Fannie and Freddie already cost US Taxpayers $135 Billion - UK fails to even start counting their taxpayers' exposure!

Read the really harrowing report from the Wall Street Journal, linked here.

Note the huge gaping hole in Osborne's spending cut-backs announced this week. Not one word or even a nod towards the coming UK property price collapse and the disastrous consequences for the British economy!

Fannie Mae and Freddie Mac Fellatio!

Yesterday was not just the anniversary of the beginning of The Blitz of Britain by the Germans 70 years ago, no doubt being gleefully drooled over on the next morning by German leaders as the aerial reconnaissence photographs revealed the gruesome details of the death and destruction wrought by Germany's might, just as this morning, no doubt, a new generation in Berlin and Frankfurt relish the economic humbling of the City of London brought about by the humiliation of Britain's Chancellor of the Exchequer, George Osborne, in Brussels yesterday in an event that appears to have deliberately taken place on this hugely significant and bloody anniversary, no indeed, for it also marked the second anniversary of Fannie Mae and Freddie Mac being taken into the custody of the US Government.

Does yesterday then perhaps also mark the end of the era of US moral leadership, might and world domination? Fannie and Freddie brought the pride of home ownership to many lower income Americans over many decades. They helped in pulling the country out of the Great Depression of the nineteen-thirties. Has the US Government, Congress, the Federal Reserve or any other body used the past two years to address the underlying problems of these two grossly over indebted mortgage suppliers? It appears not.

In fact the very opposite has been the case. Over the past two years these now government controlled institutions have been the major supplier or underwriters of most of the new mortgages recently issued, therefore merely compounding their underlying problems, read a Bloomberg report from here, tellingly titled "Subprime 2.0 Is Coming Soon to Suburb Near You: by Edward Pinto".

The housing crisis, such as that in the US and in Britain is the main underlying economic crisis on both sides of the Atlantic and it appears for the entire english speaking world, yet neither the US nor the UK Governments will face up to that fact. Solutions have been regulary suggested from this blog. Most recently David Cameron and Nick Clegg have been urged to return their property portfolios to the state from which they have indirectly been drawn. Other Cabinet Ministers would be wise to follow suit so that they can address the economic disaster in which the country now lies with clear eyes and from a sensible starting point.

A man is worth more than the value of his home or the marque of his car. Economic might when misused can be overcome by ordinary people pulling together, that was the lesson of The Blitz.
We can overcome this economic mess by grasping the fact that homes have values because they are secure, situated near schools and jobs priced at a wage which makes them affordable. Bricks and mortar torn down and resold with flat screen TVs or used modern kitchen gadgetry in an environment where no building is taking place have little value at all. Look round your possessions at home today, what are they really worth and if mortgaged to a typical bank, building society, or even Fannie or Freddie ------ what could these failing institutions obtain for their supposed secured assets when society has no hope?

Obama’s Ties to ACORN Show Complicity in Financial Crisis Caused by Bad Mortgages

By Bob Dienstbach
Guest Blogger

While Americans were busily distracted by undercover videos exposing outrageous behavior on the part of ACORN this week, Congress appropriated ALL lending authority for higher education. ACORN (read Obama) forced banks to make high risk loans to pimps and prostitutes to buy homes (foreclosed now…causing massive banking bailouts at taxpayer expense), and now President Barack Obama wants to put pimps and prostitutes in college.

The mortgage crisis that sent a shock wave through Wall Street and panicked world financial markets with the Community Reinvestment Act signed into law in 1977 by President Jimmy Carter. The CRA was Carter’s answer to a grassroots activist movement started in Chicago (Jesse Jackson’s Rainbow Coalition), and forced banks to make loans to low income, high risk customers. PhD economist and former Texas Senator Phil Gramm called it “a vast extortion scheme against the nation’s banks.” It is no coincidence that Carter played the race card the same week in September 2009 that ACORN was under attack.

In 1991, Acorn took over the House Banking Committee room for two days to protest efforts to scale back the CRA [Note: Obama, by the way, represented ACORN in the Buycks-Roberson v. Citibank Fed. Sav. Bank, 1994 suit against redlining]. When banks don’t lend to pimps and prostitutes, Obama calls it red-lining. Most significant of all, ACORN was the driving force behind a 1995 regulatory revision pushed through by the Clinton Administration that greatly expanded the and laid the groundwork for the CRA/Fannie Mae/Freddie Mac-borne financial crisis we now confront [Note: Again, Obama was the attorney representing ACORN in this effort]. With this new authority, ACORN used its ACORN Housing subsidiary to promote subprime loans more aggressively and, as we now know, even to pimps and prostitutes.

Ironically, an enthusiastic Fannie Mae Foundation report singled out one paragon of nondiscriminatory lending, which worked with community activists and followed “the most flexible underwriting criteria permitted.” That lender’s $1 billion commitment to low-income loans in 1992 had grown to $80 billion by 1999 and $600 billion by early 2003.

Remember, it was Obama’s Chicago neighbor, the Rainbow Coalition run by Jesse Jackson, that forced private lenders to make risky loans. The lender that Fannie Mae was speaking of was Countrywide, which specialized in subprime lending and had a working relationship with ACORN, who was represented by Obama. When Congress voted to defund ACORN this week, Jesse Jackson Jr. voted against the majority opinion (i.e., to allow ACORN to continue to receive your tax dollars).

Freddie Mac Chief found dead

The BBC has the report with no confirmation of reports that the 41 year old Mr Kellerman had committed suicide.

After the budget and the IMF confirmation of a worldwide recession on top of its dire predictions of yesterday, it appears that the Government has abandoned all pretence of coping with reality.... e.g. the Identity Card Scheme incredibly continues.

The IMF within an hour of the budget contradicted the Chancellors growth figures predicting a contraction of 4.1% this year continuing into 2010 with a further contraction of 0.4%.... God only knows what they must make of his prediction of racing growth , way above trend of 3.5% for 2011.

It appears the Crash is about to enter its next phase.

Freddie Mac CEO Quits

After only six months of "conservatorship" the Chief Executive of the huge US mortgage lender has had enough. The CNN report of the resignation is linked here.

As this blog has frequently pointed out the seeds of the present Crash may be partly found in the creation of the federally subsidised mortgage lenders for low income US families, known as Fannie Mae and Freddie Mac, which served (together with the industrialisation required to mount WWII) to drag the western world out of the Great Depression.

The loans made by these organisations were never properly carried on US Government books and the situation was further compounded when greater quantities of such lending were undertaken in recent years in what has been called the sub-prime crisis.

We are therefore trying to grapple with the results of decades of irresponsible lending, will the next CEO last any longer?