The whitewashing of Fannie and Freddie has begun in earnest as one of the chief foxes of the hen house, Henry Waxman and his House Committee on Oversight and Government Reform met Tuesday to examine “The Role of Fannie Mae and Freddie Mac in the Financial Crisis”. As one could imagine, though, from the testimony provided by ex-Fannie CEO Franklin Raines and documents held, though unreleased by Waxman but seen by the Wall Street Journal, it was a surreal exercise in suspension of belief.
If one were to believe Waxman and Raines then all they were really guilty of was getting blind-sided by the excesses of the run-away free market.
"But previously undisclosed internal documents that are now in Mr. Waxman's
possession and that we've seen tell a different story.
companies understood the risks they were running. But squeezed between the need
to meet affordable-housing goals set by HUD and the desire to sustain their
growth and profits, they took the leap anyway. As a result, by the middle of
this year, the two companies were responsible for some $1.6 trillion worth of
subprime credit of one form or another. "
Incredibly, both Waxman and Raines claimed they were just following the market rather than leading it. As if, casting aside the warnings of Fannie’s own head of risk management by adopting previously banned “dangerous” lending practices becomes a sin only as a matter of timing. At this point, do you hear your parents ringing in your sub-conscience, “If you’re friends all jumped off a cliff…..?).
And in another stupefying turn of events, Raines claims that Fan and Fred’s regulators did nothing to stop them while conveniently forgetting about that $11.7 million they spent in ’06 alone to keep regulators off their back and being conveniently forgetful of the hearings back late in ’04 where federal regulator, Armando Falcon was lambasted and told to get lost for wanting to upset the apple cart by the likes of Barney “Brothel” Frank, Chris “Countrywide” Dodd and Maxine “Housing Goals” Waters.
These interweb tubes really are fantastic for these archival “Oh, really?” moments. Its going to keep going like this… the lies, the whitewashing, and the CYAs so be prepared for more of this breathtakingly galling behavior from your elected officials.