Radiance3 wrote:
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Sorry to tell you that you've misunderstood the whole purpose of Fannie Mae and Freddie Mac. Yours had a very wrong interpretation about president Bush in 1992, entering into the Iraq war, your allegations of helping people who don't have the qualification of obtaining loans. That was Mr. Obama's demand in 1996 demanding banks to provide loans to low income people. Unfortunately substantial parts of those loans were sold to Fannie and Freddie Mac subsidies under the system of Sub- Prime lending.
Here are the reasons why Fannie and Freddie were created.
FANNIE MAE AND FREDDIE MAC
Fannie Mae and Freddie Mac were created by Congress in 1938. They perform an important role in the nation’s housing finance system:
1. To provide liquidity, stability and affordability to the mortgage market. They provide liquidity (ready access to funds on reasonable terms) to the thousands of banks, savings and loans, and mortgage companies that make loans to finance housing.
2. Fannie Mae and Freddie Mac buy mortgages from lenders and either hold these mortgages in their portfolios or package the loans into mortgage-backed securities (MBS) that may be sold.
3. Lenders use the cash raised by selling mortgages to the Enterprises to engage in further lending.
4. The Enterprises’ purchases help ensure that individuals and families that buy homes and investors that purchase apartment buildings and other multifamily dwellings have a continuous, stable supply of mortgage money.
5. By packaging mortgages into( MBS), and guaranteeing the timely payment of principal and interest on the underlying mortgages.
6. Fannie Mae and Freddie Mac attract to the secondary mortgage market investors who might not otherwise invest in mortgages, thereby expanding the pool of funds available for housing.
7. That makes the secondary mortgage market more liquid and helps lower the interest rates paid by homeowners and other mortgage borrowers.
8.Fannie Mae and Freddie Mac also can help stabilize mortgage markets and protect housing during extraordinary periods when stress or turmoil in the broader financial system threaten the economy. The Enterprises’ support for mortgage lending that finances affordable housing reduces the cost of such borrowing.
9. Fannie Mae was first chartered by the U.S. government in 1938 to help ensure a reliable and affordable supply of mortgage funds throughout the country. Today it is a shareholder-owned company that operates under a congressional charter.
Note: Part of the Stimulus funds provided in 2009 was bailing out Fannie and Freddie
Here's what happened during the 2008 SupPrime crisis. Banks sold the loans to Fannie and Freddie, and therefore substantial loans were carried under the two charters. But when the SubPrime failed, substantial losses were incurred by both charters. According to an independent economic group, the Shadow Open Market Committee (SOMC), keeping the two agencies afloat cost taxpayers US$187 billion over time as the Treasury paid $116 billion for Fannie and $71 billion for Freddie.
================== br i Sorry to tell you that yo... (
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*Quote, - yours had a very wrong interpretation of President Bush entering the Iraq war in 1992.]
Saddam Hussein attacked Iran because he believe it was an opportune moment, HW Bush attacked Saddam Hussein because Saudi Arabia used it's influence to demand Saddam be squeezed financially because he lost the war but emerged with a far stronger Arab force than all the other Arab States put together.
Even if Saddam won he would still have annihilated, I have the book right in front of me "Saddam Hussein- The Politics of Revenge" by an expert , ' Said K. Aburish '.
When that provocation didn't work Kuwait invented slant drilling now used in Fracking to really get up Saddam's nose, this led to the US bailing Kuwait out, but Saddam was still probably even stronger so the stage was set for the invasion proper of Iraq in 2003.
Saudi Arabia paid for slant drilling to be invented to start a war and now slant drilling is putting Saudi Arabia out of business, how do you like that ?.
Quote, - that was Obama's demand in 1996. ]
I don't disagree with any of that, except the part where banks sold the loans to Freddie May and Mac, but I can see how that could happen and then from the two government subsidiaries May and Mac the mortgage contracts were sold overseas as Mortgage Backed Securities, which is why the Treasury Department was liable, I think that's where the QE 1 figure of $100 billion for agency default and $500 billion for mortgage backed Securities came from, followed in 2009 by $850 billion for mortgage backed securities and $300 billion to cover treasuries, then in 2010 $600 billion injected, which was all known as QE 1.
QE 2 began mid. 2011 with $400 billion to prop up treasuries.
QE3 began 2012 with $40 billion monthly rising to $85 billion used mainly for long term bond purchases tapered in 2013 to $10 billion and ended Octiber 2014.
That wasn't the money used to bail out Commercial banks JP Morgan, America Express, Golden Sachs, Capital One, State Street, BB&T, Wells Fargo and Bank of America.
Freddie May and Mac and General Motors got $214 billion between them.
As far as I know most of that money has been paid back and the Fed has been shrinking it's Balance Sheet that's one of the reasons Powell gives for the recent injections of cash into the Banks.
However although the money is paid back the quantity of $ in the system can't be reduced, so where does all this money go? answer, - hoarding, off shore accounts, Bitcom all I know is I haven't got any.
I am studying up on Freddie Mae and Mac. The Banking short falls are getting incredibly deeper Term Repo market is getting $ 60 billion a day injected up from $30 billion and Overnight Repo is getting $100 billion injected daily up from $75 billion.
About Obama, I remember he was making US Aid conditional upon African Nations implementing gay rights legalisation, that is worse than what Trump is accused of doing in my opinion.