Obama to Unveil Proposal on Bank Taxes - WSJ.com
There were some in Congress that tried to rein in Fannie and Freddie but the Democrats would have nothing to do with it.
Now they are upping the bet by having Fannie, Freddie and the Fed basically (along with FHA) support almost the entire housing industry.
Does this at all seem like the idea back in the 70's and 80's when the savings and loans were getting hit because Regulation R was removed and they had to start paying higher interest rates on deposits to keep their funds in the inflationary 70's. Money markets funds had been created?
I recall the banks being given the green light to invest in real estate - in the hope that government wouldn't have to bail out the banks (I think the then cost would have been 30 billion). So instead, Congress hoped that these inexperienced bankers could recoup their funds by 'gambling' on real estate investment (after all, inflation was still there and prices were rising).
As we all recall, the bet went bad and we had the Savings and Loan Crisis of the 1980's.
Could this happen again? Or, do big wagers sometimes pay off? Hmmmm........
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