now you heard that right forget the white picket fence that fannie mae and freddie mac. used to provide the american dream is quickly turning into an american nightmare so what is it that caused the system to fail. from the middle west to the mideast and even up through greece the world rebellion seems to be spreading but will politics ever close the gap. and turning profit from protests does money trunk morals when it comes to public relations. good evening it's monday march seventh four pm here in washington d.c. i'm lucy catherine of fans you're watching our t.v. now when it comes to the american dream visions of the white picket fences are front and center but for decades those fences have been propped up by the government's largely through fannie mae and freddie mac. of course since taking on these enterprises in the wake of the housing crisis the federal government has now started back in ninety percent of u.s. mortgages but with new proposals on the table from the obama administration the message seems clear and it's not a good one apparently this country can no l

no fannie and freddie in their gse form. the huge losses and the consequent government taxpayer bailout has brought this to everybody is attention. at a deep level, we note the presence of these gse forms is consistently distorted credit at credit pricing and house pricing and it is trying to transition away from this demonstrably unsuccessful form but as we know, they represent half of all mortgages outstanding and a good bit more than half of current production. it has to be a transition. we suggested should be a five- year transition in which fannie and freddie continue to operate on a declining basis, at the end of five years their charters would be revoked and would sunset and there would be a privatization of their ongoing business assets and a liquidation of their old government guaranteed debt and mortgage-backed securities guarantees. as we all really knew all along, the so-called implicit guarantee was a real guarantee and all of us are paying for that now. what would this five year transition look like? there woul

fannie and freddie dealt both with multifamily. my colleague from georgia referenced that and single family. as you look at the losses, were the losses equally distributed between the family activity or single activity or more than one over the other? >> i have to respond carefully in writing to you in that question, but my impression is that the losses are concentrated in single family. >> that's my impression too. i disco think that's very important because as we tighten up in the single family area, i do not want -- i hope that will not lead, and this has been, yes, i'm quoting the past to be stronger about my support, i may not have been explicit, but i hope out of whatever proposal the administration comes forward and ultimately passes to the congress, there will be some effort to do what we do not home loan banks. the home loan banks since the great 80s have been empowered to make mortgage decisions based on business decisions and a fairly amount goes to affordable rental housing so you don't pollute the basic business decisi

that their way of that was just a sense you heard that right the white picket fence fannie mae and freddie mac. used to provide the american dream is quickly turning into the american nightmare so what is the cause the system to fail. from the midwest to the mid east and even up through greece the world a billion seems to be spreading but will politics ever close the gap. and the fog of war has settled over the on going on rest in libya have reporters for exciting pictures played up the on rest in the name of a hot story. good evening it's monday march seventh eight pm here in washington d.c. i'm lucy catherine up and you're watching our t.v. and when it comes to the american dream visions of the white picket fences are front and center but for decades those fences have been propped up by the government largely through fannie mae and freddie mac. and since taking over these i'm just rises in the wake of the housing crisis the federal government is now grappling ninety percent of us mortgages but with new proposals from the obama administration the message by obama seems to be clear and tha

way it was just a silence well you heard that right forget the white picket fence that fannie and freddie mae used to be able to provide the american dream is quickly turning into the american nightmare and so what caused the system to fail. from the midwest to the mid east and even up through greece but world rebellion seems to be spreading but will politics ever close the gap. and the fog of war has settled over the ongoing unrest in libya and reporters eager for exciting pictures played out the unrest in the name of a hot story. well it's monday march seventh five pm here in washington d.c. i'm lucy casanova you're watching our t.v. and when it comes to the american dream visions of the white picket fence are front and center but for decades those fences have been propped up by the government largely through fannie mae and freddie mac. now since taking these enterprises over in the wake of the housing crisis the federal government is now backing the ninety percent of u.s. mortgages but with new proposals on the table by the obama administration the message seems clear but this country

no fannie and freddie loans in commercial. certainly fannie and freddie need research project need reform, but this idea that they are the center of the crisis is ideologically driven. they deserve some of the banks, as do banks, regulators, and even consumers. i will leave it at that. i want to leave question -- i want to ask some questions about covered bonds. something i care about. we have to get private capital back into private finance. covered bonds work in europe but we do not have a statutory framework that provides security -- security result -- regarding their treatment. there was a bill introduced in the house that i am considering introducing in the senate on covered bonds. secretary geithner, you mentioned to you are willing to work with congress exploring a legislative framework for covered bonds. what you think of the legislation in the house? the fdic has argued that covered bonds could put the deposit insurance fund at some increased risk, but i cannot see how they are different from any other secured obligat

in 2003, i didn't think and freddie needed reform. in 2005, the chairman joined in chairman mr. oxley and passing a bill, which was derided as insufficient and senate republicans rejected the house republican bill. in 2007, the democrats a majority to the bill, which mr. wallace then said with a very good bill and that bill which led them to be putting into conservatorship. but then go back to john and from illinois. the republicans press for reform and they were unable to achieve it. when they're able to achieve if they don't press for her. they were in power from 1995 to 2006 and passed a bill in the house, which mr. wallace and president of the united states drive isn't sufficient. lasher they pushed hard for a bill we were told was the answer in this year it appears they're now waiting for the administration. the gentleman from illinois said the administration has avoided the tough choice is. if that's the case, resembles the republican who are making tough choices either. what is stopping them? the fact is that n-november it became clear to republicans who had controlled th

the key difference between fannie and freddie and what we want in the future is that fannie and freddiehad an implicit guarantee which meant they didn't pay for it. they were similarly capitalized because -- [inaudible] [audio difficulty] so they met exactly the level they were told to survive. but it wasn't enough. but these should be much more highly capitalized entities, and they should have a responsibility to the investors to pay for the government guarantee. that will create an accumulated reserve fund -- reserve fund that were these entities to fail, there would still be a way of protecting the fakiers because -- taxpayers. and were in the future that reserve to run low, you can charge more for the guarantee to fill back up like the fdic does and other things. that would give us the benefits of a guarantee. it should be targeted at the middle class. it doesn't need to be a jumbo market, but we can gradually move that down. that gives us the benefits of the old system without giving up -- and avoiding the problems that we've seen. >> alex, there was a relatively positive nod of yo

we wind down fannie and freddie as you suggest. as i look at options 3, there are more tools in that framework to influence the markets and provide some relief when necessary. government reinsurance would only apply to certain mortgage-backed securities that comply with a very strict underwriting standards. that would offer a greater incentive to get the type of product we would approve of and that would be sound especially when looking at what happened in previous crises when you have standard and poor's and aaa on everything. if you have those requirements on underwriting. that would stabilize the market. as well, i think having the loss allocation placed on these private guarantors' also provides that first risk absorbers by the private sector instead of the government. i know there are some constituencies out there such as the banking industry, such as the housing industry, that want to have as many products get reinsurance as possible. these private guarantors' will want to have the backstop as close as they could so that thei

at least as a with regard to t federal obligations represented by fannie mae and freddie mac. in a january 2010 cbo report, it was concled that fannie mae and freddie mac have effectively become government entities in the way that they arenow managed. and their operations should be included in the federal budget. do you agree with that cbo report in that context, in the context -- in other words, whether the debt oblations of fannie mae and freddie mac should be included in our federal budget? >> well, i'm not an accountant and i defer to those with better knowledge on that point, but i would justay that if you do that, of course, you would add the debt to the federal debt, but you would also have to offset that to some extent with the assets that the fannie and freddie holds. so whether you consolidate or whether you simply take as a charge the obligations that the government has to support fannie and freddie, you would still have the same net effect on the government's fiscal position overall. >> at a minimum it seems to me we ought to acknowledge the taxpayer is on the hook

home mortgages in their portfolios doing away with fannie and freddie could amount to massive losses for these investors and for u.s. clout especially when you consider economists say shoring up foreign investment was a major reason for fannie and freddie's bailout in the first place but america appears unable to afford another option in the face of such massive failure i believe the banks would make and. i think their need for it got out of control they took ridiculous amounts of rest which they didn't properly disclose to the federal government to their regulators or to their investors who were significantly slammed by their misadventure and misadventure coming at the cost of the american dream i'll be an apartment somewhere i would i want to be able to buy another home somewhere else that so many americans and the police world audit you lauren lyster r.t. new york. and so what will the new america than the one where everybody doesn't own a home look like as the government says a very on a wind down fannie and freddie quit something take their place or is the american dream over jo

thousands of americans have achieved hope achieved homeownership with the help of fannie mae and freddie mac. but since taking over the agencies in the wake of the housing crisis the federal government is now overseeing ninety percent of new mortgages but cannot continue when the u.s. is saddled with enormous debt archies lauren lyster ask is the american dream is dying for the middle class. the american dream. to be everybody home and provide for your family i so we spoke about the way picket fence it's that traditional vision of homeownership central to living the dream so many people we live in the suburbs which is turned into a nightmare for millions of americans who've lost their homes to. or closure or are facing it now people like retired corrections officers entre she didn't want to show her face because of this it's a horrible feeling to be facing foreclosure you have a family having children we try to keep things stabilized but she feels helpless in the fight against losing their home i think she's in because of a dispute with the banks over the terms of her adjustable rate mor

the key difference between fannie and freddie and what we want in the future is that fannie and freddiehad an implicit guarantee which meant they didn't pay for it. they were similarly capitalized because -- [inaudible] [audio difficulty] so they met exactly the level they were told to survive. but it wasn't enough. but these should be much more highly capitalized entities, and they should have a responsibility to the investors to pay for the government guarantee. that will create an accumulated reserve fund -- reserve fund that were these entities to fail, there would still be a way of protecting the fakiers because -- taxpayers. and were in the future that reserve to run low, you can charge more for the guarantee to fill back up like the fdic does and other things. that would give us the benefits of a guarantee. it should be targeted at the middle class. it doesn't need to be a jumbo market, but we can gradually move that down. that gives us the benefits of the old system without giving up -- and avoiding the problems that we've seen. >> alex, there was a relatively positive nod of yo

the key difference between fannie and freddie and what we want in the future is that fannie and freddiehad an implicit guarantee which meant they didn't pay for it. they were similarly capitalized because -- [inaudible] [aio difficulty] so they met exactly the level they were told to survive. but it wasn't enough. but these should be much more highly capitalized entities, and they should have a responsibility to the investors to pay for the government guarantee. that will create an accumulated reserve fund -- reserve fund that were these entities to fail, there would still be a way of protecting the fakiers because -- taxpayers. and were in the future that reserve to run low, you can charge more for the guarantee to fillack up like the fdic does and other things. that would give us the benefits of a guarantee. it should be targeted at the middle class. it doesn't need tobe a jumbo market, but we can gradually move that down. that gives us the benefits of the old system without giving up -- and avoiding the problems that we've seen. >> alex, there was a relatively positive nod of your he

mae and freddie mac to end? >> without the legislation to allow us to want them down definitively, there is a substantial risk. the only option is that they be free created -- be recreated, recapitalized, and reprivatized. if we do not legislate, they will be created in a different form. >> over what timeframes should the end -- they end? >> it depends on how successful we are in bringing private capital back again. >> this is a five-year to seven- year period of time. it could be longer or shorter. >> how do we benefit from -- there are a number of databases and other kinds of things that have value. there are also new are-legacy loans that have more value. how do we make sure the government benefits from that? >> there are a lot of very talented people with a lot of experience. there is a lot of intellectual property value in those systems. we have a variety of ways to make sure the government debt -- the government maximizes the benefit from that. that is a very important question. >> i know my time is up. we

first of all, before i go to countrywide let me say about fannie and freddie.irst of all, let me tell you the business i'm in. today what i do is assemble constitutional capital and invest it in middle incomed housing and i've done that since the year 2000. we built about 7,000 homes across the country in 12 states, about $2 billion worth of housing value. very focused on the middle man in the city. so it's a little bit exempt from the crisis because that tends to be suburban large track homes. i say that because auas i -- as i return to the housing field, in 2000 and started this company, which is what i want to do the rest of my life, i was asked to go on fannie's advisory board, which is not the governing body and which is not compensated. but it gives you a kind of insight into the way fannie and freddie operate which i'd known from a distance being the head of the oversight body, but not as a filter. so i'm at a meeting about 2002 and frank rains is making a presentation on the efficacy of subprime. in effect, he had a white paper done by, you know, ph.d.

let me go to fannie and freddie. all of the options say that fannie and freddie and.ight now, they are under conservatorship. what caused them to -- cause them to end? who owns them today? >> the fhha owns those responsibilities and judgments. they said they would be recreated in a somewhat different form, recapitalized and privatize. we don't believe is an essential pass for the government to take path for an essential the government to take. >> what time frame will it end? >> it depends, but i think that our sense is that a realistic expectation is that this is a five-seven year period of time. >> how do we benefit from the numbers of databases and other kinds of things that have value? there are legacy loans that have value. how do we make sure that the federal government benefits from that value? >> there are a lot of systems and a lot of intellectual property. there are a variety of ways to make sure that the government recognizes the benefits. a very important question. >> i notice my time is up, and i might ask one more question. on the debt issue, this is off-

that's the american dream that should change but if we privatized if we get rid of fannie mae and freddie macwhich and we don't have the government's basically financing the purchase of homes that doesn't mean that people are going to be able to buy homes it doesn't mean that the rates are mortgages are going to go skyrocketing high what it means is that it's going to be a little bit more expensive to buy a home and it means that you're not going to buy a home until you can afford to buy a home and during the housing bubble we didn't see homeownership rates rise we just saw a really cheap kweisi i rent because the homeownership rates are now where they were in the ninety in the one nine hundred ninety s. all those people who did buy homes who thought that they had become homeowners that have now lost their homes they don't have any equity and so they're put into their homes they didn't really ever own their homes and so simply by getting rid of fannie mae and freddie mac. what we do is we say when you actually buy a home you're really going to be a homeowner you can actually achieve that

why should we have -- from frannie and freddie -- from fannie and freddie. >> as with the capital injection programs and the like, it was set up to be paid back. given the government preferred stock and by having a dividend, of course, as you know, fannie and freddie had is still required injections of money. they have not made any significant progress at paid it back. as -- at paying it back. >> if you go to the market, if and is our 30 cents a pound, nobody winces. everybody buys more onions print everybody thinks the prices are going up. your predecessor testified that the cpi overstates the inflation rate by three-quarters of one point, perhaps a point, or even more. do you think that is a growth analysis or does the cpi best reflect inflation given quality improvements in other products? >> you are correct. the professional economists, including the ones at the bureau of labor statistics, conclude that the cpi probably does overstate actual inflation, although they have made progress in addressing some of the issues that were identified a year ago. that being said, we understand the vi

year so we'll take a closer look at the new housing market and the dying roles of fannie mae and freddie mac. and some states are pushing for new regulations on voters details on what some voters are now going to have to show in the upcoming elections and i will ask if this is a sign of a republican war on voters in america we'll get to the bottom of that issue and a lot more in tonight's show but first let's move on to our top story. libya's future remains up in the air as violence and unrest persist and as pressure for some kind of u.s. reaction is ratcheted up rebel leaders continue to ask for assistance in the form

why should we have -- from frannie and freddie -- from fannie and freddie. >> as with the capital injection programs and the like, it was set up to be paid back. given the government preferred stock and by having a dividend, of course, as you know, fannie and freddie had is still required injections of money. they have not made any significant progress at paid it back. as -- at paying it back. >> if you go to the market, if and is our 30 cents a pound, nobody winces. everybody buys more onions print everybody thinks the prices are going up. your predecessor testified that the cpi overstates the inflation rate by three-quarters of one point, perhaps a point, or even more. do you think that is a growth analysis or does the cpi best reflect inflation given quality improvements in other products? >> you are correct. the professional economists, including the ones at the bureau of labor statistics, conclude that the cpi probably does overstate actual inflation, although they have made progress in addressing some of the issues that were identified a year ago. that being said, we understand the vi

a panel of experts on the future of fannie mae and freddie mac. friday night on c-span, bloggers, writers, and activists from the middle east discussed their countries. they talk about changing the political system in egypt, iraq, iran, and saudi arabia. >> iran is really bad. this is one side of the coin. the other side is the darkest side. we lived in a very dark area. our studies have never been heard. we are very strong in terms of oil. we support the west with the oil. it is the homeland of is long. >> what's the summit from york city on friday night on c-span. -- what the summit from new york city finite on c-span. >> nearly 1500 middle and high school students entered documentaries on the famed "washington d.c. through our lance." on c- the winning videos span and meet the videos -- and meet the students who created them. >> next, a discussion on public education was sacramento mayor kevin johnson and former washington, d.c. schools chancellor michelle rhee. mr. johnson heads the education department's mayor advisory council. after leading

in effect, the bailout of fannie mae and freddie mac permitted t.a.r.p. recipients to monetize their gse guaranteed prices above what they would have received without the guarantees and used the proceeds to pay their obligations outstanding and under t.a.r.p.. there by arguably shifting a greater portion of the t.a.r.p. from the recipients themselves, to the taxpayers. costs such as this should be thoroughly considered when evaluating the t.a.r.p. after reflecting upon the analysis conducted by the panel, its individual members and panel staff over the past two years, it is all but clear that the success or failure of the t.a.r.p. remains an open question, and that neither a favorable adjustment to the subsidy rate, nor repayment of the t.a.r.p. funds buy some recipients tells the entire story. it is critical to note although t.a.r.p. played a need for role in the rescue of the u.s. economy, during the closing days of 2008, its enduring legacy may have been to codify the guarantees of the too big to fail, notwithstanding the moral hazard risk arising from

under the old no five he said don't know you jerry went to fannie mae and freddie macand my letter sent me a recent history of the problem is that the reality is we're not able to propose legislation because i already party and when he was in the minority party the time could not put legislation out there without the majority is concerned so they were not able to deal with us in the way that they should have but to get back to the real question of why people haven't gone to jail is that recklessness isn't illegal in our country we have this idea that the market would take care of itself because doing something as stupid as taking the economy and that would hurt you so badly to be something that would check it so that people wouldn't want to do that but when we put the incentives on these kind of short term gains for people who are rewarded for how many loans they get out not how many good loans they get parties thank you very much. the big picture for me on this is i miss ronald reagan. when he s. and l. crisis he put over two thousand baxter's. and and i think both parties should do wh

you read voted to repeal glass steagall and he's correct this one the reasons why fannie mae and freddie mac. were able to enable these banks to write all the bad paper for instance that's why it's true yes or brock obama did inherit this horrible economy because what it was be cui to him by both parties on both in both chambers let you know the state how do we do it when you leave the homosexual i also like this as far as the whole penny may freddie mac. the issue here because even back in two thousand and five george bush said we have to start reforming what's going on. you know racism. and i was going to go out to deal with this and barney frank had been standing there waiting in line even then and one video no five he said i don't know if you agree with to fannie mae and freddie mac. my accent was not to say of any problem is that the reality you want to be able to propose legislation because i already party have been when he was in the minority party time could not put legislation out there without the majorities concept so they were not able to deal with that in the way that they s

in effect, the bailout of fannie mae and freddie mac prevented tarp recipients to monetize what they would have received and use the proceeds to pay that which was outstanding. costs such as this should be thoughtfully considered when evaluated need tarp. -- when evaluating the tarp. it is also clear that the success or failure of the tarp remains an open question. neither a favorable adjustment to the cbo subsidy rate nor the repayment of the top funds by some recipients tells the entire story. it is critical to note that all of the tarp play a meaningful role in the u.s. economy. its enduring legacy may have been to codify the implicit guarantee of the too-big-to- fail. the tar, in essence, reinforced the bubble bailout cycle as the government's preferred business cycle. along these lines, "the government's actions in rescuing a ig continues to have a poisonous effect on the marketplace by providing a complete rescue that called for no shared sacrifice among aig's creditors. the federal reserve and treasury fundamentally changed the relationship between the government and the count

most of the benefit went to fannie and freddie shareholders and executives. do you agree with the results of those studies? >> i do. >> as the value of government guarantees for mortgage-backed securities been overstated by some, and probably me here? >> in the context of fannie and freddie, and the support that the government provides, you are right to say that most of the benefits of those guarantees did not go to the purported beneficiaries. that would be something you would want to make sure you avoided in the future if you are going to preserve any role for guarantees. and there are ways to do that, senator. they are not beyond our capacity to get right. >> i hope we can. if your socializing the risk and privatizing the profits to shareholders, we have a bad situation. >> exactly, and we would not recreating a system in which private shareholders were able to benefit from a guaranteed designed to help make sure that homeowners have more affordable housing. and that an economy like ours can survive risk factors. >> is the issue -- is it your desire to not

the failures of fannie and freddie are bipartisan.the house of representatives passed a bill through this committee under republican leadership that would have prevented this crisis. it was on the other side of the capital where others blocked it. if we go bad bank the good bank, the profits belong to someone else rather than those profits being used to pay, doesn't make sense to make sure both operations are profitable, -- ? >> i agree. >> things. -- thank you. >> you talked about the continuing winding down of fannie and freddie. some will be selling in the marketplace. does this mean we will sell off 10% of fannie and freddie in the marketplace? >> i cannot tell you precisely. i can say that based on the experience so far, the market has been able to absorb it at that pace. you cannot be certain how the market is going to evolve in the future. >> some of the interest rates will be sold off as a profit? >> i can say for the treasury portfolio, that would be the case. >> in terms of the three options of where we go in the future, i a

let me go to fannie and freddie. all of your options say that they end.ight now they are under conservatorship. what occurs for them to end? what occurs for them to end?

in effect, the bailout of fannie mae and freddie mac permitted t.a.r.p. recipients to monetize their gse guaranteed prices above what they would have received without the guarantees and used the proceeds to pay their obligations outstanding and under t.a.r.p.. there by arguably shifting a greater portion of the t.a.r.p. from the recipients themselves, to the taxpayers. costs such as this should be thoroughly considered when evaluating the t.a.r.p. after reflecting upon the analysis conducted by the panel, its individual members and panel staff over the past two years, it is all but clear that the success or failure of the t.a.r.p. remains an open question, and that neither a favorable adjustment to the subsidy rate, nor repayment of the t.a.r.p. funds buy some recipients tells the entire story. it is critical to note although t.a.r.p. played a need for role in the rescue of the u.s. economy, during the closing days of 2008, its enduring legacy may have been to codify the guarantees of the too big to fail, notwithstanding the moral hazard risk arising from

it seems everyone's on the same side when it comes to overhauling mortgage giants fannie mae and freddie mac. tonight's commentator thinks it's important when and how those changes are made. he's richard dekaser, economist at the parthenon group. >> the obama administration recently announced plans to reform the mortgage market and shut down bankrupt fannie mae and freddie mac. the proposal reduces the governments role in mortgage finance, and has been warmly received by republicans. but if adopted too soon or implemented too quickly, it may cut short our tentative housing recovery. after bumping along the bottom for the past two years, home sales have only recently improved without the support of generous tax incentives, and continuing this momentum is critical to the broader economic recovery. rising house prices will lift wealth and spending while also trimming bank losses and encouraging lending. and since the government now insures or guarantees practically every mortgage originated, a hasty government pullback presents serious risks. the administration acknowledges the need to go s

>> again, not to fannie mae and freddie mac -- >> what do you think? >> in our view, this is very much a question for the financial stability oversight committee. as you have noted, this situation involves various financial market participants as well as regulators, and we believe this is something that should be a question for them. >> what is the fed's view of this? >> this is not an area of my expertise in. >> fair enough. it sounds like no one is saying -- with the exception ofmr. lawler because his client has unlimited checks from treasury, that the answer is simply on certain. let me ask one final question. if you had to do this all over again and you were back in 2008, would you do anything differently? would you have different programs? what would you tweak in some way? mr. cave? >> from our perspective the tlgp program has been a success and has done what it was intended to do, on locking credit markets. what was happening prior to the crisishere the balance sheet liabilities were getting shorter, funding was getting more complicated, and so,

the loans fannie mae and freddie mac are buying are so bad.le, four months ago a lender came to me to get documents and was telling me to hurry up and that we had to get this. it had four loans with no payments to be made. there were no payments scheduled for these loans. i found out that my own personal home mortgage had been sold to freddie mac. this problem is not being fixed. everyone is drowning. guest: that is exactly what we just talked about. there is a policy that emanates from washington, d.c. that says to be aggressive and saturate the market place with currency to buy homes, pushing servicers to engage in these abhorrent practices. i think that that is a fair question that the person brings up. what responsibility, what role do fannie mae and freddie mac have in this discussion? these folks we are talking to were simply servicing the notes. obviously, in certain instances that was done in a fashion that was problematic. this process through the folks that own the paper to the servicers and, ultimately, the consumer, we need to look

fannie and freddie. mr. frank: i take back my time. understand the difference, directed and allowed. fannie mae and freddie mac never originated a loan. they could not have directed anybody to do anything. they were the secondary market. fannie mae and freddie mac could only get into action if some private entity made the loan in the first place. and beyond that, during the period when we had the increased subprime loans which some of us were trying to ban, fannie mae and freddie mac were a declining percentage. but i'll yield again to the gentleman to tell me who directed the private sector to make these loans. >> i appreciate that. it was an encouragement that happened and it was allowed. we're talking about regulation -- mr. frank: i take back my time. we're here in the house of representatives making policy. you've got to be precise, i would say to members, about what you say. directing and allowed are two very different things. it is one thing to allow it. by the way, when you were talking from the perspective of the private secto

i'm not sure that on a net basis you're going to collect anything from fannie and freddie. why do you -- why should we have a 10% payment that we're receiving from fannie and freddie? >> well, as with the capital injection programs and the like, it was set up to be paid back. via giving the government preferred stock and by having a dividend. of course, as you know, fannie and freddie have been requiring injections of money and they have not made any significant progress in paying it back. as to my colleague saying that -- >> as to my colleague saying they believe there is higher inflation, that's because if you go to the market lettuce is $1.59 a head you notice that. if onions are down to 59 cents a pound, you buy a few more and don't worry about it. it's been suggested that the c.p.i. overstates the inflation rate by .75 or a point or even more. do you think that's correct or does the c.p.i. best reflect inflation given quality imprumets in a lot of our products? >> you're correct that the professional economists who have, including the ones at the bue roar of labor and

why shoulde have -- from frannie and freddie -- from fannie and freddie. >> as with the capital injection programs and the like, it was set up to be paid back. given the government preferred stock and by having a dividend, of course, as you know, fannie and freddie had is still required injections of money. they have not made any significant progress at paid it back. as -- at paying it back. >> if you go to the market, if and is our 30 cents a pound, nobody winces. everybody buysore onions print everybody thinks the prices are going up. your predecessor testified that the cpi overstates the inflation rate by three-quarters of one point, perhaps a point, or even more. do you think that is a growth analysis or does the cpi best reflect inflation given quality improvements in other products? >> you are correct. the professional economists, includin the ones at the bureau of labor statistics, conclude that the cpi probably does overstate actual inflation, although they have made progress in addressing some of the issues that were identified a year ago. that being said, we understand the visib

i would mention that after the freddie's massacre, there was a story in the "times" i remember vividly with the headline, sharpton buoyant in the storm. we head jesse jackson's love child. now, the double-standards there are pretty vivid. i think if ralph reed had fathered a child out of wedlock and used his organizations funds to support her, that would probably be bannered on the front payment of the paper -- front page of the paper. instead, jesse jackson's similar transgression and actions were buried on page 27 in a single column. obama, the "times" has been in bed with him since the beginning. they delayed for an entire year stories about his relationship with the reverend jeremiah write they should have gone into and they were shamed into it. abc news got a video of wright, and only after that the writer started write about what wright was all about. they also allowed obama to get away with minimizing his relationship to the former weather terrorist -- former member of the weatherman, bill ayers. david axlerod said he was somebody he knew from the neighborhood. in fact they had

his first at bat, second, third, giants second baseman freddie sanchez. how about the giants' backup catcher, had a memorable home run against none other than roy holiday, eli white size. [applause] in game four, he hit a home run, and that pretty much did the rangers in. he is the capture of the giants. buster posey. [applause] how about giants infielder ryan rohlinger? ryan. in game four of the national championship series, this was one of the great post-season games ever played in major- league history and one of the great games of this post season. he cut down the phillies' carlos ruiz with an incredible grow, outfielder aaron rowand. [applause] i do not think any giants fan is ever going to forget that night. rockets were in san francisco. gimenez were on the mound, and his mad-to help win a critical game, outfielder darren ford. ladies and gentlemen, i have only one phrase for the next giants player -- the beard. brian wilson. [applause] fear teh beard. how about the youngest left- handed pitcher in the history of the world series. eight shut up ser

freddie mac within two years. failure that were some market commentators and the serious problems unaddressed. wisconsin gov. scott walker is set to unveil the rest of his plan today for dealing with the state's budget. this is video from protesters yesterday he is quickly becoming the darling of republicans across the country for his plan to take away most collective bargaining rights for public workers. the rest of his plan includes a teacup for schools and governments. \, spread two issues here at home, and jerry brown is altering his proposal to realign certain state and local government responsibilities after criticism from local law- enforcement authorities. the state should continue to oversee more dangerous parolees rather than having them placed in county jails. pushing some law-enforcement related functions to local government is one way he sought to save money. stocks sharply higher on monday the s&p rose seven parents, the down 96, the nasdaq rose one. . intel says it completed its purchase of securiti

the white house is calling for an overhaul of fannie mae and freddy mac.hey guarantee or own half of all mortgages in the united states and it nearly collapsed in 2008. the treasury secretary goes before a house committee tomorrow asking congress to approve the overhaul. >>> temperatures dropping into the 30s and 40s. however the big story is the wet weather. expected to set in tomorrow. details and the timing coming up. this is your captain speaking, we are fourteenth in line for take off. beep, beep, beep. looks like its bumper to bumper on the interstate. i gotta get to cleveland! should have skipped that second soda. remove your belt, your watch, your shoes. i wonder what gas costs today. seven dollars for a pillow! an extra bag costs what? i hate traffic! (train child) the train is now arriving. (announcer) the train has arrived indeed. amtrack. enjoy the journey. >>> i am going to start riding my bike. >> reaction to the latest hikes is at the pump. edging up over $4 a gallon. gasoline is now at least 23% more expensive than a year ago. it is not the

the demise of fannie and freddie could have been prevented at -- had the committee acted sooner. unfortunately, the gse's were a powerful political force right up until the time that they collapsed. fannie and freddie's disproportionate influence on this committee and congress ultimately cost the taxpayers billions and should be long remembered as a major major policy mistake. finally mr. chairman i would like to take a moment to discuss and recent news reports about a proposal that has been described as a quote global mortgage servicing settlement. based on the facts reported i have serious concerns not only about the substance of the proposal but also about the process. what is occurring appears to be nothing less than a regulatory shake down by the new bureau of consumer financial protection, the fdic, the federal reserve and certain attorneys general and administration led by elizabeth warren. the proposed settlement appears to be an attempt to advance the administration's political agenda rather than an effort to help homeowners who were harmed by services actual conduct. ju