed by the US government. Unfortunately we have to bail them out, unless you want to see the Great Depression 2.

[Spider]

They're not private. They're GSE's (http://en.wikipedia.org/wiki/Government_sponsored_enterprise), which they are not supposed to have explicit government backing, but everyone believes them to have government backing (as seen with their bailout), so yes they are backed by the US government. Unfortunately we have to bail them out, unless you want to see the Great Depression 2.

I dont see how it would lead to a great depression , if these companies fold .......

[ColoradoDarin]

I dont see how it would lead to a great depression , if these companies fold .......

Fannie and Freddie either already own or guarantee half of the mortgage market - that ain't small potatoes.

[Spider]

Fannie and Freddie either already own or guarantee half of the mortgage market - that ain't small potatoes.

I know it isnt , but i still dont see Great Depression over it

[SonOfLe-loLang]

Oh we have to bail them out, and even though they are GSE's, they are not funded by the taxpayers

[ColoradoDarin]

Retail mortgage rates would probably nearly DOUBLE, and housing values would plunge. I don't know what would happen if everyone's house was suddenly worth half of what they thought it was (even after the dropping of values over the last year). IIRC If you exclude the housing sector, we have had pretty decent growth this last year (around 3%, again IIRC). So if a slowdown in the housing industry is enough to wipe out all the rest of the economy's growth what will slashing it do?

[Spider]

Retail mortgage rates would probably nearly DOUBLE, and housing values would plunge. I don't know what would happen if everyone's house was suddenly worth half of what they thought it was (even after the dropping of values over the last year). IIRC If you exclude the housing sector, we have had pretty decent growth this last year (around 3%, again IIRC). So if a slowdown in the housing industry is enough to wipe out all the rest of the economy's growth what will slashing it do?

I am not saying the economy wouldnt take a hit , I just dont see the Great depression either , bring back factory jobs , you dont have to bail these 2 companies out

[TheDave]

Everyone is spending too much time looking for some little slip up from this woman... Stop trying. I thought this entire thing would of blown up already. Looks like the GOP base is a little more rabid than I thought.

The good news is, time is on our side. She was brought in as a publicity stunt... So far so good. A little red meat for the asleep at the wheel base. The problem is for this to continue working she needs to be in front of the camera. The non rabid Republicans and independents will quickly tire of this act and want to see that she is more than just a pretty face. Eventually she will have to step in front of real political reporters and answer real questions. That's when the house of cards comes down.

If she is as woefully ignorant on the issues as is being reported she will fall on her face in grand fashion. Just give it time.

[ScottXray]

Retail mortgage rates would probably nearly DOUBLE, and housing values would plunge. I don't know what would happen if everyone's house was suddenly worth half of what they thought it was (even after the dropping of values over the last year). IIRC If you exclude the housing sector, we have had pretty decent growth this last year (around 3%, again IIRC). So if a slowdown in the housing industry is enough to wipe out all the rest of the economy's growth what will slashing it do?

Unfortunately, you are right. No bail out (especially of the foreign investors with large blocks of stock) will eliminate the ability of this country to continue to do business. It would have exactly the effects you describe, as whatever foreign capitol we could draw would be at ABOVE market rates. The mortgage business, construction (home) industry, would basically come to a halt, and millions of more people would watch their house values plummit.
By itself it wouldn't cause a depression, but the effects would ripple out and trigger it.

Dammit...I want some ones ASS over this!

[SonOfLe-loLang]

Unfortunately, you are right. No bail out (especially of the foreign investors with large blocks of stock) will eliminate the ability of this country to continue to do business. It would have exactly the effects you describe, as whatever foreign capitol we could draw would be at ABOVE market rates. The mortgage business, construction (home) industry, would basically come to a halt, and millions of more people would watch their house values plummit.
By itself it wouldn't cause a depression, but the effects would ripple out and trigger it.

Dammit...I want some ones ASS over this!

You know what probably would have helped? More regulation....NOOOOOOOOOOO SOCIALISM OOOOOOOOOOOOOOOOOOOOHHHHH MARXXXX OOOOHHHHHH

[ColoradoDarin]

I am not saying the economy wouldnt take a hit , I just dont see the Great depression either , bring back factory jobs , you dont have to bail these 2 companies out

I don't know how you bring back a mass of factory jobs. Most of the people got replaced by a machine. For instance, China lost 15 million (http://www.conference-board.org/utilities/pressDetail.cfm?press_ID=2432) manufacturing jobs in the 1995-2002 time frame. Those jobs are gone and they ain't coming back (/Bruce Springsteen, heh). My wife works at a paper mill (toilet paper and paper towels) and when you tour the place I was surprised that there are just so few people they need to run it.

[Stormontheplains]

I didn't read the entire thread, Did Palin talk about her MUSLIM FAITH??

[TheDave]

I didn't read the entire thread, Did Palin talk about her MUSLIM FAITH??

Yes she did... It was embarassing.

[Spider]

I don't know how you bring back a mass of factory jobs. Most of the people got replaced by a machine. For instance, China lost 15 million (http://www.conference-board.org/utilities/pressDetail.cfm?press_ID=2432) manufacturing jobs in the 1995-2002 time frame. Those jobs are gone and they ain't coming back (/Bruce Springsteen, heh). My wife works at a paper mill (toilet paper and paper towels) and when you tour the place I was surprised that there are just so few people they need to run it.

Break shoes , automotive parts , flags made here , toys , etc ..........

[ColoradoDarin]

You know what probably would have helped? More regulation....NOOOOOOOOOOO SOCIALISM OOOOOOOOOOOOOOOOOOOOHHHHH MARXXXX OOOOHHHHHH

Well, they would have never been able to be so large if they wouldn't have had the (implicit heh) backing of the government. There is a ton of capital in the world and there are a lot of people who crave risk free interest (which is basically gov't paper), they saw it as another avenue to get treasury backed interest payments. They were right as seen today....

These GSE's were doomed from the start, you have to be either fully government or fully private, this quasi thing won't work. Democrats and Republicans can share the blame for this since they worked in the bipartisan way to screw us all.

[ColoradoDarin]

Break shoes , automotive parts , flags made here , toys , etc ..........

Stuff is just so automated now, even if you bring those back (though many flags are still produced here, I read the other day that the ones used at both conventions were specifically requested to be made in America) they will be made mostly by machines and not people.

[Spider]

Stuff is just so automated now, even if you bring those back (though many flags are still produced here, I read the other day that the ones used at both conventions were specifically requested to be made in America) they will be made mostly by machines and not people.

Anything man made will break down , Factories are not as automated as you might think , i used ot load at factories alot even a lawn chair factory in Pittsburg PA ......lets face it , these jobs went over seas cause it is cheaper for Nike to make shoes in China ship em here , thats the bottom line

[ColoradoDarin]

Anything man made will break down , Factories are not as automated as you might think , i used ot load at factories alot even a lawn chair factory in Pittsburg PA ......lets face it , these jobs went over seas cause it is cheaper for Nike to make shoes in China ship em here , thats the bottom line

I quote myself from above..... My wife works at a paper mill (toilet paper and paper towels) and when you tour the place I was surprised that there are just so few people they need to run it.

[theAPAOps5]

I didn't read the entire thread, Did Palin talk about her MUSLIM FAITH??

No she denounced your dumb ass hero. But then someone pointed out that her running mate voted with him 90% of the time. And they said why would anyone call that dumb ass idiot Bush their hero. And someone was like I don't know but they have pretty low standards.

[Spider]

I quote myself from above..... My wife works at a paper mill (toilet paper and paper towels) and when you tour the place I was surprised that there are just so few people they need to run it.

I have loaded at Blue Ridge paper in Canton N.Carolina , you would be surprised how many people are there

[L.A. BRONCOS FAN]

Unfortunately we have to bail them out, unless you want to see the Great Depression 2.

Huh? ???

You mean the "free market" failed to correct itself when left to its own devices?

Who knew Darin, W*GS, et al, stood for government regulation of markets?

[ScottXray]

You can't bring most of the jobs back....
You need to invest in things like Infrastructure, roads, rail lines, and the construction needed to make them work, technology that drives innovation. blue collar jobs like installing solar panels and heat pumps / Fuel cell tech,
wind turbines. That is what Obama is talking about when he says a green
economy.
Create a new industry that will always be needed. Hell, even better drilling tech, and Oil shale tech, and most of all, keep the jobs HERE, and stop sending all our money OUT of the country.

I have no problem with Drilling...but if its government land there should be a penalty(extra royalty) for selling the oil on the world market , rather than refining and selling it here.

Invest in the teachers and schools aand education standards that create educated students and not people trained to take a test so their district can get NCLB funds only.

We are in Such a hole!

[SonOfLe-loLang]

Huh? ???

You mean the "free market" failed to correct itself when left to its own devices?

Who knew Darin, W*GS, et al, stood for government regulation of markets?

But the government is run by evil!

[L.A. BRONCOS FAN]

But the government is run by evil!

Riiiiiiiiiiiiiiiiiiiiiiiiight.

America does SO much better when we turn the regulation of markets over to hedge funds, predatory lenders, and financial shysters, don't ya know? ;)

[El Minion]

Oh we have to bail them out, and even though they are GSE's, they are not funded by the taxpayers

Exactly:



---------------------------------
<link rel="stylesheet" type="text/css" href="http://www.slate.com/css/slate_print.css" /><script>var PStax = 61734; var site = "slate"; var commercialNode = "news/print";</script><script type="text/javascript" src="http://www.washingtonpost.com/wp-srv/ad/slate_ad2.js"></script></head><body><div id="print_main"><div id="print_ad"><script type="text/javascript" language="javascript">placeAd2(commercialNode,'bigbox',false,'')</script></div><img src="http://www.washingtonpost.com/wp-adv/slate_new_ads/slatelogo.gif" alt="Slate Magazine" width="109" height="48" id="print_header_img"><br><span class="department"
moneybox</span><h1>Saving the People's Bank of China</h1><h2>Who the Fannie Mae/Freddie Mac bailout is <em>really</em> supposed to help.</h2><span class="author">By Daniel Gross</span><span class="dateline" id="dateline_top"><br>Posted Monday, Sept. 8, 2008, at 11:06 AM ET
</span><hr><p>On Sunday, the Treasury Department announced that it would effectively take over Fannie Mae and Freddie Mac, the critically wounded government-sponsored mortgage behemoths. (This <a target="_blank" href="http://treasury.gov/news/index1.html">landing page</a> at the Treasury Department has the details.)</p><p>Generally speaking, the federal government has been content merely to watch the failures stemming from the real-estate/housing-credit bubble. If individuals default on their mortgages and get foreclosed on, that's their proper comeuppance. If subprime lenders go out of business, that's capitalism's creative destruction. If banks start to fail, as they're <a target="_blank" href="http://www.fdic.gov/bank/individual/failed/banklist.html">now doing</a> at a rate of one per week, no big deal.</p><p>But Washington reacted with alacrity when a second-tier investment bank, Bear Stearns, threatened to take the plunge. And the case of Fannie Mae and Freddie Mac is a rare example of Washington regulators being slightly ahead of the curve. Of course, Fannie and Freddie are bigger and more significant than any of the financial firms that have failed thus far. But the reason for the fevered weekend rescue activity has less to do with the companies' size than with their scope.</p><p>When U.S.-based banks fail, the outcomes are pretty unpleasant. Still, there's a tried-and-true mechanism in place to deal with them: the FDIC. The damage—closed branches; job losses; angry shareholders, lenders, and depositors—is real, but it is generally contained to the geographical areas in which the bank operates. But with Fannie Mae and Freddie Mac, and to a lesser degree with Bear Stearns, it's more like an airborne virus than a localized explosion. They had the capacity to inflict huge damage around the globe and to cripple the international financial system. And for that reason, they couldn't be allowed to go down. In the case of Bear Stearns, the potential victims were counterparties to trades all around the world. In the case of Fannie Mae and Freddie Mac, the potential victims were central banks and foreign institutions that have bought their debt by the boatload. It's no accident that the takeover was announced in the middle of the day on Sunday. (Barry Ritholtz <a target="_blank" href="http://bigpicture.typepad.com/">chronicles</a> a slew of other recent Sunday credit-related announcements.) It was timed to get out before the Asian markets opened for trading on Monday.</p><p>For years, as scolds warned of the dangers of a low U.S. savings rate and a massive trade deficit, optimists pointed out the bright side. Chinese central banks and Persian Gulf <em>petrogovernments</em> take the dollars we send them for oil and manufactured goods and spend them on dollar-denominated assets such as Treasury bonds, thus financing our consumption and keeping interest rates low. For foreigners, Treasury bonds have long been the safest best. But as the Federal Reserve slashed interest rates a few years ago, Treasuries became less attractive. And the foreigners began to gobble up the type of debt issued by "government-sponsored enterprises" Fannie Mae and Freddie Mac. With their implicit guarantee, the GSEs were deemed to be just as safe as U.S. government bonds but paid a slightly higher interest rate. The Federal Reserve <a target="_blank" href="http://www.federalreserve.gov/releases/z1/Current/">quarterly flow of funds accounts</a> tells the story. As chart L107 shows, in 2003, non-U.S. investors held $654.8 billion of agency or government-sponsored enterprise debt. That was divided among official investors like central banks ($262.9 billion) and private investors ($391.8 billion). That year, official foreign authorities thus held about 8 percent of the total agency/GSE debt. With every passing year, the amount of debt held by foreigners—and especially by official foreign investors—rose dramatically. In the first quarter of 2008, foreigners held $1.54 trillion in such debt. But now, official authorities hold most of that total ($985 billion). In five years, then, official authorities more than tripled their holdings. And as of the first quarter of 2008, they held 21.4 percent of the total.</p><p>When foreigners buy bonds denominated in dollars, they assume three related risks: currency risk (if the dollar weakens, then dollar-denominated assets fall in value); interest-rate risk (if interest rates rise, the value of fixed-income investments falls); and repayment risks (the value of bonds can fall if doubts arise over whether the debt will be paid back). The foreign investors that loaded up on Fannie and Freddie debt assumed the first two risks but didn't bargain for the third. And as doubts about the viability of Fannie and Freddie grew, foreign central banks suddenly found themselves massively exposed. With the agencies needing to sell billions of dollars of debt on a weekly basis, and with the U.S. institutions lacking capital, proper deference had to be paid to the foreigners. The U.S. government had to protect their GSE investments. Paulson &amp; Co. face an extra burden because foreign investors have been so badly burned by the U.S. financial sector. When sovereign wealth funds began buying chunks of Wall Street firms after they had imploded, Paulson repeatedly trumpeted those purchases as international votes of confidence. But those investments have been disastrous for the foreign purchases, as Asian and Persian Gulf authorities have lost billons on the Blackstone Group, Citigroup, Merrill Lynch, and others investments.</p><p>The bailout of Fannie Mae and Freddie Mac will be sold and marketed as an effort to shore up the U.S. housing market. Maybe so. But it is mostly meant to shore up our damaged international financial standing, preserving leadership and making sure the U.S. Treasury Secretary doesn't get tarred and feathered at the next G-8 meeting. </p>Daniel Gross is the Moneybox columnist for <strong><em>Slate</em></strong> and the business columnist for <em>Newsweek</em>. You can e-mail him at <a target="_blank" href="mailto:moneybox@slate.com">moneybox@slate.com</a>. He is the author of <a target="_blank" href="http://www.amazon.com/Pop-Why-Bubbles-Great-Economy/dp/0061151548/ref=pd_bbs_sr_1/002-2036587-4768832?ie=UTF8&amp;s=books&amp;qid=1177018293&amp;sr=8-1"><em>Pop! Why Bubbles Are Great for the Economy</em></a>.<br><p><strong>Article URL: <a href="http://www.slate.com/id/2199564/" target="_blank">http://www.slate.com/id/2199564/</a></strong></p></div

[ColoradoDarin]

Huh? ???

You mean the "free market" failed to correct itself when left to its own devices?

Who knew Darin, W*GS, et al, stood for government regulation of markets?

It's not the free market. You have no idea what a GSE is, do you?

[L.A. BRONCOS FAN]

It's not the free market. You have no idea what a GSE is, do you?

But you're advocating a government bail-out here.

I thought we were supposed to leave these things up to the "free market" and they would resolve themselves? :giggle:

[stugotsII]

HuffPo is trumpeting "Palin's First Gaffe!" Asked about Fannie Mae and Freddie Mac, Palin said they've "gotten too big and too expensive to the taxpayers."


Fannie and Freddie have been privately run for 40 years, moron. This is as bad as McCain not knowing how social security worked.

Ladies and gentleman, your republican candidates!!!!

...and Fannie and Freddie are the ones that have almost single handedly crushed the housing market.

PS. They are like Enron times 10.

PSS. Most of the Fannie and Freddie crew...run by Democrats.

PSSS. No one cares. Denver is up 41-7 vs the Raiders.

[L.A. BRONCOS FAN]

PSS. Most of the Fannie and Freddie crew...run by Democrats.



McCain's running mate, Alaska Gov. Sarah Palin, speaking in Colorado Springs, Colo., said Fannie and Freddie had "gotten too big and too expensive to the taxpayers." The companies, however, aren't taxpayer funded but operate as private companies. The takeover may result in a taxpayer bailout during reorganization.

http://blog.foreignpolicy.com/node/9737.

[Meck77]

Hey LA. The Broncos beat the Raiders. Just thought I'd let you know. Carry on.

[ColoradoDarin]

But you're advocating a government bail-out here.

I thought we were supposed to leave these things up to the "free market" and they would resolve themselves? :giggle:

I know you love to just keep going, but I'll say this last thing for the thread and then I'm done (too happy about the game tonight to care to keep goin). Ideally, we wouldn't have had the government IN the mortgage industry in the first place (these are publicly created entities during the New Deal given over to "private" control with tight government "oversight", all done poorly I might add), unfortunately, since I can't go back in time as a solution so the socialism didn't start, I have to go for a solution here in the real world. Which means choosing a government bailout over mass chaos (which is why I'm not a Libertarian either). You have 1 bad option vs another worse option.

So am I happy about a government bailout? NO, obviously. But it's a better choice than anything else at this point. We have to take our lumps because there is no Candy Mountain, sorry Charlie Unicorn. (http://www.youtube.com/watch?v=Q5im0Ssyyus)

Have fun around here, I might check back in a couple of days again, I'm too high on the Broncos right now!

[L.A. BRONCOS FAN]

I'm high on the Jokeland beat down also, but leave us not forget that the OP was about Caribou Barbie's gaffe, i.e., her belief that F&F are taxpayer-funded entities.

[MO<1>]

I'm high on the Jokeland beat down also, but leave us not forget that the OP was about Caribou Barbie's gaffe, i.e., her belief that F&F are taxpayer-funded entities.

That's right. The CEO of Fannie Mae (Jim Johnson) helped Obama picked Biden as his running mate. Quite the brain trust when you make $19 M a year compensation and saddle the American taxpayer with a possible $1.6 trillion debt. This is the type of people that can afford to spend money on communitty organizing and feel good about their soul.

http://www.washingtonpost.com/wp-dyn/content/article/2006/05/23/AR2006052301751_pf.html
http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=132x6276799

[L.A. BRONCOS FAN]

The CEO of Freddie Mac helped Obama picked Biden as his running mate.

???