"On May 20, 2009, Public Law No. 111-21, the Fraud Enforcement and Recovery Act of 2009, was enacted into law, creating the Financial Crisis Inquiry Commission (FCIC). According to the Act, the FCIC was established to “examine the causes, domestic and global, of the current financial and economic crisis in the United States.” The law requires that today, December 15, 2010, the FCIC submit “to the President and to the Congress a report containing the findings and conclusions of the Commission on the causes of the current financial and economic crisis in the United States.”
This primer contains preliminary findings and conclusions released by Vice Chairman Bill Thomas, Commissioner Keith Hennessey, Commissioner Douglas Holtz-Eakin, and Commissioner Peter J. Wallison, and represents a portion of the findings and conclusions resulting from our work on the FCIC. As the transmission of the report of the FCIC to the President and Congress requires a majority vote of the Commission, these findings and conclusions do not constitute the Commission’s report. Rather, this document is an effort to reflect the clear intention of our enabling legislation."
"The GSEs invested in high-risk mortgages in two ways. The first was by doing exactly what the GSEs had done for decades: guaranteeing loans. The GSEs would provide a credit guarantee on mortgage pools that were sold to them by originators and then issued back to the lender as a GSE-guaranteed MBS, or “agency MBS.” The GSEs would charge a guarantee fee in exchange for taking on the credit risk of the pool of mortgages. But in an effort to meet their affordable housing goals, the GSEs began guaranteeing ever-riskier loans.
The second way the GSEs invested in high-risk mortgages was through MBS backed by subprime and Alt-A mortgages, which they held on balance sheet. Although some of these loans qualified for affordable housing goals, these investments were also, to a large extent, pure interest-rate arbitrage, given the low cost of funding for the GSEs.
The GSEs were not the only means by which the government supported the financing of high-risk mortgages. Through the GSEs, FHA loans, VA loans, the Federal Home Loan Banks, and the Community Reinvestment Act [CRA], among other programs, the government subsidized and, in some cases, mandated the extension of credit to high-risk borrowers, propagating risks for financial firms, the mortgage market, taxpayers, and ultimately the financial system.
Wow, did you really just link to the report generated by the Republican members of the FCIC? With a straight face??!!!
You have linked to one of the most ignorant and worst-sourced documents I've ever seen; a propoganda piece, put out by the Republican members on the committee only, which represents nothing more than an expression of the same ideology you share. It gives no causal evidence at all to support your position, but simply repeats facile statements over and over again as if they provided true insight into a situation.
I retract my earlier suspicions regarding your intelligence, if you believe this is what passes for evidence to support your position. And if you really want to get into the weeds on this issue, let me know - and I will point out the errors with both their conclusions and yours, in detail.
Regarding your last sentence, I would like to take you up on your offer "to get into the weeds on this issue".
This might be an excellent opportunity for you to present your side, or that of the Democrats, for that matter, which is fleshed out in the final report (the Republicans published a dissent so you could work from one document). We await your analysis.
