White House warned about Fannie and Freddie

For many years the President and his Administration have not only warned of the systemic consequences of financial turmoil at a housing government-sponsored enterprise (GSE) but also put forward thoughtful plans to reduce the risk that either Fannie Mae or Freddie Mac would encounter such difficulties.  President Bush publicly called for GSE reform 17 times in 2008 alone before Congress acted.  Unfortunately, these warnings went unheeded, as the President's repeated attempts to reform the supervision of these entities were thwarted by the legislative maneuvering of those who emphatically denied there were problems.  

2001

April: The Administration's FY02 budget declares that the size of Fannie Mae and Freddie Mac is "a potential problem," because "financial trouble of a large GSE could cause strong repercussions in financial markets, affecting Federally insured entities and economic activity."

2002

May: The President calls for the disclosure and corporate governance principles contained in his 10-point plan for corporate responsibility to apply to Fannie Mae and Freddie Mac.  (OMB Prompt Letter to OFHEO, 5/29/02)

2003

January: Freddie Mac announces it has to restate financial results for the previous three years. 

February: The Office of Federal Housing Enterprise Oversight (OFHEO) releases a report explaining that "although investors perceive an implicit Federal guarantee of [GSE] obligations," "the government has provided no explicit legal backing for them."  As a consequence, unexpected problems at a GSE could immediately spread into financial sectors beyond the housing market.  ("Systemic Risk: Fannie Mae, Freddie Mac and the Role of OFHEO," OFHEO Report, 2/4/03) 

September: Fannie Mae discloses SEC investigation and acknowledges OFHEO's review found earnings manipulations.

September: Treasury Secretary John Snow testifies before the House Financial Services Committee to recommend that Congress enact "legislation to create a new Federal agency to regulate and supervise the financial activities of our housing-related government sponsored enterprises" and set prudent and appropriate minimum capital adequacy requirements.

October: Fannie Mae discloses $1.2 billion accounting error.

November:  Council of the Economic Advisers (CEA) Chairman Greg Mankiw explains that any "legislation to reform GSE regulation should empower the new regulator with sufficient strength and credibility to reduce systemic risk."  To reduce the potential for systemic instability, the regulator would have "broad authority to set both risk-based and minimum capital standards" and "receivership powers necessary to wind down the affairs of a troubled GSE."  (N. Gregory Mankiw, Remarks At The Conference Of State Bank Supervisors State Banking Summit And Leadership, 11/6/03)

2004

February: The President's FY05 Budget again highlights the risk posed by the explosive growth of the GSEs and their low levels of required capital, and called for creation of a new, world-class regulator:  "The Administration has determined that the safety and soundness regulators of the housing GSEs lack sufficient power and stature to meet their responsibilities, and therefore…should be replaced with a new strengthened regulator."  (2005 Budget Analytic Perspectives, pg. 83)

February: CEA Chairman Mankiw cautions Congress to "not take [the financial market's] strength for granted."  Again, the call from the Administration was to reduce this risk by "ensuring that the housing GSEs are overseen by an effective regulator."  (N. Gregory Mankiw, Op-Ed, "Keeping Fannie And Freddie's House In Order," Financial Times, 2/24/04)

June: Deputy Secretary of Treasury Samuel Bodman spotlights the risk posed by the GSEs and called for reform, saying "We do not have a world-class system of supervision of the housing government sponsored enterprises (GSEs), even though the importance of the housing financial system that the GSEs serve demands the best in supervision to ensure the long-term vitality of that system.  Therefore, the Administration has called for a new, first class, regulatory supervisor for the three housing GSEs:  Fannie Mae, Freddie Mac, and the Federal Home Loan Banking System."  (Samuel Bodman, House Financial Services Subcommittee on Oversight and Investigations Testimony, 6/16/04)

2005

April: Treasury Secretary John Snow repeats his call for GSE reform, saying "Events that have transpired since I testified before this Committee in 2003 reinforce concerns over the systemic risks posed by the GSEs and further highlight the need for real GSE reform to ensure that our housing finance system remains a strong and vibrant source of funding for expanding homeownership opportunities in America… Half-measures will only exacerbate the risks to our financial system."  (Secretary John W. Snow, "Testimony Before The U.S. House Financial Services Committee," 4/13/05)

2007

July: Two Bear Stearns hedge funds invested in mortgage securities collapse.

August: President Bush emphatically calls on Congress to pass a reform package for Fannie Mae and Freddie Mac, saying "first things first when it comes to those two institutions.  Congress needs to get them reformed, get them streamlined, get them focused, and then I will consider other options."  (President George W. Bush, Press Conference, The White House, 8/9/07)

September: RealtyTrac announces foreclosure filings up 243,000 in August – up 115 percent from the year before. 

September: Single-family existing home sales decreases 7.5 percent from the previous month – the lowest level in nine years.  Median sale price of existing homes fell six percent from the year before.

December: President Bush again warns Congress of the need to pass legislation reforming GSEs, saying "These institutions provide liquidity in the mortgage market that benefits millions of homeowners, and it is vital they operate safely and operate soundly. So I've called on Congress to pass legislation that strengthens independent regulation of the GSEs – and ensures they focus on their important housing mission.  The GSE reform bill passed by the House earlier this year is a good start.  But the Senate has not acted.  And the United States Senate needs to pass this legislation soon."  (President George W. Bush, Discusses Housing, The White House, 12/6/07)

2008

January: Bank of America announces it will buy Countrywide.

January: Citigroup announces mortgage portfolio lost $18.1 billion in value.

February: Assistant Secretary David Nason reiterates the urgency of reforms, says "A new regulatory structure for the housing GSEs is essential if these entities are to continue to perform their public mission successfully."  (David Nason, Testimony On Reforming GSE Regulation, Senate Committee On Banking, Housing And Urban Affairs, 2/7/08)

March: Bear Stearns announces it will sell itself to JPMorgan Chase. 

March: President Bush calls on Congress to take action and "move forward with reforms on Fannie Mae and Freddie Mac. They need to continue to modernize the FHA, as well as allow State housing agencies to issue tax-free bonds to homeowners to refinance their mortgages."  (President George W. Bush, Remarks To The Economic Club Of New York, New York, NY, 3/14/08)

April: President Bush urges Congress to pass the much needed legislation and "modernize Fannie Mae and Freddie Mac. [There are] constructive things Congress can do that will encourage the housing market to correct quickly by … helping people stay in their homes."  (President George W. Bush, Meeting With Cabinet, the White House, 4/14/08)

May: President Bush issues several pleas to Congress to pass legislation reforming Fannie Mae and Freddie Mac before the situation deteriorates further. 

  • "Americans are concerned about making their mortgage payments and keeping their homes. Yet Congress has failed to pass legislation I have repeatedly requested to modernize the Federal Housing Administration that will help more families stay in their homes, reform Fannie Mae and Freddie Mac to ensure they focus on their housing mission, and allow State housing agencies to issue tax-free bonds to refinance sub-prime loans."   (President George W. Bush, Radio Address, 5/3/08)
  • "[T]he government ought to be helping creditworthy people stay in their homes. And one way we can do that – and Congress is making progress on this – is the reform of Fannie Mae and Freddie Mac. That reform will come with a strong, independent regulator."  (President George W. Bush, Meeting With The Secretary Of The Treasury, the White House, 5/19/08)
  • Congress needs to pass legislation to modernize the Federal Housing Administration, reform Fannie Mae and Freddie Mac to ensure they focus on their housing mission, and allow State housing agencies to issue tax-free bonds to refinance subprime loans."  (President George W. Bush, Radio Address, 5/31/08)

June: As foreclosure rates continued to rise in the first quarter, the President once again asks Congress to take the necessary measures to address this challenge, saying "we need to pass legislation to reform Fannie Mae and Freddie Mac."  (President George W. Bush, Remarks At Swearing In Ceremony For Secretary Of Housing And Urban Development, Washington, D.C., 6/6/08)

July: Congress heeds the President's call for action and passes reform of Fannie Mae and Freddie Mac as it becomes clear that the institutions are failing.

(White House Press Release)

TRUMP: The twilight hour of socialism has arrived

Joe Raedle/Getty Images

The other day, at Florida International University in Miami, facing large American and Venezuelan flags, President Trump gave a rousing speech in Miami, including this line, the "twilight hour of socialism has arrived."

Trump went on to say:

Socialism is about one thing only—power for the ruling class. They want the power to decide who wins and who loses, who's up and who's down…and even who lives and who dies.

He then repeated a phrase that helped define his State of the Union address this year:

America will never be a socialist country.

Fittingly, Fox News posted an article yesterday exposing the overlooked evils of Che dangers of socialism that all too often disappear behind a flashy design on a t-shirt.

  1. Guevara said he killed people without regard to guilt or innocence. In an interview, Guevara said, "in times of excessive tension we cannot proceed weakly. At the Sierra Maestra, we executed many people by firing squad without knowing if they were fully guilty. At times, the Revolution cannot stop to conduct much investigation; it has the obligation to triumph."
  2. Humberto Fontova, author of "Exposing the Real Che Guevara," told Fox that Guevara created system that put gay people in labor camps. "The regime that Che Guevara co-founded is the only one in modern history in the Western Hemisphere to have herded gays into forced labor camps."
  3. Guevara opposed a free press: "In 1959, leftist journalist José Pardo Llada reported that Guevara told him: 'We must eliminate all newspapers; we cannot make a revolution with free press. Newspapers are instruments of the oligarchy.'"
  4. Guevara made racist statements: Guevara went on to write: "the black is indolent and a dreamer; spending his meager wage on frivolity or drink; the European has a tradition of work and saving."

These are just some of the many historical examples of the failure of socialism. President Trump is right. If the frivolities of Alexandria Ocasio-Cortez and Bernie Saunders catch on and spread, we could have an unbelievable problem on our hands.

Poor Jussie: His narrative is falling apart completely

Tasia Wells/Getty Images for Espolòn

Here's how the media works now: Find a story that confirms their narrative, run it constantly and relentlessly. When the real story comes out, minimize exposure of the correction. Repeat.

We're seeing this pattern play out over and over again.

RELATED: John Ziegler isn't buying what Jussie Smollett's selling either

Here are some of the knee-jerk reactions that the media had to this Jessie Smollett hoax, from Insider Edition, CNN, E! News, Headline News, CNBC, TMZ, to name a few:


Montage: Watch the Media Uncritically Accept Another Outlandish 'Hate Crime' youtu.be


And those are just the reactions on TV. It was just as bad, at times worse, in print and online. I'll give you one special example, however. Because, you know the situation is bad when TMZ is connecting the dots and seeing through this guy's story:

The sources say there were red flags from the get go. Cops were extremely suspicious when Jussie took them out to the area where he said he was attacked and pointed to an obscure camera saying how happy he was that the attack was on video. Turns out the camera was pointing in the wrong direction. Cops thought it was weird he knew the location of that camera. And there's this. We're told investigators didn't believe the 2 alleged attackers screamed 'This is MAGA country' because 'Not a single Trump supporter watches 'Empire.''

Here's the man himself, in an interview just days after the alleged beating…I'm sorry, the alleged "modern day lynching." Here he is in an interview with ABC News, complaining about people making up stuff:



Strong words, spoken by a man who, allegedly, created the whole narrative to begin with.

This compromise is an abomination

Zach Gibson/Getty Images

Three decades ago, "The Art of the Deal" made Donald Trump a household name. A lot has happened since then. But you can trace many of Trump's actions back to that book.

Art of the Deal:

In the end, you're measured not by how much you undertake but by what you finally accomplish.

People laughed when he announced that he was running for President. And I mean that literally. Remember the 2011 White House Correspondents' Dinner when Obama roasted Trump, viciously, mocking the very idea that Trump could ever be President. Now, he's President.

You can't con people, at least not for long. You can create excitement, you can do wonderful promotion and get all kinds of press, and you can throw in a little hyperbole. But if you don't deliver the goods, people will eventually catch on.

This empire-building is a mark of Trump.

RELATED: 'Arrogant fool' Jim Acosta exposed MSM's dishonest border agenda — again.

The most recent example is the border wall. Yesterday, congress reached a compromise on funding for the border wall. Weeks of tense back-and-forth built up to that moment. At times, it seemed like neither side would budge. Trump stuck to his guns, the government shut down, Trump refused to budge, then, miraculously, the lights came back on again. The result was a compromise. Or at least that's how it appeared.

But really, Trump got what he wanted -- exactly what he wanted. He used the techniques he wrote about in The Art of the Deal:

My style of deal-making is quite simple and straightforward. I aim very high, and then I just keep pushing and pushing and pushing to get what I'm after.

From the start, he demanded $5.7 billion for construction of a border wall. It was a months' long tug-of-war that eventually resulted in yesterday's legislation, which would dedicate $1.4 billion. It would appear that that was what he was after all along. Moments before the vote, he did some last-minute pushing. A national emergency declaration, and suddenly the number is $8 billion.

Art of the Deal:

People think I'm a gambler. I've never gambled in my life. To me, a gambler is someone who plays slot machines. I prefer to own slot machines. It's a very good business being the house.

In a rare show of bipartisanship, Senate passed the legislation 83-16, and the House followed with 300-128. Today, Trump will sign the bill.

It's not even fair to call that a deal, really. A deal is what happens when you go to a car dealership, fully ready to buy a car, and the salesman says the right things. What Trump did is more like a car dealer selling an entire row of cars to someone who doesn't even have a licence. When Trump started, Democrats wouldn't even consider a wall, let alone pay for it.

Art of the Deal:

The final key to the way I promote is bravado. I play to people's fantasies. People may not always think big themselves, but they can still get very excited by those who do. That's why a little hyperbole never hurts. People want to believe that something is the biggest and the greatest and the most spectacular. I call it truthful hyperbole. It's an innocent form of exaggeration—and a very effective form of promotion.

He started the wall on a chant, "Build the wall!" until he got what he wanted. He maneuvered like Don Draper, selling people something that they didn't even know they wanted, and convincing them that it is exactly what they've always needed.