A few links for Fannie and Freddie

Link dump on the Fannie & Freddie mess (updated and bumped):

Jerry Pournelle has an overview. And more:

As I surmised, the bailout -- good idea or poor -- can't be made to happen until Barney Frank and Senator Dodd are allowed to wet their beaks. The Democrats want part of that pie. Obama's leadership abilities were put to the test, and apparently found wanting: even in the White House, with what all of them concede to be the financial health of the Republic at stake, no agreement is possible.… When the game is to restore confidence, it's important to act quickly. When the ship of state is being blown onto the rocks, it may be best to drop anchor; it may be best to raise sails and beat to windward; either course of action may work. Both will not work. Doing nothing is certain disaster.

Did Dr. Pournelle exclude a middle? Trying to do both at once, yes, sounds like certain disaster. Or did his sailing metaphor take control of my imagination, leading me to think that another possibility might be to reef up and, since our sailing vessel has been modified since the last time it hit the rocks, use our new engine to keep us off the lee shore. The engine being the SEC and all of the changes and controls on the securities markets that have been put in place since 1929. On the gripping hand, sometimes nothing is the best thing to do. Maybe the horse will learn to sing. One does not want to fall victim to what I have heard referred to as "Yes, Minister" syndrome: "We must do something. This is something. Therefore, we must do it." What would Calvin Coolidge do? Cool Cal went by the book, the book that had not been written yet when he was alive, the book that says on its cover, "Don't Panic."

Who caused "the biggest financial crisis since the Great Depression?" by Roger Kimball at PJ Media. Lots of comments; links to a video called "Burning Down the House," also linked below.

Andrew Cuomo and Fannie and Freddie: How the youngest Housing and Urban Development secretary in history gave birth to the mortgage crisis, by Wayne Barrett in the Village Voice.

How the Democrats Created the Financial Crisis: by Kevin Hassett at Bloomberg. Glenn Reynolds has a couple of reader comments.

A Mortgage Fable, editorial in the WSJ:

Once upon a time, in the land that FDR built, there was the rule of "regulation" and all was right on Wall and Main Streets. Wise 27-year-old bank examiners looked down upon the banks and saw that they were sound. America's Hobbits lived happily in homes financed by 30-year-mortgages that never left their local banker's balance sheet, and nary a crisis did we have.

Then, lo, came the evil Reagan marching from Mordor with his horde of Orcs, short for "market fundamentalists." Reagan's apprentice, Gramm of Texas and later of McCain, unleashed the scourge of "deregulation," and thus were "greed," short-selling, securitization, McMansions, liar loans and other horrors loosed upon the world of men.

Now, however, comes Obama of Illinois, Schumer of New York and others in the fellowship of the Beltway to slay the Orcs and restore the rule of the regulator. So once more will the Hobbits be able to sleep peacefully in the shire.…

The Real Culprits In This Meltdown, editorial in IBD. "Big Government: Barack Obama and Democrats blame the historic financial turmoil on the market. But if it's dysfunctional, Democrats during the Clinton years are a prime reason for it."

Why our financial system nearly collapsed, the Anchoress: timeline, links, comments.

Doug Ross has a number of posts with graphics:

Jamie Gorelick, Mistress of Disaster.
Root Cause.
Fannie Mae: the New York Times rides to the rescue of the GOP.
Any Questions?
'Ya think?' Department.
Legacy.
The tale of Jamie Gorelick just keeps getting better and better.

Fannie Mae and the Vast Bipartisan Conspiracy: a list of villains in boldface, by Jack Shafer in Slate. Jamie Gorelick's photo is at the top.

Friends of Barack, editorial in the WSJ.

Obama Dollars, by Mac Fuller in the American Thinker.

Arnold Kling links to (among others) Tyler Cowen, who quotes Mindles H. Dreck on the effects of regulation. With all the screaming for more regulation we are hearing now, it's good to be reminded that "the answer is not to add one more vaguely described activity to the long-as-your-arm list of 'no-nos', but to shine an ever brighter light on the books and let the buyer discriminate." Dr. Dreck is currently blogging at TigerHawk's place, of course. Recently: "We have been force fed a super-sized trucker meal of stupid paper-pushing requirements while the basic risks of asset leverage went unaddressed."

Greed, Or Incentives? Richard Epstein on regulation, in Forbes. "Short term heroics are no substitute for dispassionate deregulation, which won’t happen so long as our political leaders are fixated on greed. Taking steps to prevent financial meltdowns is more likely to hasten their unwelcome arrival, so says the libertarian."

A little (more) history: New Agency Proposed to Oversee Freddie Mac and Fannie Mae, NY Times from 2003. "The plan is an acknowledgment by the administration that oversight of Fannie Mae and Freddie Mac -- which together have issued more than $1.5 trillion in outstanding debt -- is broken. A report by outside investigators in July concluded that Freddie Mac manipulated its accounting to mislead investors, and critics have said Fannie Mae does not adequately hedge against rising interest rates."

My favorite mustelid has some things to say, as a small mammal selling in this market. One thing: "Blaming Wall Street operators for the current financial crisis is like discovering a fly-blown corpse and arresting the maggots for murder." Another thing: "Government has just stolen sixty thousand dollars from me. Let’s be clear about this: THE DEMOCRATS STOLE $60,000 FROM ME."

There is a video, "Burning Down the House," for those who would rather not do so much reading. And another video, with enough Barney Frank to make up for the lack of Barney Frank in the first video. Another video, from a 2004 hearing dealing with the Office of Federal Housing Enterprise Oversight; featuring Maxine Waters, Gregory Meeks, Artur Davis, Franklin Raines, and yes, Barney Frank.