No wonder they don't want Palin giving interviews.....

from ThinkProgress:



Palin’s first gaffe: Claims Fannie Mae, Freddie Mac are taxpayer-funded.»

Speaking in Colorado this weekend, Gov. Sarah Palin tried to explain the recent federal bailout by claiming that lenders Fannie Mae and Freddie Mac had “gotten too big and too expensive to the taxpayers.” The companies, however, “aren’t taxpayer funded but operate as private companies. The takeover may result in a taxpayer bailout during reorganization,” McClatchy noted. Palin’s satement “is somewhat nonsensical because up until yesterday there was sort of no public funding there,” said Andrew Jakobovics of the Center for American Progress Action Fund. “The ‘too expensive to tax payers,’ I don’t know where that comes from.”


http://thinkprogress.org/2008/09/08/palin-freddie-mac/

...is that since she talked about FM and FM--they probably spent several hours briefing her
on the situation.

...and she comes out and says this. Something that I would have known was false.

Quick! Someone make me the Vice President! :eyes:

I am a former homecoming queen. :blush:

I suppose that would only get me a cabinet position though...

If you kept your firm body, you too, could be VP!

(As an aside, I am being sarcastic. Never should appearance matter one whit, to one's competence at life. Shouldn't, but sadly does)

that Joe and Jane sixpack get to bail them out of the 5 trillion dollar hole they're in.

as someone said.

as my hubby pointed out and others here have also said.

i am not even getting what she is trying to say. but surely she knows we dont have govt owned companies.... ????

So, when she fucks up, we compare it to the silverspoon sociopath and somehow, it just doesn't seem that bad. Great goddess, we need someone smart enough to run our country.

russia.... that big ole country right beside her that makes her have her foriegn policy credentials.

It's unreal. If you want to read it, here it is:

Me

"The fact is that Fannie Mae and Freddie Mac have gotten too big and too expensive to the taxpayers. The McCain-Palin administration will make them smaller and smarter and more effective for homeowners who need help." Palin Oops

Him

They may operate as private companies, but they were created by the federal government, and are regulated by the feds.

Consequently Fannie Mae was create by the federal government, and was in the business of buying FHA-insured loans and support government-subsidized housing programs.


Furthermore, Freddie Mac and Fannie Mae both are regulated with legislation targeted for these specific institutions: namely the Federal Housing Enterprises Financial Safety and Soundness Act, and a few others.

Other institutions do not have that level of federal oversight as a part of their organizational structure, namely the Director of the Office of Federal Housing Enterprise Oversight.

If you did a five-minute fact check, you wouldn't have gone all out and made an issue over a comment that is essentially correct.


Me:

How much money did the fed spend on those two private companies that was too expensive before last weekend?

Him:

The organization stucture for both Fannie Mae and Freddie Mac are huge.

So she's right there as well.

The are not totally "private" organizations.

This is a prime example how people get so bound-up in gotcha politics, that they end up catching themselves.

Me:

How much money did the fed spend on those two private companies that was too expensive before last weekend?

Some other dude:


So when Obama misspoke about his "Muslim Faith", we should take him for what he said, not by what he really meant.

Wow, so Obama Really is a Muslim. I would not have believed it if I had not heard it from his mouth to my ears.

Him:

Seeing that Fannie Mae was not a private "business" when it was initially started in 1938, I'd say "billions".

It wasn't until 1968 that Fannie Mae was "rechartered" as a "private company", which it is not. It is quasi-private.

From Freddie Mac's own website:
---------------------------------------------------------------
http://www.freddiemac.com/news/pdf/cbo-final-pearcemiller.pdf

"In contrast, we estimate that the value Freddie Mac and Fannie Mae indirectly receive from federal
sponsorship in the form of their funding advantage ranges from $2.3 billion to $7.0 billion
annually."
---------------------------------------------------------------

Keep diggin' that hole Fuzz. Keep diggin' the hole...

So again, Palin is correct.

Me:

Indirectly? You know what that means right? Tax benefits and other perks, right? That would mean that Exxon would also fall into that category.

http://banking.senate.gov/conf/

Gramm-Leach-Bliley Financial Services Modernization Act

The regulation that lead to the problem.

Him:

Fuzz:

"Indirectly? You know what that means right? Tax benefits and other perks, right? That would mean that Exxon would also fall into that category.:

How about a $6.5 billion subsidy every year?

Or access to a $2.5 billion dollar credit line with the federal government?

Or an implied federal guarantee of liquidity?

From the 2003 CBO report

http://www.cbo.gov/ftpdocs/46xx/doc4642/10-23-GSE.pdf

"The value of the federal subsidy to the GSEs can be approximated by comparing the enterprises’ actual funding costs with those they would face as private intermediaries.In May 2001, CBO estimated that difference—on the basis of a credit rating of AA for the housing GSEs—to be $10 billion to $15 billion per year from 1998 to 2000. Adjusted for the growth of the enterprises (but with any increases in risk ignored), the current annual subsidy is, at a minimum, above the upper end of that range."


http://www.cagw.org/upload/FannieandFreddie.pdf

"All that’s gold does not glitter, at least to the American taxpayer. Fannie Mae and Freddie Mac are supported by government subsidies that the Congressional Budget Office (CBO) pegged at $6.5 billion in 1995. Expansion into new markets and increasingly risky investments could stifle competition and send taxpayers’ liabilities into the hundreds of billions of dollars, repeating the all-too-recent savings and loan (S&L) debacle."

Not to mention Freddie Mac and Fannie Mae's exemption from state and local taxes (not a deal, but an total exemption), and an exemption from SEC registration.

You mean, those subsidies there Fuzz?

Need a bigger shovel to keep digging?
Psst - the ice you're standing on is kinda thin.)

Me:

Despite the fact that Fannie Mae is not explicitly backed or funded by the US Government, nor do the securities it issues benefit from any statutory government guarantee or protection, most investors believe that, because it is a "quasi" governmental agency, it has an implicit government guarantee. But Fannie Mae receives no direct government funding or backing. And Fannie Mae securities carry no government guarantee of being repaid. This is explicitly stated in the law that authorizes GSE's. Nevertheless, there is still a wide perception that these notes carry an implied government guarantee, and the vast majority of investors believe that the government would prevent them from defaulting on their debt. But the fact is, 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 other than Fannie Mae. Yet a majority of investors believe that the government would prevent a disastrous default. Don't just take my word for it; listen to what then Federal Reserve Board Chairman Alan Greenspan said when testifying under oath before the House and Senate Banking Committee in 2004: "The markets believe that the US Government would never allow Fannie Mae or Freddie Mac to fail."

Now here is where things get really confusing and the waters get muddied. Remember Fannie Mae gets no direct federal government money. However, Fannie Mae and the securities it issues do receive the benefit of government subsidies. Even though there have been no federal budget appropriations for cash payments or government guarantees, the government provides a considerable unpriced benefit to both Fannie Mae and Freddie Mac. That benefit or subsidy is this: Fannie Mae has looser restrictions placed on its activities than normal financial institutions allowing it to sell mortgage-based securities with half as much capital backing them up as would be required of other financial institutions. What's that worth? The Congressional Budget Office pegs this subsidy to be worth $6.5 billion annually."

https://www.dws-investments.com/EN/market-insight/fannie-mae-freddie-mac-are-no-laughing-matter.jsp

Exxon Mobil and other oil companies may benefit from $2.6 billion in subsidies in the energy bill that is nearing passage in Congress. The subsidies, designed to encourage domestic oil and gas production, were part of an oil industry "wish list," according to David Hamilton, the Sierra Club's energy programs director.

http://www.washingtonpost.com/wp-dyn/content/article/2005/07/28/AR2005072802085.html

I just fell in the cold cold water. Oh, and sorry it took so long, I bathed. Don't I smell nice?

Him:

"it has an implicit government guarantee. But Fannie Mae receives no direct government funding or backing. And Fannie Mae securities carry no government guarantee of being repaid."

Ummm...dude? Did you bother to read the stuff from the CBO?

You know, the Congressional Budget Office?

As far as "implict: is concerned, the reason why an implicit guarantee exists is because other such quasi-private companies have fallen apart, and the federal government stepped in and bailed them out. It's happened at least once, to my knowledge.

And, as predicted, the federal government stepped in and bailed out both Freddie Mac and Fannie Mae.

Plus, you've completely ignored the fact that prior to 1968, Fannie Mae was completely subsidized by the federal government.

You've also forgotten the 2.5 billion dollar federal credit line.

So, how does basically agreeing with me prove Sarah Palin wrong?

Hummmmmm?


Me:

I asked how much the federal government spent on the Freddie and Fannie, you responded with"

"In contrast, we estimate that the value Freddie Mac and Fannie Mae indirectly receive from federal
sponsorship in the form of their funding advantage ranges from $2.3 billion to $7.0 billion
annually."

and told me to dig a hole.

I told you that indirectly means that is not a direct payment and similar to tax breaks received by corporations like Exxon.

So you went on to change the term to subsidy, which is another term for the same thing I was explaining and said that they have an "implied federal guarantee of liquidity". I showed you that Greenspan even said that the law doesn't say that AND that they don't receive any direct payment as you have implied throughout this thread.

Yes the Fed came in and bailed them out. They were too big to fail. Is it wrong that they did that? I don't think so.

Is Palin's quote wrong? Sure. She said:

"The fact is that Fannie Mae and Freddie Mac have gotten too big and too expensive to the taxpayers."

Too big? Probably. Too expensive? Well, certainly now they have because they have to be bailed out after the deregulation bill pushed through Congress by Phil Graham lead to Wall Street 'getting drunk' (Thanks Bush for that quote). But it does show that she doesn't get it, and neither do you.

"The McCain-Palin administration will make them smaller and smarter and more effective for homeowners who need help."

This part just isn't explained as to how, just campaign rhetoric.

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That's it so far. And if you read this, I think you're crazy!!!! ;)