Round up the usual denialists

Alan Greenspan is back with another book, and the DeLongian denizens are threatened;

THINKING ABOUT ALAN GREENSPAN: SYSTEM RISK, REGULATION, AND "FRAUD" IN "THE MAP AND THE TERRITORY"

and

MENTIONS OF "SOCIALISM" IN ALAN GREENSPAN'S "THE MAP AND THE TERRITORY"

 and

MATTHEW YGLESIAS: ALAN GREENSPAN BANK CAPITAL: A FRAUD:  NOTED

and

THE WORD "BUSH" DOES NOT APPEAR TO APPEAR AT ALL IN ALAN GREENSPAN'S "THE MAP AND THE TERRITORY"

 and

THE WORD "CLINTON" APPEARS TWICE IN ALAN GREENSPAN'S "THE MAP AND THE TERRITORY"

and

ALAN GREENSPAN: "FRAUD" IN "THE MAP AND THE TERRITORY"

and

BILL CLINTON RENOMINATED YOU TWICE, MR. GREENSPAN...

and

I DON'T KNOW WHAT MAP ALAN GREENSPAN HAS, OR WHAT TERRITORY HE IS TRYING TO COVER, BUT HE SEEMS TO ME TO BE LOST...

Let us help you, Professor. Your acolytes worry that Greenspan might cover some uncomfortable territory;

2 Jeffrey Davis said...

     So, it was all Fannie and Freddie's fault and the predatory lenders to unworthy borrowers played no part? ....

 4 Paul Bowman said...

     .... This was "market forces" at work, not the GSE's.

7 hw said...
     Mortgages financed by Wall Street from 2001 to 2008 were 4½ times more likely to be seriously delinquent than mortgages backed by Fannie and Freddie. 

12 Bloix said...

     What hw said. Blaming the GSE's is a standard right-wing dodge to exonerate Wall Street and place the blame for the crisis on Big Government.

21 jep said...

     The premise of this analysis, that GSEs dominated the subprime market is almost surely misplaced....they may have marginally moved some clearing prices...they were simply not that big a player compared to that market as a whole.

Plenty more of similar sentiment too. But let's see what the professionals themselves thought. Fannie Mae CEO Franklin Raines, in the Washington Times, December 10, 1999;

Fannie Mae brings private capital, management and efficiency to the task of expanding affordable homeownership in America. At the center of the housing finance system, Fannie Mae is a major force in the expansion of minority homeownership.

Since Fannie Mae doesn’t make home loans ourselves, we back mortgage lenders by buying or securing loans they make in the primary market; the company does not serve minority borrowers directly. Nevertheless, Fannie Mae outperforms the overall market when it comes to financing minority lending, according to data provided to the U.S. Department of Housing and Urban Development (HUD), and Federal Reserve data gathered under the Home Mortgage Disclosure Act. Last year, Fannie Mae financed $46 billion in home loans for more than 450,000 minority families, 77 percent more than the previous year.

By far, Fannie Mae is the largest single source of funds for minority homebuyers in the nation. Notably, Fannie Mae finances more minority homeowners than the federal government does through the FHA.

It ain't braggin' if you can do it. 

...we will devote 50 percent of our business to low- and moderate-income homebuyers.

However, Fannie Mae’s commitment to underserved families goes well beyond the HUD mandate [that HUD Sec'y, and Fannie's boss,  Andrew Cuomo had just announced]. Five years ago, Fannie Mae launched our Trillion Dollar Commitment, a pledge to invest $1 trillion to help 10 million underserved families become homeowners or obtain decent rental housing by 2001.

Bold by HSIB.

We can almost sympathize with the task of Housing Cause Denial--Sisyphus didn't have it so tough.

Almost.

It goes with The Map and the Territory

As noted earlier, Berkeley's J. Bradford DeLong and acolytes were made uncomfortable by the publication of Alan Greenspan's latest book. We can see why this might discombobulate the Housing Cause Denialists (p.67);

The true size of the American subprime problem was hidden for years by the defective bookkeeping of the GSEs. Fannie Mae was unable to get its books certified and had to stop reporting publicly between November 2004 and December 2006, pending an often delayed clarification of their accounts. Freddie Mac had had similar problems earlier. Not until the summer of 2007 did the full magnitude of the subprime problem begin to become apparent. Fannie's third-quarter write-offs almost quadrupled relative to the second quarter. Moreover, the source of loss did not become fully evident until September 2009, when Fannie Mae very belatedly disclosed significant reclassification of loans, from prime to subprime, dating back to loans that it had made and held in 2003 and 2004. More important, those revelations helped to explain how what was thought to be a relatively sound portfolio of prime conventional mortgages in mid-2007 could generate the huge losses Fannie and Freddie had been reporting.

Which is what Ed Pinto, Peter Wallison, Charles Calomiris and others were saying. And was being denied by the likes of Paul Krugman and the denizens of Prof. DeLong's Semi Daily Journal virtually every the subject of the housing bubble arose.

Greenspan also notes that the Basel II international banking regulations reduced bank capital requirements, thus causing leverage to balloon. Something that the AEI's Peter Wallison predicted would happen (and the usual suspects denied vociferously).

Zinc about it

Just zinc about it, so it enjoyed a century of libertarian bliss in the heart of Europe;

After Waterloo, where British, Dutch and German troops ended Napoleon's comeback on June 18, 1815, negotiations in Vienna to redraw the map of Europe failed to agree who would control the Altenberg mine following the end of French rule over the region.

A rare source of zinc vital for the brass then essential to the arms industry, neither the Prussian king nor the Dutch, whose territory then included modern Belgium, would give ground, but neither they nor their allies had the stomach for a new war.

In June 1816, they agreed to establish Neutral Moresnet, about the size of Monaco today, and to accord its citizens low taxes and freedom from government; a contemporary observer wrote they were "at liberty to do as they please".

And pleased they were, even when the zinc became passe. Then they mined other things;

An entrepreneurial spirit marked the community, as witnessed by an inventive response when the mine, the territory's sole raison d'etre, ceased being economically viable in 1885. Local doctor Wilhelm Molly's solution was to make Neutral Moresnet the home of Esperanto, the then newly invented "world language".

Renaming it Amikejo - place of friendship in Esperanto - he promoted international congresses for the language and encouraged its use among the 4,000 German-, Dutch- and French-speaking inhabitants.

That only worked until WWI broke out and ended the era of low taxes and limited governmental interference in the lives of the citizens.

Bebe, esta frio afuera

Consider it Bolivia's contribution to anti-price-gouging;

Bolivian President Evo Morales sacked Defense Minister Jorge Ledezma on Tuesday over a controversial sweater he wore on a humanitarian visit to the Chilean region of Copiapó, which was recently ravaged by heavy rains and flooding.

When Ledezma arrived in Chile on Thursday, March 26, to deliver 13,000 liters of bottled water for the victims of the disaster, his pullover bore a logo stating “The sea belongs to Bolivia,” with a map of the country including the territory administered by Chile that Bolivia claims as its own.

Not diplomatic, Jorge. Though this was a nice touch;

Ledezma, former ambassador to Peru, told CNN Chile that he had no intention to provoke Chilean sensibilities.

“It was a bit cold and I had to put on the vest. It was the only thing I had,” he said.