re: #417 Rightwingconspirator

But-Would it be fair to say the Fannie & Freddie had zero negative impact on the housing bust? I think that would be an exaggeration. Would you agree?

The housing bust was in no way the sum total of the financial disaster; the packaging of risk into derivatives that masked the risk was the real disaster. The housing bust was the trigger.

It seems to me they shared a part by giving loans to those who simply could not afford them, or at the least had inadequate backup in the event of a layoff or pay cut. I observed many loan qualification standards fell to a “wink and a nod” all across the home real estate landscape.

But their loans had a lower default rate than the industry average.

Of course Wall street made derivatives out of bad home loans overlapping the whole damn thing. Phil Angelides is right about this-We do not yet have adequate reform on Wall street and we do risk a repeat.

Absolutely. And not just bad home loans; that’s one of the things that I’m pointing out. The derivatives were made out of peso stocks, out of lots and lots of random junk. It was just that the mortgages were a big chunk, and their blowup started the avalanche.