http://www.mises.org/story/2627
Considering the four aforementioned attributes, and the fact that this GSE is deeply mired in scandal, Fannie Mae is no doubt being closely monitored by the Working Group on Financial Markets (a.k.a. the Plunge Protection Team — which reports directly to the President of the United States).[8] Accordingly, we would take great pleasure in seeing Ben Bernanke, a member of the working group, asked the following questions — including the supporting commentary — the next time he appears in front of the House Committee on Financial Services.
After the collapse of the NASDAQ bubble in 2000, and after the shock of 9/11, the Federal Reserve came to believe that the United States was heading into a deep recession. As is typical of any central bank, the prescription to reinvigorate the economy entailed creating more money and granting more credit. By June of 2003, the Fed funds rate had been reduced to 1%. To be sure, this set America's housing market ablaze. And this is exactly what the Federal Reserve desired because it views housing as "…a key channel of monetary policy transmission."
A strategic cog in the monetary transmission mechanism is Fannie Mae. In the four-year period from 2000 to 2003, Fannie Mae's outstanding Mortgage-Backed Securities grew from $706.7 billion to an astounding $1.3 trillion. Moreover, its mortgage portfolio ballooned from $607.7 billion to $901.8 billion. With Fannie Mae financing one in every five home loans in the United States, didn't it ever occur to the Federal Reserve that it should look into this financial institution's accounting, management control, and credit quality systems? If this massive transmitter of money — Fannie Mae — was not up to the task of responsibly lending such vast quantities of money into existence, did it not occur to the Federal Reserve that it may have to clean up the mess it had a hand in making? Does the Federal Reserve have a plan to bail out the second largest financial institution in the United States?
**Now the same idiots that fell asleep (knowingly…) are in the fricken HENHOUSE!!!!!!!!!!!!!!!! I really cannot stand it…..when will the American people finally wake up…..like that Robin Wms film….awakening
Duratek and it's a SAD SAD DAY in US HISTORY. The FED was to be ON WATCH, what did they do? Used Interest rate policy along with the ARMS FNM and FRE (they still got FED HOME LOAN) to reinflate and create another BUBBLE......never ONCE intervening, and now got CONGRESSIONAL APPROVAL (how the f"@&% they do that?) and POWER and BLANK CHECK? that wasn't enough, now same nitwits take FULL CONTROL of the engine that has backfired in their face!!??
Well how do you do bend over America...grab your ankles and squeal
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