Anti-Obama downballot boomerang?

A mostly political Weblog.
Oct. 14 2008 6:11 AM

Anti-Obama Boomerang?

Why more votes for McCain might mean more Dems in Congress.

(Continued from Page 84)

Of course they would. When you hear the candidates talk about sending illegals to the "back of the line,"  remember that there are two lines: 1) An initial, typically very long line in which foreigners patiently wait years, sometimes decades, to get green cards or other documents that enable them to live and work here legally, and 2) a shorter second line of people who have green cards and want to become citizens. Neither Obama nor McCain would send illegals to the back of the first line--that would, in many cases, be tantamount to deporting them. On the contrary, the illegals who are already here get to pay a not-huge fine and skip Queue #1 entirely. They may go to the back of Queue #2, but that's a queue they can wait out while working legally in the richest country on Earth--a reward the poor suckers who obeyed the law and are still lining up outside U.S. consulates abroad don't get. ...

Just because both candidates say something doesn't mean it's not crap! ... 2:33 A.M.  link

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kf seems to have reappeared on Josh Marshall's Talking Points Memo blogroll after a mysterious absence. Thanks! ...  12:34 A.M.

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Monday, July 14, 2008

Asymptotically approa ching ... damage control: Calculated Risk has what seems like a judicious assessment of Krugman's Fannie Mae column.

Fannie and Freddie had about as much to with the "explosion of high-risk lending" as they could get away with. We are all fortunate that they couldn't get away with all that much of it. ... [snip]

But they didn't like losing their market share, and they pushed the envelope on credit quality as far as they could inside the constraints of their charter: they got into "near prime" programs (Fannie's "Expanded Approval," Freddie's "A Minus") that, at the bottom tier, were hard to distinguish from regular old "subprime" except--again--that they were overwhelmingly fixed-rate "non-toxic" loan structures. ...

Furthermore, both GSEs [Government Sponsored Enterprises--e.g. Fannie Mae and Freddie Mac] were major culprits in the growth of the mega-lenders. Over the years they were struggling so hard to maintain market share, they were allowing themselves to experience huge concentration risks. As they catered more and more to their "major partners"--Countrywide, Wells Fargo, WaMu, the usual suspects--they helped sustain and worsen the "aggregator" model in which smaller lenders sold loans not to the GSEs but to CFC or WFC, who then sold the loans to the GSEs. ...

I think we can give Fannie and Freddie their due share of responsibility for the mess we're in, while acknowledging that they were nowhere near the biggest culprits in the recent credit bubble. [E.A.]

In a post-column mop up operation, Krugman cites Calculated Risk's analysis and glibly says, "That's not really in contradiction to what I said  ..." Really? What Krugman said was:

Fannie and Freddie had nothing to do with the explosion of high-risk lending a few years ago ....

My turn: But didn't I say that "Fannie Mae was a huge buyer of subprime mortgages"? I did. How does this jibe with Calculated Risk's assertion that Fannie Mae and Freddie Mac pushed the envelope but that the envelope still constrained them at least somewhat?  I don't know the answer ... at least not yet... but at least part of it seems   to be  that Fannie Mae mainly purchased subprime mortgage securities--i.e. mortgages that had been aggregated and repackaged as bonds--but that it didn't buy actual subrime mortgages directly. In theory buying the bonds backed by lousy mortgages might have been safer than buying the mortgages, although this 2007 Fortune article seems to argue that the protection was largely illusory, and that through the bond purchases

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