but in terms of the future of fannie and freddie, what to do with fannie and freddie, i wanted to pose the question to the either john or lisa, and then we'll open it up to questions or comments from people in the audience, what should president obama do if you were writing this new report for him, what is the most important thing your organization thinks he should be saying in that report, or what is the most important thing that you've learned today that should go into that report? either one of you. >> well, if you would allow me, i'd like to back up a little bit, and i think that the various presenters touched on this theme throughout the course of their presentations, but i think one of the first things that we, that need to be discussed is what is the purpose of the sms? what public purpose do we want them to serve, and do we, indeed, want them to serve a public purpose? if their public purpose is to buttress the mortgage market and make housing more affordable and more accessible, then it just sort of seems to me that the fms cannot be a private entity. so i think one of the fir

they were selling most of their loans to fannie. they were fannie's principle supplier.hat is why countrywide was doing so will end frank rains-- raines had to go in hand to make sure that angelo would continue to sell him the sub-prime loans. >> it is pretty much reported widely about angela missy low a private sector person using his influence at countrywide to say to fannie and freddie, look, one of you are going to do this and buy my bonds or i'm not going to do business with you. it is again still a private sector deriving this which gets back to my original question of can we create the regulatory apparatus that insurers these malfeasance practices are not allowed to blossom again? feed you ask an interesting question when you say can we creedon apparatus? i think it is fairly conclusive the least to me that the that they bought more than wall street and have no more than wall street created, who was really driving this market but let's leave that aside and you and i will debate this at every meeting we have. but on the question of whether regulation can prevent th

fannie mae and freddie mac could fund the mortgage is in a prudent manner.could build a housing trust fund into their business so they would take a certain percentage of their income, put it into a pool, and use that to subsidize a in a controlled way. you do not have this open-ended exposure of a government guarantee. could subsidize low-income housing. you could provide essential consumer protections for or worse. i do know know what will happen with the little consumer agency but it will be poised between an industry that is trying to kill it and banking committees that have traditionally been fairly receptive to that industry. those consumer protections, if administered by fannie mae and freddie mac as government corporations, could involve changing ways of doing business, the same way in the early '70s the standardized mortgage forms. they could provide more effective borer counseling. they could provide increased foreclosures mitigation circumstances among other consumer protections. finally, a lot has been talked about with fha and it is stumbling, th

they were selling most of their loans to fannie. they were fannie's principle supplier.as doing so well. it had to go and in hand to mange make sure anglo mazillo would continue to sell him these subprime lows. >> you reported widely about him using his influence at countrywide to say to fannie and freddie, look, eert you're going to buy my loans or i'm going to go to wall street. it is the private sector. can we create the kind of regulatory apparatus that ensures these practices are not allowed? >> i think you ask an interesting question when you say can we create a regulatory apparatus? i think it is clear, at least to me, that the fact they bought more than wall street and more than wall street created, who was really driving this market. let's leave that aside. you and i will debate this every meeting we have. on the question whether regulation can prevent this, i think the answer to that is no. and we see that -- i think one of our problems in general in public policy is we have an excessive faith in regulation. the banks in the united states with the most heavily

the fannie and freddie should not be there.i'm disappointed in my friends on the other side of the aisle when they were in control of the congress they did not do more to regulate fannie and freddie. we missed a golden opportunity that would have avoided a lot of the problems we are facing now if we had not had such a firm of ideological position at the white house and the treasury and the fed. i hope we can come together, republicans and democrats, to explore good policies this year. i've always felt the financial firms receiving taxpayer assistance should receive the most scrutiny with respect to their executive compensation practices. one example involves a large celery for a lot -- a large salaries for fannie and freddie executives. i joined chairman frank and others to vote to stop the unfair tarp pay practices unfair recipients. -- unfair pay practices of tarp recipients. finally, for firms to have repaid tarp, i do not think the government should go in and set levels. the government does have a role in looking at the st

the fannie and freddie should not be there.i'm disappointed in my friends on the other side of the aisle when they were in control of the congress they did not do more to regulate fannie and freddie. we missed a golden opportunity that would have avoided a lot of the problems we are facing now if we had not had such a firm of ideological position at the white house and the treasury and the fed. i hope we can come together, republicans and democrats, to explore good policies this year. i've always felt the financial firms receiving taxpayer assistance should receive the most scrutiny with respect to their executive compensation practices. one example involves a large celery for a lot -- a large salaries for fannie and freddie executives. i joined chairman frank and others to vote to stop the unfair tarp pay practices unfair recipients. -- unfair pay practices of tarp recipients. finally, for firms to have repaid tarp, i do not think the government should go in and set levels. the government does have a role in looking at the st

and freddie, that we have not tried to deal with fannie and freddie.i want to try to clear it up. as a supporter told me, it does not matter. people hear over and over again that president obama started the bailouts. where i want to go now is that too big to fail is a problem. they understand that they have what it takes to take what we have. if that is the attitude that they have, we are going to lose. my questions are, and i do not bill -- and i do not know the answer, did the firms with better compensation performed better? those with better compensation structures, did they end up performing better? do any of you know that answer? >> this is a subject that needs to be investigated. it is not a straightforward question to answer. what does it mean to be compensated better? if you believe that better compensation is one that provides less incentive to focus on short-term, then, you have to measure those dimensions and define how they have looked at the performance. that has not been fully done. >> did you not think that would be a worthy project? >>

fannie and freddie were too big to fail. does as a whole other area that goes along with inappropriate government distortion. thanks, ray. >> janet norman. how do you see citibank's future? >> i thank. >> i used to work at citibank. citibank's future -- they cannot succeed without market discipline. and right now they operate without market discipline. and just as importantly, they are distorting what other firms do, because they have got to compete against it actively a government-subsidized bank. so again, this is a place just like aig where you've got great business lines, great people at some places, but you've got to unlock these people and put them in the hands of managers who know how to manage the company. and you've got to do that at the expense of bondholders, who freely lend money to the company, and should take a loss when their prospects turn out to be not with the lenders have thought. there's no justification for not having bondholders to the financial system take losses. then you're just back to the problem o

and they sold them all to fannie mae. if fannie mae had not been there to buy these loans, these irresponsible loans would not have been made in the first place. but to make matters worse, fannie mae and freddie mac bundled these subprime mortgages up into packages we call securities and sold them, sold them to banks as assets, sold them all over the world. these are the toxic assets that brought down our financial institutions once the housing bubble burst. so, folks, for the president, for ben bernanke, for secretary geithner to come in and indict the free market system and the greed of corporations and banks misses the whole point of what caused this problem. certainly these two causes created perverse incentives for the markets, the banks to practice irresponsible behavior. there's no question that went on. but to say that that was the cause of where we are today misses the whole point. my problem with ben bernanke and the president and geithner -- or secretary geithner, excuse me, is not that they made mistakes becau

>> oh, we are going to have to bring very substantial reforms to fannie and freddie, absolutely, and we are completely committed to that and we are committed to propose a detailed set of forms beginning this year. i don't think we're going to be able to legislate that-- that process can start until next year. it's a complicated thing to get right. we are completely supportive and agree completely with the need to make sure we take a cold, hard look at what the future of those institutions should be in our country. >> woodruff: treasury secretariry tim, thank you very much. >> nice to see you. >> woodruff: for another view we turn to scat garrett from new jersey, a leading republican on the house financial services committee. he's helped draft membership of his party's alternative recommendations for reform. thank you for being with us. tell us, overall, your take on the president's proposals today. >> i wanted to say that was a fascinating interview. i appreciated some of the questions that you posited and the lack of answers on the other side of it. and one other comment-- i was thi

>> oh, we are going to have bring very sstantial reforms to fannie and freddie, absolutely, and were completely comtted to that and we are cmitted to propose a detailed set of formbeginning thisear. i don't thinwe're going to be le to legislate that-- that process can art until next ye. it's a complicat thing to get rit. we are cometely supportive and agree completely witthe need to make sure we ke a cold, hardook at what the future of those institutionshould be in our untry. >> wdruff: treasury secretariry tim, thankou very much. >> nicto see you. >> woodruff: for anotheriew we turn to scat garrt from new jersey, a leading reblican on the house fincial serves committee. he's helped draft membship of his party's alternativ recommendations r reform. thanyou for being with us. tell u overall, your take on the presidt's proposals today. >> i wanted to sayhat was a fainating interview. i appreciated so of the questions thatou posited and the lack of answers onhe other side oit. and one other coent-- i was thinking, your lead-in to e story talked about theact that thstock market tanked to

. >> there were several questions about barney frank's remarks about doing away with fannie and freddie. the questions are related to what kind of an effect this has on your organization, and if you were to advise mr. frank about restructuring, what would you tell him? >> i am a real barney frank van. i feel like i know him reasonably well. recall that i spent a lot of years in boston and ran a financial services company. he chairs the financial-services committee. i had the chance to visit with him in the past. i have gotten to know his staff quite well. i am a real admirer of congressman frank. he is incredibly bright. he is committed. he is a true public servant. he really cares. i admire him greatly. secondly, in my speech, i talked about the fact that freddie mac is not a decision maker. we don't even get to lobby or advocate. that is precluded in our current state. not a decision maker. i totally get that the house financial-services committee chaired by congressman frank is a decision maker. a very important decision maker that will be heavily involved in the decision as to what

there was the rescue of fannie mae and freddie mac and bernanke was participating in all of these things, and then there was lehman which was in some ways a lot like bear stearns, it was also an investment bank. but they let it fail. why did they do that? >> guest: the first thing important is i think they wasted the time before march and september before bear and lehman to read the did the freddie and fannie and that was preoccupying and people disagree and argue whether they did that the right way that they actually did something. >> host: they had to do it. >> guest: the question is whether they could've done some -- the had a problem, so it planned and executed it. they didn't get ready for another bear stearns. they didn't go to congress and say we don't have enough power, don't have enough money, give the equipment we need to cope with a fire like this again. they say paulson and bernanke had we asked we would have been turned down. it was an election year and that would have been worse shape than not asking at all. but they don't. internally. what do we do if this happens again. t

in the latest report, fannie mae said we expect for the foreseeable future the earnings of the companyif any will not be efficient to pay the dividends on the senior preferred stock. as a result, future dividend payments actually will be effectively refunded from the equity drawn from the treasury. which means -- seems to me is the treasury pours money in and they take the treasuries and send their own money back to us again as dividends. director, your counterparts, however at the office of management and budget, omb and treasury, somehow disagree with you. and, your conclusions about fannie and feel the cost to the taxpayers equals the kots of the actual cash infusions pumped into the gses and do not as you do account for risk to the taxpayer. ness of the losses the gse will continue to sustain in the coming years and the "wall street journal" article, said the administration has no plans to alter how it accounts for fannie mae and freddie mac and the federal budget and i don't anticipate any changes, assistant treasury secretary -- said michael bar and they'll have the same appearan

they did do that fannie mae freddie mac thing and people disagree with arguably whether they did that the right way but they actually did something. >> host: they had to do it. >> guest: the question is whether they could have -- the had a problem, is all a planned and executed it. they didn't get ready for another bear stearns. they didn't go to congress and say we don't have enough power or money. the of the equipment we need to cope with a fire like this again. it is a paulson and bernanke have we asked we would have been turned down it was an election year and that would have been worse than not asking but neither did a prepared internally they don't do what we do if this happens again. there's a little discussion about options but not a lot, so i feel they are not well prepared for lehman. lehman gets into trouble. paulson to some extent bernanke are very reluctant to do another bear stearns. they've both been pummeled by their colleagues for bailing out there stearns -- >> host: and by the public. >> guest: and by the public and they say there are three issues here. one, wall st

in the latest report, fannie mae said we expect for the foreseeable future the earnings of the company if any will not be efficient to pay the dividends on the senior preferred stock. as a result, future dividend payments actually will be effectively refunded from the equity drawn from the treasury. which means -- seems to me is the treasury pours money in and they take the treasuries and send their own money back to us again as dividends. director, your counterparts, however at the office of management and budget, omb and treasury, somehow disagree with you. and, your conclusions about fannie and feel the cost to the taxpayers equals the kots of the actual cash infusions pumped into the gses and do not as you do account for risk to the taxpayer. ness of the losses the gse will continue to sustain in the coming years and the "wall street journal" article, said the administration has no plans to alter how it accounts for fannie mae and freddie mac and the federal budget and i don't anticipate any changes, assistant treasury secretary -- said michael bar and they'll have the same appeara

and it all goes back to the community reinvestment act, and then administrations put pressure on fannie mae and freddie mac the other agencies to buy up subprime mortgage securities. so the argument is ultimately the government distorting the housing market is the problem. those are the three main theories of what happened. i don't think any of those is particularly persuasive. there's an element in each of them and none is completely true. there is some criminality, some people have gone to jail and probably more should be september to jail. and clearly -- sent to jail, and of course there was some overconfidence and disaster myopia. i think the government role has been exaggerated. it's a way out for the right, and people who defend the free market, gives them an excuse. it wasn't the market, it was the government. but if you look at the studies, they show only 10% of the sub prime mortgages had anything to do with freddy may or freddie f- fannie mae or freddie mac. this is a private sector phenomenon. 90% of the mortgages were sold on wall street. so it was a private sector phenomeno

fannie mae and freddie mac are particular problems, had to be addressed. but under the current situation, the t.a.r.p. was used about companies and make all creditors whole, except for the shareholders, under a well-designed resolution regime, you know, many creditors could, would, should lose money which would create market discipline going forward which is what is desperately need to of what the moral hazard problem you're referring to. >> the recent sigtarp quarterly report states that there is $317.3 billion of on obligated t.a.r.p. funds available right now. do you support allowing the t.a.r.p. of three to expire on december 31, 2009? >> i think it's very appropriate to begin winding it down. you know, i think we should begin clarifying what additional need, if any, are still remaining to make sure the financial system is still stable and will not, you know, run into any new problems. but i certainly think the t.a.r.p. has mostly served its purpose, and that it's time to start thinking about how we're going to unwind, unwind that program. and in addit

reiterated in the report we released is that fannie mae(kd freddie mac are financed and controlled by the federal government in a direct enough way that we believe they should be viewed as parts of the government for budget purposes. we do not in the end dictate the way administrationt( records th budget for yearsq that are passed. we are continuing including based on discussions with the committees to to project finances going forward. >> so you concluded that for the reasons you laid out that was a reasonable conclusion to place them on budget is basically what you are saying? >> absolutely. and the relationship changesç over time and we will revisit that. >> right now reasonable interpretation would place them on budget and it is contrary? >> that's correct. >> thank you. and this is not an inconsequential decision as to whether it is on budget, is it? >> well, it matteredw3 most for the budget numbers last year because by our assessment taking on board -- absorbing the companies/+ the federal governt was on the hook for the risk the companies bore. the biggest difference was for

reinvestment act and the bush administration joined the clinton administration both put pressure on fannie mae and freddie mac and the other agencies to buy sub-prime mortgage securities of the argument is ultimately was the government distorting the housing market that was the problem. they are the three main theories they think of what happened. i don't think any of those is particularly persuasive. i think there's an element of each of them and none of them is completely untrue but we have seen the worst of criminality. we have been seeing people sent to jail for criminality and more of them should be sent to jail. and clearly there was some sort of overconfidence in what economists call disaster my ops so psychological factors did play a role. i think the government's role has been exaggerated. i think it is sort of way out for the right and people who defend the free market it gives them an excuse. if you go and actually look at the studies they show that only 10% of the sub-prime mortgages had anything to do with fannie mae and freddie mac. they did not buy any more or guarantee them

it just expanded the amount of fannie mae and freddie mac.ecause what we need to do is get rid of fannie mae and freddie mac. if they are going to subsidize housing as they almost certainly will it should be on the budget. that is the white democrat governments are supposed to run. fannie mae and freddie mac are open to corruption and there has been corruption. >> host: this article notes the hostility that this increase towards the federal reserve and the chairman, ben bernanke, and so but before this hostility turned on the federal reserve when alan greenspan was heading up the federal reserve, there seemed to be admiration or reverence for what mr. greenspan would say. how can this institution be both re-aired by some people and have disdain from others? >> guest: that is easy. when times are good and things are going well, people like them. when times are bad, as they have been, people say look why is the public angry about what the federal reserve is doing? they don't like the bailouts. they don't like the fact that they are dancing mone

it just expanded the amount fannie mae and freddie mac -- that is a scandal.what we need to do is get rid of anime and freddie mac. if they are going to subsidize housing, which they most certainly will, it should be on the budget. that is way democratic government is supposed to run. fannie mae and freddie mac running around the democratic process and open to corruption, and has been corruption. host: of this article notes the hostility that has increased for the federal reserve and the chairman ben bernanke. but before this hostility turned on the federal reserve, when alan greenspan was heading up the federal reserve, there seemed to be admiration or reverence for what mr. greenspan would say. how can this institution be both revered by some people and have distain for mothers? guest: that is easy. when times are good and things are going well, they were great and people like them. when times are bad, as i have been, people say, look, why is the public angry about the puppet of reserve is doing -- they don't like the bailout. they don't like the fact that t

or at best a mismanagement of money and why did we get into the subprime cries because we pushed fannie mae and freddie mac to get into the subprime loan area at monstrously low rates and of course the housing market exploded. and here we are again, 870,000 and i'm shocked the american public is not up in arms and they should be after the segment. >> i'd like a house, $870,000, eric! >> you know why it isn't work -- >> you live in jersey! >> nothing wrong with jersey, tobin, here's the problem and what it is. they'll pay the mortgage mitigator, the mortgage servicer a thousand dollars and give them a thousand dollars every year for three years and they make a lot more money charging late fees and legal fees and throwing everything into the mortgage and certainly, they'll lose a lot of money, a lot of money if they drop the mortgage rate and there is no incentive for the banks to do it. but the point here is, isn't what they are doing or not doing, the point is why did they spend $27 billion so far, where is all the money and there's a lot of fraud and corruption there somewhere. we shou

fannie mae lost 20.5 years of its profits in the last 18 months.ig lost 17.5 years of its profits in the last 18 months. freddie mac lost in them and .5 of profit. a little bit more than a year. the point of trying to make is the ridiculousness of what's going on in the leverage that was in the system, the key problem of the system is the leverage. we must regulate that leverage. my third point that i will talk about briefly here is an entry. with five and half trillion of outstanding debt and mortgage-backed securities, the quasipublic are now in conservatorship fannie and freddie have obligations that approached the total amount of government issued bonds the u.s. currently has outstanding. there are so many things that went wrong or are wrong at the so-called gse's that i don't know where to start. first, why are there two for profit companies with more shareholders charitable foundations, and lobbying arms ever given the implicit backing of the u.s. government? the chinese won't buy them anymore because our government won't give him the explici

and fannie mae and freddie mac and all of this and it's government that is the problem. it might be a -- it's not -- i'm not suggesting that government is the answer, but a bankruptcy court system that has evolved from our constitution has proven to be a very effective instrument of helping people and at the same time being fair and equitable. that's my concern. i want your program to work. i really do. i think you need a little bit of a hammer hanging out there. go ahead. >> two things. i just want to be very clear. hope now doesn't really go on or off for what legislation should pass. with all the rules and the tools that are in the arsenal, to today hamp is a dominant part of what we do. if it fails hample, we do other mods etc. my personal background is a capital market background for the first 15 to 18 years of my career. i would share today we have a broken market still in a mortgage security market and the trading market and the government is unfortunately for all of us investing in those. what i do now is i don't know what a bankruptcy on a first lien mortgage wo

one other thing about the fannie/freddie bailout going on. they had that christmas eve extension on the fannie/freddie -- how much money they could buy from the banks and they just raised the capital over $400 billion on christmas eve. we have to let house's job, let the market settled, then everyone will come in to buy and will correct themselves and the banks will go out of business. host: baltimore, on the line for democrats. caller: hello? yes, the article you read some like it was specifically geared toward americans who can afford to pay their mortgage even if. their home is under if now not their fault, the individual american if their house is under water. it is the way the system is run. all lot of people want to blame minorities and people they feel like could not afford these houses as the reason we got into this mess. no, the reason is there were praising those homes of false values. i have been in bet the mortgage and the car business. when they are pushing those loans they don't care what you can afford. it was not my preference

"the washington post" this morning talks about the role of fannie mae and freddie mac. open-" the obama administration has promised -- "the obama administration has promised to rollout new ideas for fannie and freddie this year. a liberal think tank with ties to the administration has proposed new entities called charter mortgage-backed securities, a privately owned firms that would package mortgages into securities and sell them with an explicit federal guaranteed. securitization fees would go into an insurance fund to protect taxpayers against defaults." this is a editorial this morning from "the washington post." open-" this proposal grapples with the fundamental problem -- "this proposal grapples with the fundamental problem of the old fannie and freddie -- an immediate an implicit government guarantee permitted, then cheap access to bar of funds, which they gambled in pursuit of maximum returns to shareholders. it also wisely emphasizes that the new organization's was held rebalance federal support between rental housing and single-family homes. this seems not only

he still insists on a bill of gm, chrysler, fannie and freddie, so there is that cost. until the president commits msf do something, i am afraid a little bit of tax credit here for small business -- although i will probably embraces, is probably too little too late. it is kind of like a guy who goes in and orders five cheeseburgers, two malts and then says he cares about his weight and orders diet coke. if you look at his budget, his trillion-dollar deficit as far as the eye can see, you cannot use enough draconian or apocalyptic language to describe the future. the immediate response today is the fact we do not have the. job the we are mired in double-digit unemployment. host: here is a question by twitter. guest: i personally do not believe that we are under-taxed. we have a spending problem in the washington. you , get the you taxes still going up substantially over the last decade. so, taxes have consistently run -- if you look in the post-war era about 18.5% of the economy. spending has been about 20%. with the spending programs we have now in the next generation i

>> i was not sure exactly what the right way to use the money -- my thought was give it to fannie maeand freddie mac and get them to start buying up some of this bad paper. i don't know. but the point, is it's an option that was never considered, so we'll never know whether things could have been done differently. but the within thing we do know is that the rebate didn't work at all. host: we next go to e ri e. greg, missed you earlier. caller: thanks. mr. bartlett, you just mentioned the bad paper. it really strikes me as sort of disingenuous of the right and the conservatives to complain about our deficit and the problems that the government's going through right now with financing all of these things, when you compare the deficit that the federal government has with the obligations that business has due to all of that bad paper, all the debt that they created, the trillions of dollars. i mean, credit default swaups are like $43 trillion. i mean, it's unbelievable the insurance that the business took out on itself against its bad decisions. and now all of that's coming due. but when

it just expanded the amount fannie mae and freddie mac -- that is a scandal.hat we need to do is get rid of anime and freddie mac. if they are going to subsidize housing, which they most certainly will, it should be on the budget. that is way democratic government is supposed to run. fannie mae and freddie mac running around the democratic process and open to corruption, and has been corruption. host: of this article notes the hostility that has increased for the federal reserve and the chairman ben bernanke. but before this hostility turned on the federal reserve, when alan greenspan was heading up the federal reserve, there seemed to be admiration or reverence for what mr. greenspan would say. how can this institution be both revered by some people and have distain for mothers? guest: that is easy. when times are good and things are going well, they were great and people like them. when times are bad, as i have been, people say, look, why is the public angry about the puppet of reserve is doing -- they don't like the bailout. they don't like the fact that th

so why not tax the car companies, fannie and freddie?because the government largely owned it. host: next phone call from ohio. guy on the republican line. caller: one thing that could help people who do not have the money to be able to afford health care insurance would be to bring their wages up. maybe make them are around $15 an hour. that would help all lot of people before the insurance we need. it would also -- thank you. host: we will leave it there. we are going to go to josh in rome, georgia. caller: is it generally recognized in the government, and the federal reserve, treasury, that it was a mistake to let lehman brothers go into bankruptcy? the second part is, if lehman bros had not gone into bankruptcy, when the economy have been better now than it is? guest: the joy of hypothetical. i think most will say that it was a mistake, but they did not have a choice. the mechanism did not exist to rescue them. that is one reason the administration is pushing for the power they are asking for. it would allow them to wind down a compan

. >> i think fannie mae and freddie is fundamentally sound.ects going forward are very solid. >> please! >> to your favorite married couple? >> tiger woods. if that is not a marriage made in heaven, you know. swedish supermodel and ahh, hookers and stuff on the side, too. then we have congresswoman chikowsky and robert creamer. married. i don't think he took her name. hard to pronounce. and then that is good. tough corruption of congress. they can lay in bed at night and say hey, i stole a bunch of money. the other one can say i did too, in a completely different way. anita dun and her husband, whatever -- he's the attorney now for the white house. by the way, i thought that wasn't happening. i thought when we broke that story we were called crazy, that that wasn't going to happen. hmm. >> your favorite couple of the year, i think, has to be clara pittman. >> i don't think they were technically married. >> yes, they were married. >> were they? >> yes, they were married. >> two names they will never say, cloward and piven. if you don't know wha

one is the freedom now party, the other is the mississippi freedom democratic party led by fannie hamer, sharecropper from mississippi who was not allowed to be seated at the 1964 democratic national convention in atlantic city, new jersey, and the other is going to be the allowances county freedom organization which is nicknamed the black panther party, and that is started with grassroots locals with the help of snic activists. and when we think about william worthy, worthy's very interesting because he's a plaque power activist who's also a pacifist and actually went to jail in world war ii for refusing to fight in the war, but worthy wants a foreign policy based on human rights. way before president jimmy carter talks about a foreign policy based on human rights, william worthy was talking about this. and worthy is one of the people who is part of the robeson generation. i call the robeson generation the group of activists who come of age during the prime political time of paul robeson who's really the key african-american political and cultural figure of the 1930s and '40s and '50s

i've always looked at fannie mae and freddie mac as being part of the issue and how it grew over timem for the bad behavior of our underwriter banks but i think they were part of those problems. >> let me ask you about my limited time available -- in my limited time available, what is in your view proprietary trading? >> the rules of the federal bank, the national bank, are such that -- but that around. we conduct our securities companies much like our colleagues. >> that is not the bank. >> is part of the holding company. you can talk about it and try to define it, but i think when you all set a position, if you're doing it for the firm, it is managing the risk. the challenges of about regulating proprietary trading in some of the bank holding companies -- what is proprietary and what is customer-driven? if we delay interest to help a metal customer, we have to offset that, because we cannot carry one side of the trade. we have to offset that. on the other side of the trade, it is proprietary. at the end of the day, is to manage risk so that we can provide that middle-market customer

they're going to be made whole -- >> this does not include fannie and freddie, right? there has been an awful lot of teeth gnashing and there has been an awful lot of hand wringing about the way these banks have acted. we will see if the people that have their comments be known about the irresponsibility of their actions, we will see if that is backed up by ensuring that the american taxpayers are made whole for what they have lent these bankers. >> the president pushed these bankers very hard to lend more money when they were here. isn't this $117 billion that they won't be able to lend? >> if you believe that, then you should get an interview with one of these bankers and ask one bank why their bonus pool is $28 billion. it strains any common sense to assume that their share of $9 billion in a year would somehow preclude them from loaning money to a small business when they have set aside $20 billion for bonuses. i do not know how math works on wall street, that is not the way it worked in alabama. >> i have a quick one on haiti but i want to follow up on chips and q

many large financial institutions, including especially the government sponsored housing finance, fanny mae and freddy mac were too big to entail. i don't expect to discuss these at length. but i mention them as a warning against mono causal explanations for what we've been through. the recession just ended ranks as one of the deepest on record. it was led, as i suggested, by the plunge in housing construction that followed the boom. during the boom, housing prices almost tripled. but by 2005, evidence was emerging that the run up had gone too far. they can see rates began to rise in late 2005 and hit record highs. measures of home construction and sales activity began to fall. home prices also began to decline. that reduced equity values and household wealth. it led to rising defaults and foreclosures. the layoffs in residential construction dampened growth and thus dampened growth in overall household consumption spending. that caused the rest of the economy to slow and then the expansion officially ended in december 2007. we turned into contraction mode. the recession that followed w

it is fannie stevenson was an american woman, even married with a gold digger of nevada and one day her husband had left her. she had taken her children and moved to paris where she had met robert louis stevenson, this poet and she met him, it was an extraordinary story. then she wrote a book about [inaudible] and she was honored in this very museum for that. he was the first renaissance woman painter the daughter of a famous painter called [inaudible] , and she just published a big book about a wonderful agent who's also the agent eckert told you about she's going to try to find an american publisher for this epic that takes place in, and in the mountains. so she's agreed researcher but she research with history finished. i need to meet people. my history is then the personal testimonies of people alive. working with archives and dust papers and all that is one thing. i couldn't do that. i need him in contact. somebody has to inspire me and if this person is inspiring to have to have enough talent to inspire, to translate this inspiration in the books. thank you. yes? >> i am from calc

i am more interested in about risk-management practices at lehman brothers and bear stearns and fannieae and freddie mac, those as opposed to others that failed and went under. but i think the american people, we do not care about the risk- management practices at home depot or caterpillar, or even the biggest firms, like wal-mart and chevron, because if those firms bail and go under, and they go away, their competitors swoop in, but i think a lot of the problem and a lot of the political blowback -- we could not allow the largest financial firms to fail because of the broaderçó consequences for the economy, so what i want to do is first focus on the perception of the too big to fail question, and a question for each of you, on both investors and managers and your board members, and that is in the fall of 2008, do you believe that investors that were investing in your firm where pricing in the possibility that the government might come in and provide assistance? that the government might decide that your firm was too big and too interconnected to fail? and then, the related question, t

we watched fannie mae and freddie mac be taken over by the federal government and then by an executive order right before christmas have them open up the debt ceiling on fannie and freddie where every american is a guarantee-or of the debt which can be as many as $-- 5.5 trillion. we watched negotiations take place behind the scenes which told the bankruptcy court how to push our automakers through there and both of them nationalized, taken over by the federal government. then we watched the $787 billion economic stimulus plan be passed in an urgency that hasn't produced a product and a result except the debt that's going to drag down this economy for the american people. and then behind that out of this house came hurry up and rush cap and trade, cap and tax, pass it, and it passed out of the house and went over there on the docket of the senate. and the american people began to realize what was happening. they couldn't first believe it. they didn't think at first the $700 billion tarp was really real. somehow they trusted that we knew what we were doing here as a majority. the majori

. >> get your fannie mae out of my face. [ laughter ] >> mike: your left foot on paragraph 11. >> easyrney. >> right foot on subsection "c." >> this is from the 1974 bill. >> ahhh! [ laughter ] >> mike: you guys didn't last very long. i don't know the country will either if we get all convoluted in this. [ applause ] >> mike: another not so brilliant bill that came out of washington last year was the economic stimulus plan. that included tax cut for individuals making up to $75,000 a year. amounting to $35 a week the first year and $8 a week the second year. we wanted to find out how much $13 really is worth. we gave $13 to three members of our staff and we wanted them to see what could they get for that in new york city. ♪ ♪ >> are you selling tickets? >> i am. >> i want to go on a bus tour but i'm on a budget. can you help me? >> a budget. would you like to ride? >> yes, i would. >> i have $13. >> $13? >> yeah. >> no, sorry, you can't afford it. >> $49 is the cheapest you can get. biggest discount. >> do you think maybe i could stand in the road for $13? would that get me in? >> i do

denunciations of the community reinvestment act that introduced affirmative action in lending or fannie mae and freddie mac whose irresponsible decisions were a fairly significant factor in all this but all the same there is the elephant in the living room. the factor that more than any other contributed to the crisis but never gets mentioned, is never mentioned in a negative light, certainly in political circles where to the contrary we are encouraged to not even think about it and that is the federal reserve system. most americans here that and don't even know what it is. i am never going to know. this is too complicated. i had better just what the experts take care of this. the experts are a bunch of quacks so it is important for us to learn this material. to know what is going on so that we can have an informed opinion so that we won't inadvertant we enlist in the army of drones who say the solution of the crisis is to give more power to our wives overlords. the federal reserve system is in charge of the country's money supply as i am sure i don't need to tell people in this room. i

fannie and freddie or two-thirds of all -- are effectively the nation's mortgage lender.portant that we address that issue. we can talk about how to do it. i am more optimistic about this than most people, because i think there are some logical, sound, economic responses to the fiscal crisis. in my mind, is about getting the political will to do its. if history is any guide, we always figure out a way. i think we will get the will to address the fiscal situation. having said that, a necessary condition for addressing the long-term fiscal situation is to get the nation's economy growing again in a clear and definitive way. the economy needs a little bit more help to do that. >> your last point was the most optimistic i have heard in a long time. with that, let's turn over your rudy. >> mae west once said that too much of a good thing can be wonderful. i don't think she was talking about stimulus at the time, or at least not fiscal stimulus. we start with a situation here, obviously the unemployment rate is too high, the national debt is too high, so what do we do? because

so for example, fannie, freddie, lehman, all had big events with deeds numbers as of offsetting, butclearly people are taking risks. they settled and cleared. in the benefit of hindsight those that means people were able to hedge their risk, lay

. >> what about fannie and freddie? have not heard the president mention them in any of these financial proposals. why is that? >> i do not think it is accurate to say they have not been mentioned. it says they are going to work on the broader market as the hole, which includes fannie, freddie, and a broad expanse of things and what we do in the mortgage market. it was not mentioned today because it is not a commercial banks. >> since the white paper, nothing? >> i do not have a comment on the specifics. >> often you have taken pains -- [inaudible] >> the spirit of this, which is trying to eliminate some conflict of interest and which is about trying to limit the amount of subsidy or backing from the american taxpayer getting translated into their bottom-line profit. those are themes they tried to pass back in the depression, but the specifics of glass-stiegel, underlying securities -- underwriting securities are no longer in the current financial system, but they pose the most risk. i think if you reimpose glass- stieg

fannie and freddie did a lot of good things.they got larger and moved into direct lending, then they were the source of some of that problem. but the responsibility of making those loans were on the lenders, and some -- not most -- made loans that were not well-underwritten. once that started happening to a large degree and sold to wall street, that is where the problem started. as far as blame, you have to put that on the lenders and on the borrower's, knowing they could not repay the money. a lot of it, also, is on the regulatory system. they did not step in to regulate this for safety and soundness. i have to say, even trade associations, like mine, did not catch this. there is blame enough to go around, but a big source, as you said, was making mortgages without their ability to pay. it is fixed, but all the horses are already running around in the pasture. host: president obama proposed this responsibility fee. what responsibility do financial institutions have to be prepared for future instances of failure? guest: we agree

we know what he is doing with fannie mae and freddie mac. compared a document for escrow yesterday, there were four loans on that with no payments for two of them. he has got all of the communists, acorn, all of these people lined up. he was smacked down in massachusetts and he will get smacked down again and again. he said that this was not about him? this is absolutely about him, personally. host: you are seeing the majority of america still liking the president, personally. they like what he is saying. what they do not like are the policy implications. what you will see during the state of the union is him trying to reach that middle-class, trying to reach that anger and frustration and giving people a reason to be hopeful again. . guest: i don't think you will see much of a shake-up. the thought of ben bernanke not getting confirmed to, wall street had a rough week last week. host: baltimore, maryland, you are feeding back, turn down your television or radio and we will go on to lafayette, louisiana this is our democrats lied. -- line. c

police say the suspected gunman was armed with four guns and a fanny pack full of ammo. they say dozens of workers in the plant ran for the roof, broom closets, boiler rooms, anywhere they could find safety during the shooting thursday. authorities still aren't sure of a motive but say the suspect, 51-year-old timothy hendren, was involved in a lawsuit against the company. >>> octomom, aka nadya suleman, has won a court victory and won't have to worry about someone monitoring the family's money. this is from radaronline. there was a call for an independent guardian to watch over the children's finances. it ruled the petition was "an unprecedented meritless effort by a stranger," and said there was no proof nadya suleman was engaging in financial misconduct. >>> just days before he heads to jail, balloon boy's father has a message for the public. he didn't do it. he insists his family did not plan a hoax, so why did he plead guilty? $$$$$$$$$$$$$ >>> what he did was a terrible injustice to the over 10,000 people. >> the man who allegedly caused the shutdown of

were there. çóhe said they wouldç be votinr the abolishment of freddie may -- freddieç mac and fannieles used that word abolished. i have not had a chance to visit with the congressmanq. i look forward to doing so. i know i will have the çopportunity to do so. we will talk about it. i do get that he is the decision maker, but in this period, it was not a greatç deal -- great day for me and it was not a great day for our 6000 employees that saw that headline. it is something that i met with employees on monday. not our entire workforce, but a subset to seeç how the company was dealingç with this issue. it was an issue. it was not a great weekend for our employees and is one of the things that as ceo, i have to deal with. i haveok to try to keep people energized, motivated, working on the president's program, making sure that we provide liquidity and affordability to the mortgage market. i have got to do all current -- energized. we have done a great job so far, but certainly that headline was not helpful. >> after about six months, would you have an assessment about the capabilitie

misrepresented their real character of frank o'connor which was a gentle ellen ghent, a gracious and fannie mae and to herself and others. she went on to have the life nathaniel branded could be looked at as a mistress. and she came to america to write with a purpose and mission and she accomplish that and put everything else aside in order to do that and her marriage had to conform to that pattern. >> there's a question way in the back wall the microphone is getting their last jennifer a question one of the things i found interesting with your discussion of the manifesto of individualism and project related changes it went through from the first draft a through the second draft and can you talk about that? >> then manifesto was something that rand roche immediately after her first period of political activism which was on a campaign of 1940. so she had joined through the willkie club and eventually they dissolved but rand thought we have so much happening less form our own group a profession started to look around for recruits. she found one partner and he needed a statement of principles.