Thursday, March 26, 2009

In Case There's Any Doubt

I've been saying for a while that the mortgage crisis occurred because government distorted the market. In case there's any doubt, here's some stats about the magnitude of its involvement:

Government sponsored enterprises (GSEs) Fannie Mae and Freddie Mac hold $5.4 Trillion of the $12.0 Trillion worth of U.S. mortgages.

Fannie and Freddie originated or funded 90% of subprime mortgages.

Source: Investor's Business Daily http://www.ibdeditorials.com/IBDArticles.aspx?id=322782906144146

3 Comments:

Anonymous David Boxenhorn said...

Actually, that simplifies things a lot. It means we can solve much of the crisis by winding up Fannie and Freddie, if we choose to do so.

March 26, 2009 10:55 AM  
Blogger Li Kim Grebnesi said...

Unfortunately, Barney Frank says that winding up Fannie and Freddie is a non-starter. You and I, at least, can take credit for trying to prevent Barney from ever having got into a position of power - you may recall that in his first Congressional election we addressed envelopes for one of his opponents!

March 26, 2009 6:56 PM  
Anonymous David Boxenhorn said...

I remember that well. Back when I was at the nexus of power... and didn't know it.

In any case, there's always another election, one can always hope.

March 27, 2009 2:18 AM  

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