While everyone was talking about Sarah Palin, the U.S. taxpayers just took on TRILLIONS of dollars of risk in the Fed's takeover of Freddie Mac and Fannie May. What took so long? Apparently, Freddie and Fannie didn't have to show anyone their books. That is, until the Democrats passed the 2008 Housing Bill, the bill Bush threatened to veto.
Todays USA todayreports on the Fed's takeover of Freddie and Fannie. The money quote in the article:
A closer look
The move to put Freddie and Fannie into conservatorship was triggered in part by closer government scrutiny of the agencies, prompted by the July housing legislation.
The Treasury Department recently signed a contract with Morgan Stanley to investigate the financial position of Fannie and Freddie, with help from the FHFA.
"Based on what we have learned about these institutions over the past four weeks, including what we learned about their capital requirements, and given the financial markets today, I concluded that it would not have been in the best interest of the taxpayers for the Treasury to simply make an equity investment in these enterprises in their current form," Paulson says.
It was the Democrat's legislation that initiated the closer scrutiny by the Fed. (You can also read this as it was the Republican's prior legislation that prevented scrutiny by the Fed.) The law was passed by the Senate on July 28th with a veto-proof margin, after Bush caved on his veto threat.
Just how bad is it? In just 4 weeks after the law was signed: 1.)the government was able to retain an auditor-type firm (Morgan Stanley)who: 2.)was able to glance at the holding of a MULTI-Trillion Dollars worth of holdings and: 3.) go "Holy Shit" and 4.) work with the Fed to develop the largest takeover of a private company in the history of the planet!
Just 4 weeks.
That's how obvious this big steaming pile is. And that's what the Republicans didn't want anyone to see, because, you know, they were just going to wish it away.
And if you are wondering how John McCain voted, he didn't bother to show up.