Obi-Wan Kenobi
/ 178.36.7.* / 2010-03-23 15:35
Fixing Fannie and Freddie: A Litany of Lies.
Geithner is expected to say:
“Private gains can no longer be supported by the umbrella of public protection, capital standards must be higher and excessive risk-taking must be appropriately restrained,” Geithner said in testimony prepared for the House Financial Services Committee that was obtained today by Bloomberg News. The hearing is scheduled for tomorrow.
Really Tim? That's the not the problem and you know it. The problem lies here:
In a recent speech, David Stevens, the FHA's commissioner, recalled meeting a group of international bankers who "peppered me with questions -- very difficult questions" about what the U.S. government was doing to bring back their trust.
They all have been burned, he noted, after buying mortgage securities with triple-A ratings that turned out to be junk.
"We are at the point right now," Stevens said, "where no one trusts the American housing finance system."
That's the problem right there.
As FHLB Seattle and San Francisco have shown, literally everyone seems to have bought garbage that was labeled "AAA".
Where's the culpability and responsibility?