The Administration's Unheeded Warnings About the Systemic Risk Posed by the GSEs - New England Patriots Forums

***IcyPatriot*** · 09-22-2008, 11:04 PM

Just the Facts: The Administration's Unheeded Warnings About the Systemic Risk Posed by the GSEs

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For many years the President and his Administration have not only warned of the systemic consequences of financial turmoil at a housing government-sponsored enterprise (GSE) but also put forward thoughtful plans to reduce the risk that either Fannie Mae or Freddie Mac would encounter such difficulties. President Bush publicly called for GSE reform 17 times in 2008 alone before Congress acted. Unfortunately, these warnings went unheeded, as the President's repeated attempts to reform the supervision of these entities were thwarted by the legislative maneuvering of those who emphatically denied there were problems.

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2001
April: The Administration's FY02 budget declares that the size of Fannie Mae and Freddie Mac is "a potential problem," because "financial trouble of a large GSE could cause strong repercussions in financial markets, affecting Federally insured entities and economic activity."
2002
May: The President calls for the disclosure and corporate governance principles contained in his 10-point plan for corporate responsibility to apply to Fannie Mae and Freddie Mac. (OMB Prompt Letter to OFHEO, 5/29/02)

***IcyPatriot*** · 09-22-2008, 11:05 PM

Just the Facts: The Administration's Unheeded Warnings About the Systemic Risk Posed by the GSEs

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2004
February: The President's FY05 Budget again highlights the risk posed by the explosive growth of the GSEs and their low levels of required capital, and called for creation of a new, world-class regulator: "The Administration has determined that the safety and soundness regulators of the housing GSEs lack sufficient power and stature to meet their responsibilities, and therefore…should be replaced with a new strengthened regulator." (2005 Budget Analytic Perspectives, pg. 83)

***IcyPatriot*** · 09-22-2008, 11:06 PM

Just the Facts: The Administration's Unheeded Warnings About the Systemic Risk Posed by the GSEs

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2005
April: Treasury Secretary John Snow repeats his call for GSE reform, saying "Events that have transpired since I testified before this Committee in 2003 reinforce concerns over the systemic risks posed by the GSEs and further highlight the need for real GSE reform to ensure that our housing finance system remains a strong and vibrant source of funding for expanding homeownership opportunities in America… Half-measures will only exacerbate the risks to our financial system." (Secretary John W. Snow, "Testimony Before The U.S. House Financial Services Committee," 4/13/05)

***IcyPatriot*** · 09-22-2008, 11:09 PM

Just the Facts: The Administration's Unheeded Warnings About the Systemic Risk Posed by the GSEs

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2007
July: Two Bear Stearns hedge funds invested in mortgage securities collapse.
August: President Bush emphatically calls on Congress to pass a reform package for Fannie Mae and Freddie Mac, saying "first things first when it comes to those two institutions. Congress needs to get them reformed, get them streamlined, get them focused, and then I will consider other options." (President George W. Bush, Press Conference, The White House, 8/9/07)

September: RealtyTrac announces foreclosure filings up 243,000 in August – up 115 percent from the year before.

September: Single-family existing home sales decreases 7.5 percent from the previous month – the lowest level in nine years. Median sale price of existing homes fell six percent from the year before.

December: President Bush again warns Congress of the need to pass legislation reforming GSEs, saying "These institutions provide liquidity in the mortgage market that benefits millions of homeowners, and it is vital they operate safely and operate soundly. So I've called on Congress to pass legislation that strengthens independent regulation of the GSEs – and ensures they focus on their important housing mission. The GSE reform bill passed by the House earlier this year is a good start. But the Senate has not acted. And the United States Senate needs to pass this legislation soon." (President George W. Bush, Discusses Housing, The White House, 12/6/07)

***IcyPatriot*** · 09-22-2008, 11:10 PM

Just the Facts: The Administration's Unheeded Warnings About the Systemic Risk Posed by the GSEs

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2008

March: President Bush calls on Congress to take action and "move forward with reforms on Fannie Mae and Freddie Mac. They need to continue to modernize the FHA, as well as allow State housing agencies to issue tax-free bonds to homeowners to refinance their mortgages." (President George W. Bush, Remarks To The Economic Club Of New York, New York, NY, 3/14/08)
April: President Bush urges Congress to pass the much needed legislation and "modernize Fannie Mae and Freddie Mac. [There are] constructive things Congress can do that will encourage the housing market to correct quickly by … helping people stay in their homes." (President George W. Bush, Meeting With Cabinet, the White House, 4/14/08)
May: President Bush issues several pleas to Congress to pass legislation reforming Fannie Mae and Freddie Mac before the situation deteriorates further.

***patsfan13*** · 09-22-2008, 11:20 PM

Gee where did all the libs go?

PatriotsReign · 09-22-2008, 11:28 PM

Ok, you suckered me into this discussion...at least briefly. I'm not a "lib", buy I'll be glad to give this a shot!

Paulson nominated by President Bush to succeed John Snow as secretary, boost public perception of performance.

Bush taps Goldman CEO Paulson to head Treasury - May. 30, 2006

The man who lied to Bush and the American people the most is Mr Paulson. He repeatedly stated that the banking and financial system was sound & solid. After all, he was the MAN when it came to whether or not reform should happen. He actually said America's financial system was sound as recently as July.

Now this guy is supposed to be the guru of all guru's. Why would congress even discuss this issue when their guru says everything is A-OK? Secretary Paulson PURPOSEFULLY waited until the 12th hour came upon us so he could pull his power move. Think about it...of course he knew the system was a mess and would require action. So why did he wait until now?

If he isn't the biggest LIAR in history, then he is stupid. There are no other options here. So make your choice...but I highly doubt the man is stupid.

Also, consider the wording he wanted to have included in the package he proposed;

"Sec. 8. Review.

Decisions by the Secretary pursuant to the authority of this Act are non-reviewable and committed to agency discretion, and may not be reviewed by any court of law or any administrative agency."

also consider further this statement;

Paulson, May 2008

"The worst is likely to be behind us,’ Paulson told the paper, in one of the most optimistic comments by a top U.S. finance official since sub-prime mortgage losses set a domino effect in motion in mid 2007."

this is a man who has spent his entire career working on Wall Street. It is a known fact he knew what was going to happen. He patiently waited to make his move so he could take care of his old buds without congress or the American people being able to question his authority.

Well, his game is over. People everywhere are calling him out for the liar he is. His request for section 8 will not get passed.

I suggest to anyone interested that they Google;

Paulson Requests Non-Reviewable Authority To ...

and read the outrage.

in summary, there is plenty of blame to go around. None of know who is really to blame but we can ALL agree that the main motive behind all those who caused this crisis is certainly GREED. And I'm not talking simple greed, I'm saying it was the kind of greed that is written in the bible...born of evil.

Just watch Paulson speak on the news and you'll see and feel his hunger for power & greed. I think the man sold his soul and it's sad he is in the position of making the most important decision in this nations history. If we look close enough, I'm sure we would find the numbers 666 somewhere on his body.

***patsfan13*** · 09-23-2008, 12:07 AM

Have you ever seen me praise Paulson? Have you seen me endorse his plan?

Bush tried on numerous occasions to warn about the problem and put in some reforms you guys blocked it. Paulson was very late to the party.

PatriotsReign · 09-23-2008, 12:16 AM

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Originally Posted by patsfan13

Have you ever seen me praise Paulson? Have you seen me endorse his plan?

Bush tried on numerous occasions to warn about the problem and put in some reforms you guys blocked it. Paulson was very late to the party.

What you're forgetting is that the secretary of the treasury told everyone not to do anything. Prior to him getting appointed, the economy was booming, so of course no one in congress was in a rush to pass sweeping changes.

Look, I've already stated my position that this is non-partisan. You can play that game if you want, but I'm sticking to historical precedent. No one blamed Reagan for the savings & loan fiasco because it wasn't his fault. If Bush wanted so badly to do something, why wouldn't he have appointed a secretary of treasury who would get that done?

It was HIS choice after all. He's the one who chose a former Wall Street investment guy who loved the loan trade game. That's how he made his fortune.

***IcyPatriot*** · 09-23-2008, 02:58 PM

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Originally Posted by PatriotsReign

Ok, you suckered me into this discussion...at least briefly. I'm not a "lib", buy I'll be glad to give this a shot!

Paulson nominated by President Bush to succeed John Snow as secretary, boost public perception of performance.

Bush taps Goldman CEO Paulson to head Treasury - May. 30, 2006.

I'll take a neutral position on Paulson's views for the interim because I would like to stick to the thread. Paulson was picked at the end of May ... fine. Bush still asked Congress 5 times after that to do something to fix the problem ... if Paulson had so much pull ... then why did Bush ask Congress 5 more times to help fix the problem?