McCain calls those who supported bailout 'co-conspirators' in causing problems at Fannie/Freddie

[w¡n9Nµ7 §£@¥€r 123]

McCain spends most of his time at his rallies and town hall meetings lambasting his rival, often calling him a "co-conspirator" with congressional Democrats in what he argues are the seeds of the financial crisis at mortgage giants Fannie Mae and Freddie Mac.

"Will you assure us," one woman asked, "that, as president, you will take immediate action to investigate, prosecute and name the names of the people actually responsible?"

"I will," McCain answered.

"The same people that are now claiming credit for this rescue are the same ones that were willing co-conspirators in causing this problem that it is," he said, raising his voice to be heard over the crowd. "You know their names. You will know more of their names."

http://www.washingtonpost.com/wp-dyn/conte...0903169_pf.html

[EstebanTrabajos 7]

Nap time grandpa!

[kaydee457 13]

McCain spends most of his time at his rallies and town hall meetings lambasting his rival, often calling him a "co-conspirator" with congressional Democrats in what he argues are the seeds of the financial crisis at mortgage giants Fannie Mae and Freddie Mac.

"Will you assure us," one woman asked, "that, as president, you will take immediate action to investigate, prosecute and name the names of the people actually responsible?"

"I will," McCain answered.

"The same people that are now claiming credit for this rescue are the same ones that were willing co-conspirators in causing this problem that it is," he said, raising his voice to be heard over the crowd. "You know their names. You will know more of their names."

http://www.washingtonpost.com/wp-dyn/conte...0903169_pf.html

Context, context, context! He's talking about Chris Dodd and my favorite gay congressman, Barney Frank, amongst others.....

They're all grandstanding and slapping each other on the back for the great job they did cobbling together the "rescue plan" whilst they were arguably the principals in the cause of this debacle........Follow the money............

But of course you knew that, didn't you?

Edited October 10, 2008 by kaydee457

[one...two...tree 2,762]

No actual guarantees

Fannie Mae receives no direct government funding or backing; Fannie Mae securities carry no government guarantee of being repaid. This is explicitly stated in the law that authorizes GSEs, on the securities themselves, and in many public communications issued by Fannie Mae.

Neither the certificates nor payments of principal and interest on the certificates are guaranteed by the United States government. The certificates do not constitute a debt or obligation of the United States or any of its agencies or instrumentalities other than Fannie Mae.

Assumed guarantees

There is a wide belief that FNMA securities are backed by some sort of implied federal guarantee, and a majority of investors believe that the government would prevent a disastrous default. Vernon L. Smith, 2002 Nobel Laureate in economics, has called FHLMC and FNMA "implicitly taxpayer-backed agencies."^[15] The Economist has referred to "[t]he implicit government guarantee"^[16] of FHLMC and FNMA. In testimony before the House and Senate Banking Committee in 2004, Alan Greenspan expressed the belief that Fannie Mae's (weak) financial position was the result of markets believing that the U.S. Government would never allow Fannie Mae (or Freddie Mac) to fail.^[17]

Federal subsidies

The FNMA receives no direct federal government aid. However, the corporation and the securities it issues are widely believed to be implicitly backed by the U.S. government. In 1996, the <a href="http://en.wikipedia.org/wiki/Congressional_Budget_Office" title="Congressional Budget Office">Congressional Budget Office wrote "there have been no federal appropriations for cash payments or guarantee subsidies. But in the place of federal funds the government provides considerable unpriced benefits to the enterprises... Government-sponsored enterprises are costly to the government and taxpayers... the benefit is currently worth $6.5 billion annually."^[18]. Fannie Mae and Freddie Mac are allowed to hold less capital than normal financial institutions: e.g., it is allowed to sell mortgage-backed securities with only half as much capital backing them up as would be required of other financial institutions. Specifically, regulations exist through the FDIC Bank Holding Company Act that govern the solvency of financial institutions. The regulations require normal financial institutions to maintain a capital/asset ratio greater than or equal to 3%.^[19] The GSEs, Fannie Mae and Freddie Mac, are exempt from this capital/asset ratio requirement and can, and often do, maintain a capital/asset ratio less than 3%. The additional leverage allows for greater returns in good times, but put the companies at greater risk in bad times, such as during the current subprime mortgage crisis. FNMA is also exempt from state and local taxes. In addition, FNMA and FHLMC are exempt from SEC filing requirements; however, both GSEs voluntarily file their SEC 10-K and 10-Q.

http://en.wikipedia.org/wiki/Fannie_Mae