Thread: When Watchdogs Snore
#1 When Watchdogs Snore09-26-2008, 09:59 AM
Well, don't this turn our libs arguements on thier ears!
No media bias here
When Watchdogs Snore: How ABC, CBS and NBC Ignored Fannie & Freddie
By Rich Noyes (Bio | Archive)
September 25, 2008 - 17:05 ET
The two mortgage giants Freddie Mac and Fannie Mae — seized by the government September 7 before they went completely bankrupt, at a potential cost to taxpayers of more than $25 billion — have been in obvious trouble for much of the past five years — with criminal investigations, accounting scandals, firings, resignations, huge losses and warnings from the Federal Reserve that their huge portfolio of mortgage securities posed a risk to the overall financial system.
But prior to this year, the watchdogs at ABC, CBS and NBC found time for only 10 stories on the financial health and management of Fannie Mae and Freddie Mac. A review of the three networks’ morning and evening news programs from January 1, 2003 through December 31, 2007 found nine anchor-read items or brief references to the companies troubles, plus one in-depth report by CBS’s Anthony Mason on the May 23, 2006 Evening News, after Fannie Mae was fined $400 million for accounting fraud.
How did we get here? Let's review: In order to curry congressional support after their accounting scandals in 2003 and 2004, Fannie Mae and Freddie Mac committed to increased financing of "affordable housing." They became the largest buyers of subprime and Alt-A mortgages between 2004 and 2007, with total GSE exposure eventually exceeding $1 trillion. In doing so, they stimulated the growth of the subpar mortgage market and substantially magnified the costs of its collapse....
In 2005, the Senate Banking Committee, then under Republican control, adopted a strong reform bill, introduced by Republican Sens. Elizabeth Dole, John Sununu and Chuck Hagel, and supported by then chairman Richard Shelby. The bill prohibited the GSEs from holding portfolios, and gave their regulator prudential authority (such as setting capital requirements) roughly equivalent to a bank regulator. In light of the current financial crisis, this bill was probably the most important piece of financial regulation before Congress in 2005 and 2006. All the Republicans on the Committee supported the bill, and all the Democrats voted against it. Mr. McCain endorsed the legislation in a speech on the Senate floor. Mr. Obama, like all other Democrats, remained silent.
Now the Democrats are blaming the financial crisis on "deregulation." This is a canard. There has indeed been deregulation in our economy -- in long-distance telephone rates, airline fares, securities brokerage and trucking, to name just a few -- and this has produced much innovation and lower consumer prices....
If the Democrats had let the 2005 legislation come to a vote, the huge growth in the subprime and Alt-A loan portfolios of Fannie and Freddie could not have occurred, and the scale of the financial meltdown would have been substantially less. The same politicians who today decry the lack of intervention to stop excess risk taking in 2005-2006 were the ones who blocked the only legislative effort that could have stopped it.
Here’s some of what the networks reported/ignored as the problems
: “It's all shits and giggles until someone giggles and shits.”
” I wondered why the rock was getting larger. Then it hit me.
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