The potential liabilities of Fannie Mae and Freddie Mac total about $5 trillion. Putting that in perspective (as the Wall Street Journal did pre-bailout), until a week ago, the entire United States national debt equaled $9.5 trillion. We’ve now increased it by more than 50 percent.
Andrew McCarthy says Book 'Em
Well the political class, which created the disaster that is Fan and Fred and seems desperate to preserve them,
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As Democrats continue to champion these “quasi-government” entitles, the Bush administration quietly announced on Friday (as all eyes were on Lehman) that though the government is now running the mortgage giants — and thus all of us are officially on the hook for their liabilities — it sees no need to incorporate their balance sheets and the business operations in the federal budget.
Does that sound familiar? It should. When managers who don’t happen to run the United States government decide to park their losses and liabilities off the books, we call that corporate fraud. When they did it at Enron (in a scam involving a pittance of what we’re talking about here), the execs went to jail for a long time. Even their accounting firm was prosecuted, causing countless employees who had nothing to do with the scheme to be put out of work.
I don't trust public-private partnerships because they seem to benefit only the politically well-connected who take out enormous fees for putting deals together and some enormous salaries and bonuses.
I don't understand why we can't go after them for abuse of trust in the same manner we went after the executives of Enron .
When I read about Jamie Gorelick, Mistress of Disaster I get so mad at "the political class", I could, as my mother would say, just spit. This is a damning piece.
It’s not often that one person plays key roles in two — count ‘em, two — trillion-dollar disasters. Welcome, my friends, to the world of well-connected Democrat Jamie Gorelick.
Investors' Business Daily says it was the obsession with multiculturalism by those in the Clinton administration who dictated new rules and regulations that led to this mess.
Tough new regulations forced lenders into high-risk areas where they had no choice but to lower lending standards to make the loans that sound business practices had previously guarded against making. It was either that or face stiff government penalties.
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Apparently one Clinton crony Franklin Delano Raines took the helm in 1999 at Fannie Mae, for example, he used it as his personal piggy bank, looting it for a total of almost $100 million in compensation by the time he left in early 2005 under an ethical cloud.
Other Clinton cronies, including Janet Reno aide Jamie Gorelick, padded their pockets to the tune of another $75 million.
Raines was accused of overstating earnings and shifting losses so he and other senior executives could earn big bonuses.
Clearly if the executives in charge were overstating earnings and shifting losses so they could earn big bonuses as alleged, a criminal investigation should begin immediately. Book Em is right.
Just Barking Mad sums it all up
Let’s be clear. The risky financial instruments that are now the major source of such pain and misery were pushed hardest by a former Clintonista trying not only further a Liberal social engineering plan but to enrich her own self in the process. America…what a country!