in addition we added fwlexability to fannie mae and freddie mac to do refinancing. 2.7 million households have refinanced since the announcement of those flexibilitis. we have additional funding supporting cap base of fannie and freddie to insure market stability. treasury and federal reserve purchases of mortgage-backeds are insuring liquidity in the market. together with fha and fannie and freddie, fannie, freddie and fha are providing the only mortgage financing effectively we have in the country today. without the government initiatives from fha, and in support for fannie and freddie we would not see mortgage financing occurring so there has been an enormous amount of energy focused on intervention in the home finance system, to give people a way of staying in their homes or refinancing of having affordability. we can doetter. we can do more. we need to do more. but let'sen the lens a little bit. >> thank you. i appreciate the obsarvation. i know much is being done but again i report wanted to report back what i heard in five weeks in the district and just remind all of us that many o

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. o 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 instanc

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 retailers a

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

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

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

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

>> 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

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 you wa

>> 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

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

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

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

. >> 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

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 listening t

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

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

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

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

the community reinvestment act, fannie mae and freddie mac, acorn asserting themselves as a broker in the mid of this and brokering bad loans in bad neighborhoods, intimidating bankers to give those loans and then passing those along in the secondary market and getting blocks of loans from the lending institutions for them to underwrite themselves and give the authority on loans that would be approved. . mr. akin: we'll pay acorn to do a lot of these activities. we has become an interesting topic where we see enterprising people coming in and checking out what the story was in these different acorn locations. mr. king: as you mentioned, an acorn location the gentleman from missouri -- i happen to have an acorn location here. this little picture is taken not off the internet, not by somebody that slipped in surreptitiously. this is a picture i personally took. the weekend before the fourth of july, i'm going to guess second or so of july, 2009. i went down to acorn headquarters, mr. speaker. this is at 2609 canal street, new orleans. and this building is acorn's national headquarters.

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 freddie mac 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?

the kool-aid down now, we proved congressman frank was not telling the truth about fannie mae and freddie macdifference. 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. lots of fun. our premium membership. we love you. we'll see you all premium factor subscribers after the show. the spin stops here because we are definitely looking out for alisyn: good morning, everyone. it's thursday, september 24, 2009. another symbol of america's weakness? >> those who used to chastise america for act alone in the world cannot now stand by and wait for america to solve

after rescuing fannie mae and freddie mac a few days earlier and bear stearns the previous month, the federal government decided not to bail out lehman. credit locked up around the world. unemployment rate doubled to nearly 10% and financial markets tanked. >> the president is expected to use lehman brothers as a prime example of why banks need tighter government regulations. he's urged congress to pass legislation for months. today he's expected to tell them stop stalling and get it done. >> reporter: the president will also talk about the steps his administration has taken to stabilize the volatile economy. >> i've essentially taken the program that was voted on by the previous congress, supported by the previous republican president, and we've made it work. >> but making it work has come with a price. >> wall street itself has changed. lehman brothers is gone, bear stearns is gone. merrill lynch isn't an independent company anymore. >> reporter: the white house hopes to scale back its role in the financial sector. >> the president doesn't want to be somebody who runs auto companies

this is according to the freddie mac. i'm not necessarily talking about the 30-year fixed rate mortgage, the regular mortgage, not frills, the basic that most people get, that's a little more than five percent. look at 159-year, if you can make those payments, 4.5%, that is the lowest since records were first kept in 1991. >> wow, nice deal for people. thanks so much, jen. >>> what are you doing next tuesday night? we have an exciting edition, "the joy behar show" will air every night at 9:00 eastern on hln, tuesday september 29th so make sure you tune in. >>> federal authorities raided a warehouse and say they found steroids in something they shouldn't have. you know why i sell tools? tools are uncomplicated? nothing complicated about a pair of 10 inch hose clamp pliers. you know what's complicated? shipping. shipping's complicated. not really. with priority mail flat rate boxes from the postal service shipping is easy. if it fits, it ships anywhere in the country for a low flat rate. that's not complicated. come on. how

people can apply to the making home affordable program if they hold a mortgage from fannie mae or freddie mac. under the program they're cutting interest rate mortgage rates to as little as 2%. the goal is to lower payments to the homeowner's gross income. go to their web sites. >>> the tough economy has had benefits especially for wine lovers. there are great deals to be had right now. that's because fewer people have been buying expensive wines. that's created more supply. since supply is up, prices are dropping. bottles that once sold for $60 selling for as little as $19. grape growers have also felt the pinch this year. with so much wine on the market, a lot of grapes have gone unclaimed. >>> the dow was finishing the quarter with an overall gain. but weak news on manufacturing and jobs prompted a little slide kae for the markets. the dow down 30 points. nasdaq dropping less than two. the s&p lost 3.5 points. >>> coming up on the news, in prison charged for killing his wife. but authorities believe his bizarre behavior may provide a clue in the murder. >>> we'll introduce you to a 2ened-g

paulson refused sending the message that after the federal takeover of mortgage giants fanniemae and freddie maculd be no more bailouts at the taxpayers' expense. >> you don't restore confidence by rescuing one institution after another after another after another after another. >> reporter: for merrill lynch that meant the only way to avoid the fate of lehman and bear stearns was to agree to a takeover. so a deal was made with bank of america in less than 48 hours. in washington today the bush administration sought to reassure a nervous public. >> the american people can be very, very confident about their accounts in our banking system. >> reporter: but the message of the markets today is that this crisis is probably not over yet. >> the bottom line is you had a lot of companies that became caught up in the speculation. they took risks that they should not have taken. they're now paying for those risks. >> reporter: lehman brothers, which was trading at $60 a share just a year ago finished this monday as a penny stock, worth just 21 cents a share, despite the fact that company holds assets wor

in fact, congress pump more money into fannie mae and freddie mac. this was adding gasoline to the fire. we should have stepped back and said, why are we having these incredibly large quasi- government bodies that operate like private companies that have an implicit guarantee from the taxpayers. we made the situation worse. fannie mae and freddie mac continued to put out home loans that they should not have done and we ended up with a house a bubble that finally collapsed and help -- to the meltdown. we had the lessons in front of us and we chose to ignore them in 2004 and in 2005. everyone did. host: mary on the republicans line from hancock, ky. caller: good morning, ma'am, good morning, sir. i would like to say i am part of grass roots efforts but i have never been out of my home. if they would like, i would like to send them some grass from my lands. the thing is, i am not a racist and our president is part white, he is half white. i have no problem with black, white, green, purple, whatever. and i think all of america needs to join together -- a

and i feel there are a lot of calls from you when we see all that speculation, and fannie mae, freddie mac, you kept insisting this is a bad sign, speculation in low price, essential stocks that have no real performance potential in your opinion. why was that happening and what does that tell you? >> i've been around a little while in the market. and in my experience, we get these major rallies like this, the first stocks approach with real value. growth stocks cyclical, et cetera. finally when people are reaching bad ri for performance, they start to come after things that maybe don't make a lot of sense. i've seen moves in stocks that have been 20%, 30%, 40% on the day, number one, and number two, it's questionable whether they have any value. >> you keep pointing out the market is a mirror image of what it was a year ago of the traders were desperate to create performance. now they seem a little more concerned about preserving their performance. >> right. i could see potential scenario where if we had a couple of glitches in this market, if this market started to get some ground, that p

. >>> mclean based mortgage giant freddie mac is making an unconk conventional move to reach out to homeownersre late on payments. the goal is to help supply missing information and document and begin loan modification to avoid losing their homes. >>> it is time for the money- saving tip of the day. with mortgage rates low you may think of buying or refinancing your loan. but be sure to consider closing costs. the fees on title insurance and home inspections can vary from company to company and those costs get wrapped in to your mortgage costs. shopping around can save you hundreds if not thousands of dollars. sometimes going back to someone you used before can score you discounts, too. for more money-saving tips check out my blog the financialista.com. you can follow me on twitter and be my friend on facebook. >> the devil is always in the details. be careful. >>> a top diplomate says it may be time to negotiate with insurgents in afghanistan. that story is coming up. >>> plus, some people in chicago don't want to host the olympics there and they got in to it with police. it is 5:37. here's a

. >>> freddie mac made sales in about $40 billion in multifamily mortgage backed securities. >>> a rebound on wall street. there is a live picture of the floor of the new york stock exchange. coming back from sharply lower earlier performance. the dow with a triple-digit loss and crude oil up about 5% today. welcome to "the closing bell." i'm maria bartiromo on the floor of the new york stock exchange. a lot of volatility today. we have the chicago purchasing manager index earlier today. it was worse than expected. sending the market down better than 100 points on the dow jones industrial average. we've seen a steady comeback throughout the day. the gdp was positive, dipping, but a lot better than people expected in the second quarter. let me bring in bob desanni here to look at these charts. >> what's interesting, normally the chicago pmi doesn't lead the market. it's not a big thing normally. we've got the ism number tomorrow. that is the first look how the month did, september did. traders look at that and say it was disappointing, maybe the ism will be disappointing. they are both a pu

larry fink was the government's go-to guy to help put a price tag on troubled assets at fannie mae, freddie mac and aig. his firm was willing to take the risk. backing a $1 trillion fed program to acquire residential mortgage-backed securities. fink also counseled then treasury secretary henry paulson on the original rollout of the t.a.r.p. plan. he was convinced that using t.a.r.p. funds to acquire toxic assets from the banks was the right move. if paulson opted to acquire equity stakes, which fink says was a major mistake. as a stock market has rebounded in 2009, economic recovery has been slow to follow. blackrock chairman ceo larry fink shared his opportunity and what it will take for a broader recovery to truly gain traction. based on the economic backdrop, is the market and money on the sidelines moving into the market expecting too much? >> see, i don't think so. i think there's just so much money sitting earning zero or close to zero with the two-year note, trading below 1%, so there's huge pools of money earning very little return. the federal reserve has been very adept at keeping it

it required fannie mae and freddie mac to have green mortgages.ut this is going to cost every american household $1,750 to comply with this law. higher taxes, bigger government, what they do not say is that tens of millions of american jobs will be shipped overseas as the result of the passage of this bill. if you are a high energy industry, they would maybe put out of business because they make steel the old-fashioned way. when you make raw steel, you emit carbon dioxide into the air. our competitors around the world do not have these kind of policies. they do not have 1/100th of the environmental policies that we have today. that are going to buy the foreign steel and put the 2500 people who live in my district out of business. virtually none of my colleagues voted for this bill. but it did not stop there. then we began to see their lead proposal over what they wanted to do with our healthcare system. let's all be frank. our healthcare system is not perfect. we all know there are problems with it. it costs too much. secondly, there are a number

for support from your office to ensure we have representatives from the treasury, fannie mae, and freddie mac to go over those programs that you referenced. >> a good use of your extra 20 seconds. >> thank you. >> thank you. i would like to return to a point you raised. the stress tests are affectively the tool by which we have measured the strength of the 20 largest financial institutions. that is what gives you confidence, both that we understand the risk of exposure on toxic assets and the overall projections on how stable these institutions are. the worst-case scenario under the stress tests for 2009 projected average unemployment for the year at 8.9%. as you know, the current unemployment rate is 9.7%, and the average of the year has reached 8.9%. so, the panel has recommended that under those circumstances, the stress tests be repeated for these financial institutions. does treasury plan to do that? >> i think there is an important thing to start with. the most important thing to look at was the loss rates that were assumed for the worst-case scenario. if you look carefully, as you have

and implicit taxpayer guarantees to fannie mae and freddie mac.h risk securitized mortgages, complex derivatives. it was perverse government policies that caused this mess. privatized profits and socialized losses, the banks and car companies winds, tales, the taxpayers lose. now, naturally, you might say if we don't like these policies we can vote to these legislators out of office. well, perhaps not. suppose the policies were not enacted by congress, but by unelected bureaucrats. unaccountable to the voters alphabet agencies and the cabinet departments here in d.c.. that's what actually happened. the bailout was wasted on the public by the treasury secretary, called the congress. if you look at the very first sentence in the constitution after the preamble, article 1, section 1, all legislative powers shall be vested. lawmaking is for the religious leader, not the treasury department, and no to the key terms, all legislative powers shall be vested. the vesting provision is not selective and it is not discretionary. delegations are okay, said the

this year's winners include arnold and porter, covington, allen hamilton and freddie mac. discovery communications in silver spring and marriott international in bethesda. >>> president obama took a break on his battle for healthcare reform. drew levinson has details. >> reporter: president obama is urging leaders. >> it is time to move forward. >> he brought together isreali prime minister and palestinian president for the first time since his election. >> we cannot continue the same pattern of taking tentative steps forward and stepping back. this was one stop in the president's marathon day of diplomacy. he talked to the chinese president about trade, the nuclear standoff with iran and north korea and global warming. it's all happening on the sidelines of the u.n. general assembly meeting. one day before the start of the official session and world leaders met for a special summit on climate change. president obama helped kick off talks with a promise. the u.s. will be a partner in fighting global warming. >> we understand the gravity of the climate threat. we are determ

. >> you want to let fannie mae and freddie mac go under.ean: 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 obama who is and will be the greatest economic president since roosevelt. >> has it ever occurred to you that these guys are just out and out con men who are seeking power? >> no. it hasn't. the people seeking power the con men were in the last administration republicans on capitol hill w

what about freddie mac? what about the federal housing administration which is going broke because it's making no down payment loan? why don't they go after that stuff? >> all of these things i agree with you on, larry. i have a question for you. i would have imagined you would be supportive of the dodd legislation in that it actually does extensively reduce regulation. >> no. no, no. i want competition. >> how does it reduce regulation? >> i want competition among regulators. you know what? it's bad enough we got to do this. i say let them compete with each other. >> that's exactly right. >> at least inside the government we could have some competition. listen, look at london. look at europe. they all had single regulators, andrew. they bombed out just as badly as we did. >> that's the point. melissa, you had asked how this is a reduction of regulation. in the end when you put everything together in one department, i think you actually will have less regulation. u i don't know if that's good or bad. it may

financial, covington and burlington, discovery communications, financial industry regulatory authority, freddie mac and marriott international. >>> want to make a lot of money? design a smart phone app. our partners at "usa today" report it is hard to hit the jackpot but for people who do it is not unheard of to make $200,000 in two weeks alone. the group estimates consumers will spend $4.2 billion on apps by 2013. this business is not going away. maybe i will take some classes how to design apps. >> yeah. wow. >> the financialista. check her out. thank you, jessica. >>> time for a followup to a story you saw first here on 9 news now, the southeast tennis and learning center will have its lease restored. the dc council approved emergency legislation on tuesday. it blocked mayor fenty from evicting the center. his administration says the center violated the terms of its lease. >>> congratulations. it is 8 after the hour, kristin fisher introduces us to high school heros. >>> do you check the web before grabbing coffee in the morning? you are not alone. how new technologies are feeding our web addict

bill: he lied about his outlook of fannie mae and freddie mac when we just played the clip and he wasg to tell the audience i didn't say what you just heard me say. howard dean did the exact same thing the other day. there you have to go after them. there you have to say. >> all you have to do is replay the clip and say. bill: when he is standing there and going no, i didn't do it. have you got to say yeah, did you it. people are going you are rude. there is a place for rudeness. but it has to be the last -- >> i don't want to be rude. bill: you can be rude. [ laughter ] >> i would rather think there is a place for directness. bill: all right. well, i like that. i'm direct and not rude. we will hold the speaker over because i want to find out three things that speaker gingrich think would make health care reform acceptable to all of us. three things. later, california now says doctors who gave anna nicole smith massive amounts of narcotic were actually sexually involved with her. is it legal upcoming. quality and reliability... are more than words here. it's personal. i have diabetes.

s like freddie mac and fannieae, every compnent and report back to us next year after the midterm election on what it finds caused the economic collapse that began last september and continued to mushroom until late march of this year. there are some that are talking of a rush to judgment in terms of financial regulation, but i hope we'll take a pause, give this commission time to act,et us find o wt a forensic audit tells us of what happened in america and our financial markets, and let's respond to that after we have allhe facts. i think a rush to regulatory judgment under what one might think for the best of intentis caused the problem cost unintended consequence of having a more difficult impact on the economy than it should. i think this body and the house acted wisely. i appreciate the president's having signed it expeditiously. and i commend the majority leader, the minority leader, the banking committee chairman, the ranking member, the speaker of the house, the republican leader in theouse, and the majority leader of the house for making outstanding appointments. the appointees to

fab any may and freddie mac.s is something the president said he would consider when he got into office. shepard: the fdic will be taking new steps to keep the dope sits safe. what is the new steps on that. >> the fdic has taken over more than 100 banks in the financial crisis. that has scweefsed the insurance fund that insurances your bank accounts 250 each. that dropped from 50 billion to 10 billion now. all funded by premiums the banks way. usually about 12 a year. financial sources tell us tomorrow the fdic ask banks to prepay yes, ma'am yeems. that could be about $40 billion in prepayments or more. shepard: fdic could use an injection of money right now. >> that's right. it's got all the banks that it's currently trying to work out and close and wind down. analysts are expecting that potentially another 100 to 200 more banks could fail and maybe even more than that. the fdic needs this money to protect shep peter, thank you. new difficulty for activist group known at acorn. some workers were recently caught

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