Monday, January 4, 2016

The big short! And the big lie.

In June 2008, just before the crisis, more than half of all U.S. mortgages — 31 million loans — were subprime or otherwise risky. Of these, 76 percent were on the books of government agencies, primarily the government-sponsored enterprises (GSEs) Fannie Mae and Freddie Mac. This shows, without question, that the government — a sophisticated buyer — created the demand for these deficient loans.
UM… NO! Ill write it properly..
In June 2008, just before the crisis, more than half of all U.S. mortgages — 31 million loans — were subprime or otherwise risky. Of these, 76 percent were on the books of Banks and sold as Private MBS to Fannie as Senior securities(aka risk sharing by PMBS market), primarily the government-sponsored enterprises (GSEs) Fannie Mae and Freddie Mac. This shows, without question, that the government — a sophisticated buyer — that there was supply by banks being sold for these deficient loans and Fraudulently represented as AAA securities.
Senior tranches of PMBS were just like risk sharing in 2015 by fannie, 80% is guaranteed 20% is you go bust but may make more money if the loans are good in interest payments. Fannie only bought the Senior guaranteed 80% of PMBS. So when Hank Paulson says Fannie bought subprime, this is what he was referring to. It is a lie that they bought the crap knowing it was crap. It is the seller (banks) that lied about the wholesomeness of the AAA rated securities! The law suits by the FHFA against the banks prove this as FACT!
There its truthful and factual now.

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