Not Fannie!!!! Arghhhhhhhhh….

OK.  Anderson Cooper gets a “brain-dead media” award.  He selected Franklin Raines, former CEO of Fannie Mae as #2 in the Culprits of the Collapse.  Raines has his own problems, and maybe should have made the top ten culprits of something, but what primarily caused the housing bubble was the ability of Wall Street investment banks to securitize and market junk mortgages.

Even Alan Greenspan agrees that Fannie was not a primary mover in this debacle.  As Henry Waxman observed in Thursday’s hearings before his committee, Fannie Mae securitized virtually no subprime paper at the height of the bubble (2.9% in 2006, 13% in 2007).  The subprime parade was organized and led by Wall Street investment banks, and enabled by rating agencies that gave those junk mortgages AAA ratings.  Under competitive pressure Fannie eventually started buying the junk and followed the Wall Street bankers into the collapse.  As for Raines, he left Fannie Mae in December 2005.

It really does a disserve to the public for major media outlets to pass along disinformation like this.  Bad selection, Anderson.  Bad.

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