Tuesday, March 17, 2009

Barney's Frank says he'll fix Fannie Mae; breaks irony-meter

A headline in this evening's Wall Street Journal reads "Frank Prepares Bill to Revamp Fannie, Freddie".

Rep. Barney Frank, chairman of the House Financial Services Committee, said he hopes to introduce legislation later this year to restructure government-backed mortgage investors Fannie Mae and Freddie Mac... "The current model is broken," the Massachusetts Democrat said in an interview Tuesday...

...Federal regulators seized management control of Fannie and Freddie in September as heavy losses stemming largely from mortgage defaults ate through their thin layers of capital. For 2008, Fannie and Freddie reported combined losses of about $108 billion, forcing the Treasury to pump in capital to keep them operating...

Anthony Sanders, a finance professor at Arizona State University, recommends leaving Fannie and Freddie intact but subjecting them to better regulation and requiring them to hold more capital. He also suggests barring them from holding large amounts of mortgages and related securities. That would leave the companies to focus on creating and guaranteeing mortgage securities that would be held by others.

Better regulation and more capital?

Better regulation and more capital??

Better regulation and more capital???

In hearing after hearing, Frank and his Democratic cronies blocked "better regulation" and higher capital requirements for the GSEs. Time after time, month after month, year after year.

Here's Rep. Barney Frank (D-MA) in 2003, helping to block a GOP bill ("H.R. 2575—THE SECONDARY MORTGAGE MARKET ENTERPRISES REGULATORY IMPROVEMENT ACT") that would require -- you guessed it -- enhanced regulatory oversight and higher capital-to-asset thresholds.

I think it is clear that Fannie Mae and Freddie Mac are sufficiently secure so they are in no great danger... I don't think we face a crisis; I don't think that we have an impending disaster. ...Fannie Mae and Freddie Mac do very good work, and they are not endangering the fiscal health of this country.

Here's Rep. Barney Frank testifying later:

I don't see any financial crisis.

And now, Barney Frank, the same crustacean that helped cause the mortgage meltdown in the first place, suggests the kind of oversight that he helped block. Brilliant.

Can someone explain to me why Barney Frank isn't in prison?

Linked by: Just One Minute. Thanks!

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