[pimbertiemoft]

Is seems that the US Office of Government Ethics (which has to be the smallest agency in the Federal Government) holds a much different view:



Of course, our rulers in DC conveniently exempt themselves from many Federal laws for just such an occasion.

But it certainly is, IMHO, an ethical violation for someone who oversees a Federal agency or contractor to be involved in that agency or contractor's decision to hire a spouse or domestic partner.

Matt

In fairness, if the government is unwilling to recognize same-sex marriage then they probably shouldn't concern themselves with same-sex references. I don't think there's any impropriety here though. It's not as though Franks got him the job; he was called as a reference. You can't expect him to pretend he doesn't know the guy simply because he's a blood sucking politician. Of course if a politician ever gave me a recommendation on an applicant I would toss their resume in the garbage.

[abishiots]

Fannie Mae was NOT the root cause. Banking deregs made this crash possible. So, the true fault lies with loosening up bank regulations, in order to increase profitability of those institutions, by allowing them to create these exotic tools of generating profits.

Of course I agree with you on all this. Also like the way you said this, short & sweet, succinct & reality-based.

... Now in regards to Franks, he is the last person who should hold that position IMO. I don't like him. And many of the things that allowed for the last crash have not been fixed. Thanks to both parties.

Re: Barney Franks (re: Dodd-Frank Act & financial reforms in general)

Focusing on (20 year old) non-issues succeeds in avoiding the issues. There are some who like things just the way they are & don't want anything to upset the status quo or get in the way of doing 'business as usual.' These (mostly the same) people do not want any financial reforms. It's like a bait & switch marketing strategy. It certainly isn't as if they have something different to offer up. Let's face it, we will be seeing more of the same types of financial debacles, imbroglios (or whatever you wanna call'm) in our lifetime (no matter how old you are), we just can't say precisely when.

[incimisiche]

If Fannie Mae hadn't been a willing buyer of all those bad mortgages, there would be no financial crisis. While that doesn't make them a root cause, it does make them instrumental in the meltdown.

[abishiots]

If Fannie Mae hadn't been a willing buyer of all those bad mortgages, there would be no financial crisis. While that doesn't make them a root cause, it does make them instrumental in the meltdown.

& if the FIRE sector didn't gravitate toward unregulated financial 'products' in their effort to maintain their ever-increasing earnings levels?

Bitw they are still doing so. Bitw they (including the American people) are still fighting any type of financial reform. One would think people would be more proactive in preventing another financial crisis & its eventual scope reaching to the level of global crisis? (oh that's right, other Countries are doing so, it's just here in the good ole USA that we find the resistance to common sense solutions.)

The mortgage crisis from late 2007
Following their mission to meet federal Housing and Urban Development (HUD) housing goals, GSEs such as Fannie Mae, Freddie Mac and the Federal Home Loan Banks (FHLBanks) have strived to improve home ownership of low and middle income families, underserved areas, and generally through special affordable methods such as "the ability to obtain a 30-year fixed-rate mortgage with a low down payment... and the continuous availability of mortgage credit under a wide range of economic conditions." (HUD 2002 Annual Housing Activities Report) Then in 2003-2004 , the subprime mortgage crisis began.[33] The market shifted away from regulated GSEs and radically toward Mortgage Backed Securities (MBS) issued by unregulated private-label securitization conduits, typically operated by investment banks. The shift occurred as financial institutions sought to maintain earnings levels that had been elevated during 2001-2003 by an unprecedented refinancing boom due to historically low interest rates. ... Fannie Mae - Wikipedia, the free encyclopedia

More info:

Explaining the Housing Bubble by Adam Levitin, Susan Wachter :: SSRN
Abstract:
There is little consensus as to the cause of the housing bubble that precipitated the financial crisis of 2008. Numerous explanations exist: misguided monetary policy; government policies encouraging affordable homeownership; irrational consumer expectations of rising housing prices; inelastic housing supply. None of these explanations, however, is capable of fully explaining the housing bubble, much less the parallel commercial real estate bubble.

This Article posits a new explanation for the housing bubble. It demonstrates that the bubble was a supply-side phenomenon, attributable to an excess of mispriced mortgage finance: mortgage finance spreads declined and volume increased, even as risk increased, a confluence attributable only to an oversupply of mortgage finance.

The mortgage finance supply glut occurred because markets failed to price risk correctly due to the complexity and heterogeneity of the private-label mortgage-backed securities (MBS) that began to dominate the market in 2004. The rise of private-label MBS exacerbated informational asymmetries between the financial institutions that intermediate mortgage finance and MBS investors. The result was overinvestment in MBS that boosted the financial intermediaries’ profits and enabled borrowers to bid up housing prices.

Despite mortgage securitization’s inherent informational asymmetries, it is critical for the continued availability of the long-term fixed-rate mortgage, which has been the bedrock of American homeownership since the Depression. The benefits of securitization, therefore, must be reconciled with the need for economic stability. The Article proposes the standardization of MBS to reduce complexity and heterogeneity in order to rebuild a sustainable, stable housing finance market based around the long-term fixed-rate mortgage.

[Opening-auto]

& if the FIRE sector didn't gravitate toward unregulated financial 'products' in their effort to maintain their ever-increasing earnings levels?

Bitw they are still doing so. Bitw they (including the American people) are still fighting any type of financial reform. One would think people would be more proactive in preventing another financial crisis & its eventual scope reaching to the level of global crisis? (oh that's right, other Countries are doing so, it's just here in the good ole USA that we find the resistance to common sense solutions.)



Fannie Mae - Wikipedia, the free encyclopedia

More info:

Explaining the Housing Bubble by Adam Levitin, Susan Wachter :: SSRN

It's all a matter of relativity.

[abishiots]

It's all a matter of relativity.

Do you mean this financial crisis is relative to the Great Depression?

Or, is this one relative to the Savings & Loan Crisis of the 1980's?

Or, is this one relative to the next one?

Or, am I taking a rhetorical answer too seriously?

Anyway, here's a nifty side by side comparison applicable to the second (this one to S&L):

Two Financial Crises Compared: The Savings and Loan Debacle and the Mortgage Mess - Graphic - NYTimes.com