JohnnyWrath
01-04-2008, 03:13 AM
Between them, Fannie Mae and Freddie Mac back more than $4 trillion in mortgages. If they fail, it could force an unprecedented taxpayer-funded bailout. And they are much closer to failure than most people realize.
Some saw this coming, including presidential candidate Ron Paul. As far back as 2002, Mr. Paul - whose candidacy I'm not actively supporting - predicted the Federal Reserve would blow up the housing bubble.
Besides the Fed's low-interest-rate policy, which encouraged excessive borrowing to buy homes, its refusal to regulate mortgages gave lenders license to sell whatever mortgage products they could dream up, no matter how risky. Mr. Paul was dead-on with his prediction that the Fed was blowing a new bubble and that it would burst violently.
SOURCE (http://www.baltimoresun.com/news/opinion/oped/bal-op.fannie04jan04,0,1654729.story)
Some saw this coming, including presidential candidate Ron Paul. As far back as 2002, Mr. Paul - whose candidacy I'm not actively supporting - predicted the Federal Reserve would blow up the housing bubble.
Besides the Fed's low-interest-rate policy, which encouraged excessive borrowing to buy homes, its refusal to regulate mortgages gave lenders license to sell whatever mortgage products they could dream up, no matter how risky. Mr. Paul was dead-on with his prediction that the Fed was blowing a new bubble and that it would burst violently.
SOURCE (http://www.baltimoresun.com/news/opinion/oped/bal-op.fannie04jan04,0,1654729.story)