freddie mac just shy of $2. pretty interesting when you think about this whole concept of looking at a stock over one year. come next week they will look like they're at a one-year high. the stock only tells part of the story. diana olick is here to explain how the mortgage market and fannie and freddie's role in it has changed since last year. diana? >> erin, as you said, it was one year ago this weekend that the federal government stepped in, took over fannie mae and freddie mac and set up something of an iv line of cash to keep the two mortgage giants alive. as of september 3rd of this year, take a look at just how much cash has gone in. $95.6 billion in treasury purchases of senior preferred stock to cover their losses. $181.5 billion in treasury purchases of freddie and fannie mbs. all in all, the total tally is $1.12 trillion in expenditures and it is, of course, still coming. well, what did it do? for one, it served to drive interest rates down on 309-year fix fixed. rate plum nmeted to record lows. the s

barr, the treasury asks freddie mac to devise a second look process, beginning on august 3rd whic freddie mac will audit a sample of mha modification applications. how will the treasury insure that the sample is a cross representation of actual borrowersing mha modifications -- seeking mha modification. >> we asked freddie mac to do a sample audit, not onl of denied borrowers but also of the eligible pool at each inches station -- institution, and freddie mac in the first instance will be doing that analysis. that analysis will be made available to us. we'll be checking it. we'll be insuring that it is appropriately designed, and we will be gathering the information they provide to us to help us inform our relations with individual servicers as well as to spot program design flaws that we need to correct. >> just, describe for us the provisions of the second look process. does it, does it test for and how? and what documents are required to be submitted? >> the second look process is designed to determine whether any of two things happen. whether, first, a borrower that was eligible was i

because you have the reinvestment act but parallel to it was freddie and fannie and freddie and fannie were encouraged to make all of these loans to people who couldn't pay but then the bankers got sta smart and they cut the loans up in lots of little pieces and packaged them up and sold them all over the place. freddie and fannie -- the thing that was interesting was, people were really getting down on bush for making such a bad economy and it was free enterprise's fault, it was george bush's fault and reality, you go in "the new york times" and you see president bush in 2003, i remember because it was september 11, 2003, "the new york times," not exactly a conservative document, and it says, this is bush saying, hey, i've got to have more authority to control freddie and fannie, they're out of control. they're making loans that are going to become a huge disaster. at the same time you have a quote in that article, barney frank from the floor of this house who's now the chairman of the committee that runs all of that say, freddie and fannie are fine. you can read the quote and so -- b

a freddie krueger for the nobel laureates who think the economy is doing badly. and yes, yes, a chilling michael myers for those who think this rally is simply a rally in a bear market. because i represent the building blocks of the economy and right now we're in great shape. those of us who have been around long enough, grizzled investing veterans like myself, we know how to monitor the real economy, the building blocks of the economy. corrugated boxes. you can't ship without them. polyvinyl chloride, you can't build new houses or buildings without it. bricks. well, you can't have new infrastructure, developments without it. do you know that all these three things you have to watch if you want to take the pulse of the economy and the market. now, in the last month i have been doing nothing but checking in with companies that are in these industries. i'm talking about the international paper and temple for core gate box, ppg and dow chemicals for chloride. the martin marietta aggregates for this stuff. bricks are not dreams, that's what they're made of. you know

government will not be repaid for its full investment in fannie and freddie. >> fannie and freddie.rt today. >> that's correct. >> vice-chairman. >> vice-chairman. >> do you know where all the bodies are buried? >> i had many conversations with wilbur, not a lot of bodies buried. no, i'm really looking forward to it. they have -- he's had a very successful track record of investing in distressed companies and turning them around and making them special. had a big emphasis in financial services at the moment. he has the largest independent mortgage service. >> what i meant by that, you know this industry well. dislocations create opportunities. there's huge dislocations now. can you share with us some of the areas you would be urging wl ross to be taking advantage of? >> there are a lot of areas in dislocations in financial services and especially the mortgage world. he's continued to look at services. he's continued to look at the whole mortgage platform and how to do it better, better investment opportunities. as you know, he's been an investor in banks. fdic changed the rules to m

one of the other concerns i have here is exactly what led to the problem with fannie mae and freddie mac, and that is the inability of a regulator who gets trumped by, well, in this case you had hud, and hud was in charge of the mission. so you have bifurcated regulation, the same type of thing we could end up if we listen to the concerns of the current safety and soundness regulators who are opposed to this consumer financial protection agency. what they're worried about is dueling regulators who bifurcate that regulation and do what hud did with respect to fannie and freddie which is to say, no. we trump safety and soundstnd because we have this mission requirement. to get subprime lending up in the united states, we have to have a portfolio 50 percent subprime loans, therefore, we're not going to look at safety and soundness, we're going to look at this mission because it trumps safety and soundness. so when we look at this cfpc, cfba, this new agency that's being advanced and we look at why the regulators are concerned about it, the reason they're concerned in my mind and listeni

that is not as i'm interested in. >> please come and do not recreate fannie mae and freddie mac. -- in the form of these hybrid institutions, have private, how public. >> you think it was one of the causes? >> i think they were a factor, yes. >> back in 999, and they said 27% of all the liabilities of firms in the u.s. were guaranteed by the government. another 18% enjoyed some support. that is by 10 years ago. then we look at march 2008 when the fed stepped in and assumed the risk of the loss of about $30 billion. we have seen this rapid expansion of both the perceived and the actual financial safety net, and the safety net. to you think the expansion of this that has exacerbated the too big to fail problem? >> yes, i think the whole discussion we have been having here is trying to figure out some way of pulling this out. >> i'll have to ask him to get the rest of his responses in writing. >> thank you very much. >> thank you. >> we thank you for being here. i do this on behalf of our share. we will be coming back after this vote. it is a great pleasure that we of have you here today.

greta: ok, so we as fannie mae and freddie mac in early september. that was the first clue.rothers went under. that was the second clue. meanwhile, the dow, what happened? >> it dropped big time. you really saw the drumbeat of lehman brothers and aig and the fact that the government had to bail it out, as well, but it really did not begin until october that the panic set in, and that is what we will try to through this series talk to various parts of what we have learned from that and where we are going. greta: where it is going, i guess that is the question everybody has. where is it going? do you have a crystal ball, and looking at your research and maybe tracking things in history? >> sure. the reporting leads us to two main conclusions. one is that the recovery when we get out of the recession, we may already be out of the recession, but when it is declared, we are out of it, it may be schiavo were -- shallower. for many baby boomers, is happening so close to retirement, you have a near- death experience -- this happening so close to retirement, we may not see the spendi

freddie mac wil audit a modification application.ho will the treasury ensure that it w a cross representation of actual borrowers seeking mha modifications? >> we've asked fddie mac to do a sample audit not only of the denied borrowers but also of the eligible pool that each institution, and it will be freddie mac in the first instance will be doing that analysis. that analysis will be made available to us. we will be ensuring it is appropriately designed, and we will be gathering the information that provide to us to help us reform our relation with individual servicer as well as the spot program design flaws that we need to correct. >> just describe for us the provisns of the second loo process. what does it test for? and how? and what documents are required to be? the second look process i designed to determine whether any of two things happened, whether first a borrowers that was else available was inappropriately denied a modifition. or a pool of borrowers that ought to be brought in aren't even being lookedt. and in both instan

that elits you are freddy gonzales ising looing for a blast. he will take either.maybin swings through. threatening to throw. no first baseman. dunn is playing way behind the runner here with the 5-run lead. got him on the outside corner. and lannan for his 3rd k of the day. >> rob: he gets aahead and he paints it -- aand add he paints the corner. looking for some kind of breaking ball or a changeup. he got the powder river. >> bob: sanchez in the first homer of the year here last night. in the 6th. miller the number 9 spot. high chopper to short. guzman has to wait for it. to desmond. that was the 3rd out. no need for a double play. top of the 5th coming up. @ at southwest airlines, we love bags! we love duffel bags, golf bags, small bags. these bags right here-- they fly free! i wouldn't pay to fly in here. why would these airlines charge for bags? why do you charge for bags? what's a flight without bag fees? about a hundred bucks cheaper. free, free, free, free, free, free, free. we love taking care of bags. bye, bags! we'll see you when you get home. ♪ ( d

one of the other concerns i have here is exactly what led to the problem with fannie mae and freddie mac, and that is the inability of a regulator who gets trumped by, well, in this case you had hud, and hud was in charge of the mission. so you have bifurcated regulation, the same type of thing we could end up if we listen to the concerns of the current safety and soundness regulators who are opposed to this consumer financial protection agency. what they're worried about is dueling regulators who bifurcate that regulation and do what hud did with respect to fannie and freddie which is to say, no. we trump safety and soundstnd because we have this mission requirement. to get subprime lending up in the united states, we have to have a portfolio 50 percent subprime loans, therefore, we're not going to look at safety and soundness, we're going to look at this mission because it trumps safety and soundness. so when we look at this cfpc, cfba, this new agency that's being advanced and we look at why the regulators are concerned about it, the reason they're concerned in my mind and listeni

are we and now -- are we now going to analyze medicare, the post of as, the fdic, fannie, and freddie? we did the post office, the fdic, fannie, and fredi -- the post office, the fdic, fannie, and freddie? >> the same thing with medicare, with food stamps, the same thing with everything from low interest loans to money for the u.n. this government has misread virtually every spending proposal, and now, after bailing out anybody, it wants to put $900 billion more. of all of the arguments i heard tonight, i think that what is the weakest, and i think the president is going to regret putting a specific price tag on it and suggested that is all is going to cost. sean: making private insurance companies subservient to the state, and here is the track record we have. they have taken of the automotive companies, taking over banks, dictating the pay for ceo's, and i do not think they can compete. is this not the nationalization of these companies by definition socialism? >> i keep thinking, here is the government that gave us the compassion of the irs, the efficiency of the post office, and t

are we and now -- are we now going to analyze medicare, the post of as, the fdic, fannie, and freddiewe did the post office, the fdic, fannie, and fredi -- the post office, the fdic, fannie, and freddie? >> the same thing with medicare, with food stamps, the same thing with everything from low interest loans to money for the u.n. this government has misread virtually every spending proposal, and now, after bailing out anybody, it wants to put $900 billion more. of all of the arguments i heard tonight, i think that what is the weakest, and i think the president is going to regret putting a specific price tag on it and suggested that is all is going to cost. sean: making private insurance companies subservient to the state, and here is the track record we have. they have taken of the automotive companies, taking over banks, dictating the pay for ceo's, and i do not think they can compete. is this not the nationalization of these companies by definition socialism? >> i keep thinking, here is the government that gave us the compassion of the irs, the efficiency of the post office, and the

and larry, the biggest losses we'll take is on fannie and freddie.probably lose our -- the entire bailout of that and that was in july. that wasn't part of the september thing. in fact, they failed two months before september. you know, another thing that you need to pay attention to, and i think you have, is there's been all this instance on lehman and that they failed. well, you know, aig was bailed out. there was not a lot of discussion this week about all the companies that we've bailed out. yes rs we did bail out aig, but there's $180 billion yet to be repaid. >> yeah. it will be interesting to see how much of that we get back. thank you for joining us. >> a republican on the house financial services committee. >>> up next, stocks on the move and which ones to watch this afternoon in the trading. >>> plus, the grass may not be greener for much longer. big government turf wars could be coming. we'll be right back. i've been growing algae for 35 years. most people try to get rid of algae, and we're trying to grow it. the algae are very beautiful.

. >> and the beautiful actress freddie washington morphs into the activist. >> freddie washington to dawn smith. dear dawn smith, excerpts from your column in which you quote a director of lost boundaries has just been brought to my attention. i a so appalled and not a little fighting mad to think that a so-called intelligent adult could be so viciously ignorant as to give as his reas for not casting any growth in the above mentioned picture that the majory of negro actors are of the uncle tom show shuffling canter type of performer. well, i would like to say something for public print on the subject. in the first place neither offered workers nor a new expression on from the beginning of the production plans ever considered usi a negro actors to portray the rules of the johnson family. therefore negros having the physical appearance and ability needed for those res were never. there aren't many negro actors and actresses who are consistently turned down for plays and screens on the excuse that they are too fair, too intelligent, to modern looking. i know because i am one who falls i

fannie, freddie and ginnie mae, you cannot get a securitization done right now.utside of the government the market is pretty much dead. >> what do you think it needs to get things moving again? >> i think it needs time. one of the reason why it is dead, the policemen, the ratings agency, the public has lost faith in them. it has to take time, new rules, new laws coming down the road to get people more comfortable. but you need a stabilization of the housing market. it looks like we are getting some stabilization. the investors have gotten burned so bad and the securities lost liquidity, it is going to take time for people to accept securitizations. they have to be clean. it will take a while. the government outside of fannie and freddie hasn't worked well. >> jim, do you agree with that? th the government tried to get the market going. as the man achieved what it set out to do? >> i believe it has achieved what the plan set out to do, try to establish some basic amount of stability into the marketplace. the overarching key to securitization being successful again

washington's intervention in the housing market with government sponsored entities fannie mae and freddie mac, brian costin of the heartland institute argues against continuing the tax incentive beyond its novemeber deadline. "a stimulus to correct another stimulus is not going to solve your problem. to solve the problem, admit the mistake, get out of the housing market, and over time, the market will correct itself." to qualify for the full 8- thousand dollar credit, homebuyers must not have owned a home within the past 3 years, and an income below 75-thousand dollars or 150-thousand dollars for a couple. and the transaction itself must close before december 1, that deadline has buyers and realtors scrambling to be under contract by the first or second week of october. "the next 30 days are going to be very busy." a bill currently in the senate would nearly double the credit to 15-thousand dollars, eliminate all income caps and expand it to include all homebuyers, not just firt timers. it is sponsored by a republican and has several democratic cosponsors. it's only september, yet retaile

. >> what role should fannie and freddie going forward -- fannie and freddie plague going forward? >> i have a short answer. it is beyond my pay grade, to tell you the truth. the administration pushed this if you -- issue of four decision at a later date. it is a very difficult call to make. there are enormous competing interests with respect to the capital markets. i know there is an enormous amount of careful thought going on at the treasury and the fha. i think it is too early to signal where it might land. >> last question. now i have to make a decision. professors aren't good at that. let's and with something noncontroversial. this is not my question. this just came in the mail. the sec is a notoriously hard to change a culture that has stymied previous commissioners. what are you doing to change the culture? [laughter] >> it is a fair question. the sec has an enormously proud a 75 year history. there is not another agency at the federal government whose commitment over a long period of time to investors, to a fair and free markets, to a level playing fields, matches the sec.

jon: the bailout of fannie mae and freddie mac cost taxpayers hundreds of millions of dollars.s going to legal fees to to defend the shady actions of some of the top executives of those organizations. they are accused of taking more than $100 million in bonuses that they did not deserve, and when they left the company, fannie mae was supposed to cover their legal costs. those bills are now yours and mine to pay, and they cover more than $6 million. this just has so many levels of irony. our government, to whom we pay taxes, sued them to try and collect these bonuses back. they get defended by $6 million worth of lawyers, and we pay for that, also? >> right, and the government subsidized it to begin with. the only thing that changed was that the government took over fannie and freddie, so as a result, they are now picking up the tab for what the company was originally going to be paying. even more taxpayer money is going in to this situation, which is ridiculous. jon: i would not feel bad if we got our bonus money back. any news on that front? >> court room fees are continuing t

if we had moved on the risks exposure of fannie mae and freddie mac, would it have made a difference? perhaps. but the main thing is, we were -- we had private institutions that were too heavily leveraged that were basically generating growth and income for themselves, and of turnover trans actions ha had no benefit for the underlying economy. >> should the deficit be a bigger priority then? >> i think yes, but the deficit will be a big priority, but it is very important that we not do what is now almost universally conceded that president roosevelt made a mistake when he started to bring the deficit down in 1937 before the economy had fully recovered. so what happened was, you couldn't really bring the deficit down because there wasn't enough revenue coming in. there was too much of a slowdown, and he contracted it again. i think when it's apparent that the recovery's in full harness, at that point the government will have to address the deficit. because at that point, the rest of the world will not want to buy our public debt. they'll know that we can do it. and they will expect us

sean: the one that bankrupted any -- fannie and freddie and post office.hey can't run cash for clunkers. >> highly successful. 600,000 cars off the road. sean: no one is buying are aca. buy every american a car. >> ford sold a bunch of cars. sean: now waiting for another handout before they buy one. >> you want to let fannie mae and freddie mac go under. sean: i didn't want them giving loans to people who couldn't afford to pay them back. >> they were there they went under. they were going to go under completely and people lose their mortgages. sean: it was the democrats because they believe in socialism redistribution, forced the banks and financial institutions to make the risky loans. >> well, yeah. i think the new models of chevrolet should have barney frank as a hood ornament. barney right out front. >> where did you come up with this? this is the problem being on with an actor. you don't know when there is lines and a reality. barney frank did more to save the financial institutions of this country than any other single human being next to barack oba

let me throw fannie and freddie in. we will never be bailed out and paid back on fannie and freddie. i've got the post office, i've got all this t.a.r.p. money. you're mentioning medicare. medicare is probably $30 trillion or $40 trillion in the hole. that's an agreed upon number. and now we're going to have some massive government takeover, whether it's called a government insurance company or whether it's called a government-backed option. steve moore, there's a generic lesson here and i want you to stel spel it out. this is bailout nation. this is the never-ending nightmare of government spending and borrowing. >> it is. and i like the way you connect the dots there, larry. it is true. if you look at all of these industries that are run by government, whether it's the education system, where costs are out of control and quality is going down, whether it's the postal service that cannot pay its bills and now needs a bailout. whether it's medicare. i mean, can you show me a single government program that works? you kee

they say look it's ry clear, fannie mae, freddie mac,the government created this probleovernment regulation made it worse. the other sideeople y it'she market, these gs were out of control, they clearly need me regulation. sounds like people already kn why the patientalmost e. >> wel the proponent have given ideology are pting eir they'reious out there. but here'shat i think the country need. aftethis period of excess, the magnitude of what's happened her has, will require thate do serious self examination. there's a lo of peopl who want to usehis for the ideological purposes, there's a lot of peopl who want to blow by what happed and go back to at they were dng. it will serve thecountry well if we have a though unbiased historical accounting. so i don'tthink wre too late at all. >> reporter: youe charged by congressith looking at pk firms that failed. how deeply willou look at the decisions that mr. bernke made,the fear chairman, dr. geithner de who is now the treasury secretary, look at their decisis, because people i've talked to say wre not clear exactly what happenewith bear stearns an

>> the public option will do for healthcare what fannie mae and freddie mac did to the housing market. it won't be a good idea. and asking these actors to give us their ideas about healthcare or policy is like asking a defensive linemen how to dismantle a nuclear bomb. it doesn't make sense. they don't know what they are talking about and don't understand capitalism. cheryl: we will leave it there. men, forget spending money on fancy dinners and expensive diamonds. what women want from you between the sheets. what's fresh from ziploc? you know all the little things you do to help the environment? here's one more... ziploc evolve. ♪ an ultra-light bag designed to keep food fresh... made with 25% less plastic. and made with wind energy. ♪ ziploc evolve. better for the environment. still ziploc fresh. all at no extra cost. designed with you in mind. s.c. johnson. a family company. cheryl: time for "what do i need to know for next week." tracy. >> a survey was done, one i have to admit i didn't participate in. it showed eight out of 10 women have sex with their husbands so they can get ho

they s look it'svery clear, fannie ma, freddie mac, the government created this probm, government rulation made it worse. on the other side peoplesay it the market, theseuys were out of control, they clearly needore regulation. sounds like people already ow why the patient almost die. >> wl, the proponent have given ideology areutting their they'reious out there. but here what i think the country need. afr this period of excess, th magnitude of what's happened he has, will require that we do a serious self examination. there's a t of peoe who want to use this for tir ideological purposes, there's a lot of peoe who wa to blow by what hapned and g back twhat they wereoing. it will serve the country well if we have a trough unbiased historical accountin so i don't thinke're too late at all. >> reporter: y're charged by congre with looking atefk firms that failed. how deeply will you look at the decisions that mr. beanke made, the fear chairmanand mr. geithner made who is now the treasury secretary, look their decions, because people i've talked to say we're not car exactly what happened wi ar

we ought thought fannie mae and freddie mac had an implied guarantee. when bad things happened and things fell apart they really needed the government to truly come and backstop them. it speaks to the specificity. >> robin of "business week," we appreciate it. >> thank you. >>> bank of america is announcing how it intends to begin paying back its two government bailouts. they want to first pay the government $425 million for unused federal guarantees against losses at merrill lynch. >> it also says it's trying to convince federal regulators that it's sound enough to repay billions in t.a.r.p. funds which could allow it to move forward ridding itself of government control. >>> today new security bulletins issued by counterterrorism officials in washington. stadiums, entertainment complexes and hotels around the nation warned to watch out for terrorists. >> this new warning from the fbi and homeland security comes on the heels of the arrests of three men in a terror probe that stretches from new york city to colorado. >> police departments are stepping up

>> the public option will do for healthcare what fannie mae and freddie mac did to the housing marketit won't be a good idea. and asking these actors to give us their ideas about healthcare or policy is like asking a defensive linemen how to dismantle a nuclear bomb. it doesn't make sense. they don't know what they are talking about and don't understand capitalism. cheryl: we will leave it there. men, forget spending money on fancy dinners and expensive diamonds. what women want from you between the sheets. @@pp cheryl: time for "what do i need to know for next week." tracy. >> a survey was done, one i have to admit i didn't participate in. it showed eight out of 10 women have sex with their husbands so they can get house work done around the house. we multi-task. this is making perfect sense to me. she wants something done, she knows how to get it. this how she does it. and i bet they have clean lawns so men, no need for fancy dinners. >> what is the reasoning on the other 16% is >> it is lame. i have a headache. romance and passion way down on the list. cheryl: jonas, you have to fo

a month that saw fannie mae and freddie mac taken over by the government, lehman brothers' bankruptcy and the fed bailout of a-i-g....not once but twice. the fed also backstopped money market funds as investors made a dash for cash. and by the end of 2008, the fed had cut its interest rate to zero and announced plans to buy billions in mortgage and government bonds....buying which had been scheduled to end this year but now will stretch into 20-10. call made in chart talk the stock market takes a dive after the federal reserve releases interest rate decisions on wednesday we will take a look at the charts coming up next. the reaction from the stock market when s&p 500 and in the day down 1% and we came after the minute of the from reserve reaches decision. the fall to follow through and all through the day after. significant selling pressure for the eyes of the days and a loaf was a to% drop home wednesday after the federal reserve decision. on the question is are so is gonna be enthused by this taking money off the table in the trend is still in from march to july in the month of sep

government can do anything more efficiently than the private sector, well, just look at fannie mae, freddie mac and amtrak. we have to say no. this is part of obama's plan to make college education a freebie in the next few years. very nice but unaffordable. >> cradle to grave in college loans, are you for it or against it? >> we value higher education. we thought poor people should have access to it. so what did we do? we gave a bunch of money to the private sector to make student loans. they bundled them and traded them from chicago to wausau and made a mess of it. we're talking about cutting them out and giving the loan directly to the students that. is cutting out a couple layers of waste and fraud and is a net good. >> here is specifically what the president said talking to union activists last week "offering students a complete and competitive education from the cradle to the classroom from college through a career," the whole life of an individual, cradle to grave. >> i have a message for you quentin. the trouble with you and your socialist programs, whenever you see something big yo

fannie mae and freddie mac accounted for half of all home loans in the united states. as the subprime bubble burst and the housing market died, the unthinkable happened. these giant lenders were brought to their knees. it took government intervention to prop them up again. the poison was in the system. it meant massive losses for u.s. banks. the government let lehman brothers died. it decided to bail out the other corporations on a scale never seen before. >> after lehman brothers failed, banks around the world stopped lending almost overnight, and people stopped spending. from mexico to australia, governments stepped in. the u.s. announced a record stimulus package worth $937 billion. european governments also took action. china spend more than half a trillion dollars on the stimulus package of its own. >> the leaders of china were worried about unemployment, that the world lost its appetite for chinese-made goods. the stimulus package offered an alternative source of employment for migrant workers. massive infrastructure projects are now under way. some say it has be

six months later, they came to the rescue of fannie mae and freddie mac. when lehman started to crumble, the presumption was the u.s. government would step in and prevent a liquidation. nyu professor and financial historian richard sylla says regulators should have known they'd set up reasonable expectations for a lehman rescue. >> people were saying the government isn't going to let some really important financial institution fail and then it did. and i think that's made what was already a pretty serious financial crisis a much worse financial crisis. >> reporter: conventional wisdom on wall street is that lehman's demise fueled the meltdown that quickly engulfed credit and equity markets. but, today, some financial experts and academics are starting to doubt that wisdom. some believe even if lehman had been spared the financial crisis still would have occurred. john makin, an economist at the american enterprise institute, says if it wasn't lehman it would've been somebody else. >> it could've turned out differently, a different institution could have fa

let me talk about this, with fannie mae and freddie mac.thought that the subsidy was a bad idea. we believe that the liability is something to fear. by the summer of 2008, the political ideal was to lift the loan limit. what we do not realize is how long and to what degree to separate the public from the private role. fannie mae and freddie mac face criticism about being too high leverage with the portfolio and the underwriting stand. but with the class of the securitization in 2007, this meant that they were the only game in town for the housing market. we should not immediately change this as we are working out of the housing slump. as the housing market recovers and given that they are in a long time out -- we should start planning for the future and think about what role the government should play, if any, in providing liquidity to the mortgage market. i will go to my conclusion. with many of the fed programs that he mentioned, i worry that the government backing is seen as a free lunch. now is the time to eliminate the supporting role

tied 1-1. 84th minute, the pass to freddie monteiro, and scores. the game-winner. united just like in the u.s. open cup beaten by seattle 2-1. >>> it's time for our second break in the show. there is much more to come on geico sports extra, like tiger woods silencing the crowd and his competition at the vmw championship. don't go away. we're back in just mi  >> welcome back, third round of the bmw championship. all about tiger woods, began the day tied for the lead. the second shot on the par 5, the 9th hole, 270 yards out after hitting a 345-yard drive. the approach reaches the green and rolls for days, setting tiger up pera -- up for an eagle putt. we have more highlights to go. to the 49th hole, getting the right to left birdie putt, the drop here and 9-under 62. sets a course record. tiger is 16-under the leader by 7 strokes, heading into tomorrow's final round. >>> after a long rain delay, serena lliams and kim clijsters in took to the court for the u.s. open semi final. serena is down a set, called for a football to put her dow

. >> fannie mae and freddie mac always had t implicit guantee of the govement. now al of wall street as the implicit guarantee. if the govnment is behind you, they ought to regulate. ultimately, you and i are going to be held hostage paying the debt if it clapses, yes, we oht to regulate. >> ere has beeno pishment to tch them anything. >> it is not punishing worry about. what worry about is the risk in the future. we ought to doome other things that are sd and not -- >> we grudge-holding irish caolics like punishment. the president scrapslans for a missile defense systemn eastereurope. >> ourew defense aritecture in europe will provide stronger, smarter, as worcester defenses of america'forces and allies. -- and swifter defens of america's forc and allies. >> presidentobama says there are other ways to deal witthe threat iranian missiles. but the timing of the announcement, days before he meets the russian president makes some wder whether mr. obama isbargaining with the ruians. how does that look to you, evan >> the president is a conciliator and he likes to sp

it is then in may and freddie mac which had the implicit guarantee of the government.s never a free and independent enterprise. now all of wall street has the implicit guarantee. if the government is behind you, it is simply backing it, and it should regulate. ultimately, if you and i are going to be held hostage, paying off the debt if it collapses, yes, we should regulate. >> and there has been no time out, no punishment to teach them anything. >> it is not punishing that i worry about. i worry about risk in the future. i think we should do some of the things that are said and not allow the ideology -- >> we grudge old irish catholic- like punishment. so if the president stops plans for a missile shield system in eastern europe. >> the new missile defense architecture in europe will provide stronger, struck her, and swifter defenses of american forces and america's allies. >> is a pending plans to locate a ballistic missile in poland and the czech republic. the president says there better ways to deal with that threat. but the time is days before the russian presiden

>> no, because government doesn't learn, otherwise we wouldn't have fannie, freddie and medicare andentral in the '70's when the government took over conrail, and they had to lose a ton of money before they realized get it back in the private sector and deregulate the railroad industry. they are slow at learning. you think our students have a hard time. in washington, they never learn. it takes decade. welfare reform, it took 60 years to get that. >> steve, do you agree with him on this one? >> i try. it is like the military. is that a good expenditure. they keep blowing up all their toys and leaving dead bodies around but you got to consider the alternative. when the bush administration spent all this money -- jack, you're a young man. maybe you don't remember last november, but the world was spinning out of control. the banks were failing. people were running for the exits. they shored these companies up because what would it have meant if we went away. would it cost more than the $23 billion they're going to lose sni think the damage would have been far greater. >> look at what is

support from your office to assure that we have representatives from the treasury and fannie mae and freddie to go over those programs you reference, particularly the second look. >> a good use of your extra 20 seconds there. >> thank you. >> thank you, superintendent neiman. i'd like to return, secretary geithner, to a point you raised, and that is that the stress test are effectively the tool by which we have measured the strength of the 20 largest institutions and that's what gives you confidence both that we understand the risk of exposure on the toxic assets and the overall projections on how stable these institutions are. but the worst case scenario under the stress test for 2009 projected average unemployment for the year at 8.9%. current unemployment rate a 9.7%. average for the year has reached 9.7%. the panel has recommended under those circumstances the stress test be repeated for these financial institutions. does treasury plan to do that? >> i think there's an important thing to start with in looking at whether this was a conservative enough stress test and the measure of that i

fannie and freddie lapsed. merrill lynch had the same problem as lehman.oup had hundreds of billions, companies were in trouble, interbank market seize add year before. so already in the middle of a very severe crisis. lehman, everything okay is just non-sense, not understanding the difference between cause and affect. lehman was an effeaffect of the crisis not the cause. >> did allowing it to fail, though, give regulators the administration the political will, the panic to put in the tools -- to put into effect tools that would later be useful? >> yes. certainly why do i feel unconventional monitoring credit policies of the financial system were implemented, some of them before lehman, some of them after lehman. the support and back stopping of the financial is a commitment of $12 million resources, three already spent, capitalization, gaerns, insurance, you name it. many things occurred well before lehman. many occurred after lehman. >> do you feel better or worse than you did prelehman? i know at the time you said a depression was not an all together po

freddy garcia gets his first win of the season with the sox. it's funny, we're on labor day weekend, bird against garcia, the pitching match-ups were both out of baseball on memorial day weekend. garcia now, 7-2 lifetime against boston. >> texas's scott sellman, look at the rangers pitcher, more than 19 years to win seven straightaway from home. needs some offensive help. in the sixth. nelson cruise comes up big. his 31st home run of the season. he's got a hot bat going. four home runs, ten ribbies in the last six games. the rangers win their fourth straight game. and improve to 25-17 against the a.l. east. becomes the first rangers pitcher to reach 15 wins since kevin millwood, and padilla did it in 2006. >> crucial ten-game stretch coming for the rays. they get the tigers, yanks and red sox in succession, beginning with detroit. sixth inning, miguel can a barrera. initiating launch sequence, yeah. his 28th of the year. we're tied at 1. bottom 7, justin verlander and evan longoria with the 98 mile per hour heater. top nine, tie game, adam ever

part a lot of the problems came from the government themselves, fannie and freddie were way too big. they've been failed out financially and their market share's gone up from 33% in the first after of '06 to 70% now. they factor in nationalization of the housing. unfortunately the two agreements allowed and encouraged perhaps all of these off balance sheets. that has to stop. the fovs, spvs, securitization, bank's been forced to lend to people who were more unlikely to pay it back.. i agree, that regulation was disastrous. nonsense, you have to go back to basics and the systemic dismembering of the act, one by one, all the checks and balances, it's like a movement from democracy. all the checks and balances were dismantled. so you have to have the right regulation. so if you're proposing to have no regulations at all, then all the banks will blow themselves up again pretty quickly. >> jim, let me ask you a question -- >> i'm suggesting -- >> sure. >> jim, yeah, let me ask you a question. over my right shoulder is the old lehman brothers building. very reduced rate. and over my left s

in years like your lucky mood ring, a ticket to a christopher cross concert, your missing hamster, freddyd. the cool thing about mopeds is they're so easy to use, anybody can just hop right on and go. they practically drive themselves. woman: are you okay? [ xylophone playing ] isn't it too cold to play outside? [ music continues ] when he's done, he's gonna make a snow piano. [ music stops ] who says it has to be sad to spend new year's alone? [ woman laughing ] "sure, go back for seconds at the buffet! what could go wrong?" she says. yeah, sitting outside on a beautiful summer day -- it's a great way to clear your head. [ ennes revving ] man, last place -- if he's gonna make up time, he'd better take a shortcut. i am sitting here with sade and amber, both of whom have little brothers. do you enjoy having a little brother, amber? most of the time. i'm just glad he doesn't borrow my clothes. yeah, i could imagine you would be. sade, how about you? do you like your little brother? sure. do you like to know where he is all the time? not really. we have found that it's when you don't know wh

fannie mae, freddie mac, general motors, chrysler, all nationalized. you add that will all up, we are looking at 30% of the profit of the private sector in the united states now under the control of the federal government. and that's nationalized. on top of it, there's an attempt right here h.r. 3200, the senate version that speaks to nationalizing eventually another 17.5% of our economy. when you round that out, it becomes 48% of the private sector nationalized by the federal government. and when the private sector is nationalized, the freedom of the american people is diminished. that is what is going on, mr. speaker and the president has said health care costs too much and we have to fix an economy that is in economic crisis and can't fix the economy unless we first fix health care, because health care costs too much money at 14.5% of our gross domestic product. the average of the industrialized world is $9.5% of their g.d.p. we don't know if they are comparing apples to apples because there are many nationalization that has taken place in those cou

ring after rescues no carrier fannie mae and ring no carrier ring freddie mac and no carri bear stearns, the federal government decided it ring would not bail out no carrier ring lehman. the ring no carrier collapse set off a catastrophic chain of events. credit locked up the unemployment rate doubled to > nearly ring 10%, and financial no carrier markets tanked. >> frankly, people were no carrier frightened. we had never seen anything like ring no carrier ring that. >> reporter: the president is expected to use no carrier lehman brothers as a prime example of ring why no banks need tighter government ring regulations. he's urged congress to pass legislation for months. today he's expected to tell them stop stalling and ring get it no cdone. the president will also talk about the steps ri his no carrier administration has taken ring to stabilize the volatile economy. >> ri i've no carrier essentially taken the program that was ring voted on no carrier by ring the previous congress no carrier supported by the previous republican president, and we've made it work. >> reporter: but making

deregulation, correct me if i'm wrong, but as recently as last year, congress was telling fannie and freddie to make more cheap loans available to more people. so to turn around and called the -- call the problem a result of deregulation is ridiculous. political interference, in an attempt to stave it off, is making it worse. the recession has happened anyway, but as a result of this borrowing, children and grandchildren will pay off our debts for years to come. neil: thank you very much. always good to have you. daniel hannan. and now, do you call the health insurance plan a tax hike? the president says no. >> merriam webster's dictionary calls a tax a penalty imposed on people for funding. your critics call it a tax increase. >> my critics say everything is a tax increase. we can have a debate about whether or not we will have a mandate for individuals or not, but absolutely reject that notion. neil: that was an excellent interview, regardless of your views on this subject. is it or is it not a tax? our guest says it is not. good to have you back. >> good to be back. the greatest generatio

mortgage company freddie mac says an average rate of a 30-year fixed rate, 5.04%, but the 15-year, 4.46%. that's the lowest for the 15-year since records were kept. >>> it's going to feel long if you're traveling to washington, right, bob? >> if you're a congressman trying to get to your beach house, it's going to be a little slow going for you later this afternoon. the rain is out there. here's maryland, you can see pennsylvania right there, mason-dixon line. rains dreirectly overhead. washington, rain over there. so far no delays. but i think you'll catch it this morning and a little bit later on. more delays in boston and new york city. it's a gusty new york wind today. gusting atd 25 miles an hour in boston today, watch for that. showers and thunderstorms in denver, st. louis and cincinnati, look for a 30 minute to one-hour delay there. >>> they say they found steroids in something they shouldn't have. paying $8 a day for lunch can add up fast. so i'm packing my own lunch now-- for less than $3. thanks to walmart. just two times a week saves my family over $500 a year. save money. li

the kool-aid down now, we proved congressman frank was not telling the truth about fannie mae and freddieofed it. big difference. how about our website. billoreilly.com. www.foxnews.com/oreilly. talking points memo. each evening, posted on our fox news website. and then please email us with pithy comments from anywhere in the world. oreilly@foxnews.com. name and town, name and town if you wish to opine. here's the word of the day. when writing to us please do not be diabolical. you think you know what that means, don't you? you think you know. but you really don't. you got to look it up. don't be diabolical when writing to "factor." the factor continues 24-7 on billoreilly.com. greatest website. got to check it out. greatest website. got to check it out.

if you have a stranger knocking on doors, in my be a representative from freddie mac.are now going door to door to try to help deliver borrowers in danger of losing their homes through foreclosure. the home fizzes will be focused on people that have not return letters or phone calls -- the home visits will be focused on people who of not return letters or phone calls. that is your business news. live at bloomberg headquters in new york, i am linda bell. >> it was good to see you in person yesterday. thank you for stopping by the office. >> it was wonderful to me you all. >> we will see you again next hour. >>> 5:27. >> still ahead, a double attack on a local student. >> it makes me feel said. i thought all these people were actually my friends. >> the victim talks about the attack. it was later posted on facebook. >> a fire makes for a dangerous situation for firefighters. i will have the story coming up. >> adam caskey live in the weather center. upper level ring ring ring rg. hey, your chicken noodles ringing. ring ring. progresso. hi, may i speak to my oggy please?