fannie mae and freddie mac have not propelled our nation to housing finance nirvana. when compared to other modern industrialized nations, whether we look at rates of homeownership or spreads between mortgage interest rates and sovereign debt, the u.s. can typically be found either in the middle or the bottom of the pack. however, there is one category where the u.s. has clearly led, foreclosure rates. only in america, can you find a government that subsidizes housing more so that we the people can get less. we do not have to look overseas to see a well functioning housing market without government-sponsored enterprises. we don't have to look any further than our own jumbo market that has successfully operated without them. prior to the housing bust, the jumbo market was 20% of our total housing market. there was capital, liquidity, [inaudible] competition, eight 30-year fixed mortgage choice and innovation all right here in america. all of that was delivered for about 7-20 basis points from what the gse's offered. i would offer a modest amount to avoid taxpayer bailo

market crashing in 2007, we're in 2013, fannie mae and freddie mac are making money again.s is the time to reform because the longer they make money, the harder it is going to be convince congress or white house to do anything. >> paul: congress will want to take the money and spend it on something else. isn't it a step in the right direction, get rid of fannie mae and freddie mac and you have public risk, taxpayer risk and private profit. if he gets rid of it that is a step in the right direction? >> as the step in the right direction. but there are plih that you have a bill in the house and bill in the senate that are pushing in the same direction. i think what you saw from the president was an attempt to get in front of that, in caboose and he wants to get in the front of train. >> paul: do you see any problem with this proposal? are we finally moving in the right direction on what has been frankly since the crisis a nationalized housing market? >> it's the right direction. there is a problem. the difference between the house which gets rid of fannie mae and freddie mac

the bag. >> the president imposed restructuring, proposed restructuring.fading out fannie mae and freddie mac. housing is doing well. fannie and freddie is profitable. as of next month, they will have paid back about 146 billion of government loans.>> the president was disingenuous there. these folks made all of these this money. we encourage them to do that. they were pushed to do it. they pushed the money out the door to do it. barney frank, god bless him, they were the ones that pushed fannie mae and freddie mac to do this. >> they backed 90% of new mortgages? >> that they should not have. they were buying this stuff up. >> what happens if they go away, fannie mae and freddie mac? >> they should. >> what if they do? >> the problem is they will have to phase of government support, but there is always a trick. here were entities that have the implicit guarantee of the government, never explicit, but of course implicit enough that in the end when they went bust every penny was reimbursed. there is no reason that the government should be in the business. canada does not even have a deduction f

, all these cute names for complicated housing agencies, but without fannie mae and freddie mac i it's fair to say their prime contribution to american life the 30-year fixed rate mortgage would not exist in nature, it is too much risk. the private banks would not be handing these out to most homeowners that they essentially exist there. in a decision to the fact they give this big tax break for buying a house. you get this kind of government buyback of the loan which is what allows these incredibly long-term, stable, secure and advantageous loans you could not get on the private market to exist. >> absolutely. you see every country has some form of market that our government involvement in the markets. i want to go back and talk about the rental. they play a very outside role in the rental markets. >> they are fannie mae and freddie mac. >> government supported entities. >> they play a very important role in the rental markets especially during a crisis is. they were back stopping 80%, 90% of the rental markets. this reform will impact renters as much as it impacts people who hav

fanny mae paid $10 billion and freddie mac paid $5 billion. the goal is to make these companies more like the fdic where they are just insurance backers. so this market to go all private, i think if you look at the investigations into the housing market which you would discover is that the early loans that were created into mortgage backed securities and collateralized debt obligations, went directly from wall street to the rest of the world. and people should understand then those loans went belly up. people should understand that fanni expe freddie do not originate loans. let me say this again, fanny and freddie do not originate loans, they buy loans. and people should understand that the rating agencies who were in charge of making sure that these loans, you know, they had real backing, they failed in their task. so fannie and freddie were at the end of this loop, not at the beginning of this loop. host: caller, thank you. the rating agencies. guest: in terms of what he said, he said that he wanted to make a clear distinction that fanny mae

also a private private company that actually did a lot worse than fannie mae or freddie mac. yes they did but the federal reserve was buying agency bonds that would be freddie and fannie and freddie agency bonds since one nine hundred ninety nine so the thread had already give. support i don't think china would have bought all those bonds in the first place had the fed not been active in the market so to say that they were private enterprise i think is a false misconstruction here's the heart of it the end of the day we're getting all the money back and we're making a profit which shows that it was a good idea to bail them out now should we have anything too big to fail in the future no we should and that's why as you know i support the dodd frank regulation bill that's why i think that all of these entities private and public need to be regulated so they're not to big to fail the future i agree that we shouldn't have too big to fail but how did we get to in the first place ok let's talk about how we got here versus where we got here because the republican congress got rid of

with that as the backdrop, the president said it's time to reassess fannie mae and freddie mac. "for too long, these companies were allowed to make big profits buying mortgages, knowing that if their bets went bad, taxpayers would be left holding the bag." during the housing crisis, fannie and freddie received $188 billion in taxpayer bailout money. now, a bipartisan senate bill introduced in june would create the federal mortgage insurance corporation, to back mortgages and charge lenders for guarantees, similar to the fdic's guarantee of bank deposits preventing bank runs. "it will require banks to be more diligent when approving loans. you might think that may make it harder, but actually, we've seen that already, and the housing recovery is going exceedingly well." "i think the banks have learned their lesson." morningstar analyst robert johnson says home prices nationwide are up between 7 and 12 percent over a year ago, but still 25% below where they were when the housing bubble burst. now, getting back to where housing was before is in sight. "it's going to take two to thre

let's get rid of fannie mae and freddie mac and -- the problem there is have public risk and taxpayerisk and private profit. if he gets rid of that that's a step in the right direction. >> absolutely a step in the right direction. politics at work here, too. you have a bill in the house and a bill in the in the pushing in the same direction. i think what you saw from the president was an attempt to get in front of that. >> he has been in the caboose. >> caboose and wants to get in the front of the train to take credit for it. >> james freeman, do you see any problem with this, with this proposal or are we finally moving in the right direction on what has been, frankly, since the crisis on nationalized housing market. >> well the right direction, but, yes, there is a problem. the difference between the house which -- gets rid of fannie mae and -- excuse me, and freddie mac and does not replace them with anything except free market, the plan mr. obama is backing, senate bill, still has taxpayers on the hook. big step forward you mentioned is that the private investor takes the first los

fannie mae and freddie mac don't have to cut the grass or upkeep their properties. are you kidding me? they don't? how did they win this? ♪ ♪ [ female announcer ] nothing gets you going quite like the power of quaker oats. today is going to be epic. quaker up. everybody has different ideas, goals, appetite for risk. you can't say 'one size fits all'. it doesn't. that's crazy. we're all totally different. ishares core. etf building blocks for your personalized portfolio. find out why 9 out of 10 large professional investors choose ishares for their etfs. ishares by blackrock. call 1-800-ishares for a prospectus, which includes investment objectives, risks, charges and expenses. read and consider it carefully before investing. risk includes possible loss of principal. ♪ ♪ (vo) purina cat chow. 50 years of feeding great relationships. britta olsen is my patient. i spend long hours with her checking her heart rate, administering her medication, and just making her comfortable. one night britta told me about a tradition in denmark, "when a person dies," she said, "someon

targets fannie mae and freddie mac. ,lso hillary, the documentary, and reice priebus, the angry chairman. >> i will not t expose our candidates to this kind of treatment. captioned by the national captioning institute --www.ncicap.org-- >> the name of the program is "inside washington" and if there is a bigger story in washingtong than the sale of "the washington post," i cannot think of one. we have colby king, lois romano, a "the washington post" veteran. charles krauthammer. i came to washington to work for broadcast properties, which were owned by "the washington post." the former executive editor len downie was in the newsroom as katharine graham's granddaughter announced jeff bezos, the founder of amazon, wasas buying the paper. >> she read a statement in which she made clear he strongngly subscribes to the journalistic values of "the washington post." >> let's take off the pundit hats. give me your personal reaction. lois, you wrote a fine piece for "politico." >> thank you. my first reaction was shock. i was home, working. i got in the car, and went back to the office. it was a l

>> very often they would sell that to fannie mae or freddie mac, and that was the system that worked became too expensive in a bailout scenario. so one thing fannie and freddie used to do was just insure the mortgages. that's what, i think, the government is likely to do. basically, in a really bad housing market if you have huge losses to take, the government would absorb some of those, but they wouldn't necessarily, i don't think, become dealers and traders in mortgagings. keep in mind, those were private corporations that had shareholders that were creating billions in profits by trading mortgages for those shareholders. so the government presumably would not want to make a profit on this. of. jenna: it's very guesting, fannie and freddie absorbed a space in the market that was this weird hybrid sort of thing. we'll leave that for just a second. one of the other things the president's supposed to be talking about is instead of having less money to put down, there's indications he's going to say, listen, people that have pretty good credit ratings are not getting loans because bank

>> absolutely. >> fanny mae and freddie mac, we had to put in $90 billion to rescue them.he taxpayers don't get profits. when they're on their feet, the profit goes to private interests. it should be what the service hates the most. they partly do, but then use it as an excuse anyway. the homes backed up by freddie mac and fanny mae, the taxpayer has to pay, right? now, new loans? 90% of those are backed by the american government, so overall when you take all the homes, three out of five thunderstorms now in america are backed up by the taxpayers. joe, i find that crazy. does that make me a conservative that i think it's crazy that taxpayers are backing everybody -- why would i? i've got nothing to do with them. >> you sound like you're getting ready to qualify for a job... you have a very significant point here. to ana's point, two things are going on. there are a lot of flippers and bank property investors looking at the market here, that has led to 19% increase in the number of flippers who are buying homes this year as opposed to last year, and a 74% increase over the

liz: freddie mac, at second largest quarterly profit in the company's history. happens to be the 7th straight quarter of profits for the mortgage giant. david: yahoo! will change its logo. each day over the next four weeks they will showcase 30 different logos on the homepage. on september 4th. one will replace yahoo's current logo. >> i like the current one. leave it. >>> disney warns it will book a large loss on the big budget bust, "the lone ranger." they expect to lose 160 to $190 million on the film in the current quarter. david: we saw that coming. president obama canceled his bilateral meeting with russian president vladmir putin following russia's decision to grant asylum to edward snowden. the meeting was scheduled in moscow next month a lot of earnings straight made. "after the bell" starts right now. 6. david: we are going right to dennis kneale who gives us green mountain reports, another company reporting earnings today. what's the news, dennis. >> good news bad news on green mountain. beat on earnings per share. they come in at 82 cents instead of

they're known as freddie mac and fannie mae.now, for too long, these companies were allowed to make huge profits buying mortgages, knowing that if their bets went bad, taxpayers would be left holding the bag. it was heads we win, tails you lose. and it was wrong. and along with what happened on wall street, it helped to inflate this bubble in a way that ultimately killed main street. so the good news is right now, there's a bipartisan group of senators working to end fan i and fred i as we know them and i support these kinds of reform efforts and they're following four core principles for what i believe this reform should look like. first, private capital should take a bigger role in the mortgage market. i know that sounds confusing to folks who call me a socialist. i think i saw some posters there on the way in. but i actually believe in the free market and just like the health care law that we put in place, obama care which -- which by the way, which by the way if you don't have health insurance or you're buying it at exorbita

president obama is outlining a proposal to overhaul fannie mae and freddie mac. diana olick is monitoring the president's speech happening now in arizona. diana, over to you. >> reporter: that's right, mar e maria, the president is at the podium in arizona. this is a part victory lap and part call to action. the focus, mortgage finance. he will say private capital should take a bigger role in the mortgage market and advocate winding down fannie mae and freddie back, which back two-thirds of all new loans, the president's plan to make investors pay up front for limited guarantee of mortgage securities mirrors a bipartisan bill now in the senate. >> we're really at a critical time for housing finance reform. if they can't get a bill through the senate banking committee this fall, you may be able to write off housing finance reform for the entire obama administration. in many ways, it's now or never. >> reporter: the concern is that now amid rising mortgage rates, winding down the government mortgage giants will inevitably make loans more expensive, this as low rate

to phase out the two government companies at the heart of the financial crisis, fannie mae and freddy mac. will it make mortgages costlier and harder to get? is that the price to get uncle sam out? >>> how vulnerable are the nation's utilities to a cyber attack. experts say it's not if but when. the cost could be high. >>> compete and beat. how mom and pop manufacturers once left for dead are making a big come back and competing against foreign rivalers. our made in america series continues tonight on "nightly business report" for tuesday, august 6th. >>> good evening everyone. president obama taking aim today at boosting homeownership by proposing an overhaul of the massive mortgage market. his targets, long-term political hot potatoes. diana olick joins us from washington with more on what all this might mean. >> reporter: suzy, it should come as no surprise mortgage is front and center, as interest rates are rising, credit is the last barrier to full housing recovery. >> our housing market is beginning to heal. >> reporter: president obama returned to arizona, one of the hardest hit st

they should see more gains should congress decide what to do with fannie mae and freddie mac. i'm diana olick in washington. >>> a small biotech stock makes a move lower. vical will stop development for its cancer therapy drug. a late stage trial, failed to demonstrate that the treatment was significantly better than conventional chemotherapy. the company will focus on its infectious disease vaccine. that sent shares plummeting down more than 57% to 1.53. >>> young brands reported a 15% drop in july sales in china. the parent company of kfc and pizza hut posted a steeper decline in those stores after a food safety scare. china is the company's most important market generating more than half its operating profit. shares were up fractionally at the close. but then as you see on that chart, they fell after hours. >>> farm commitment stocks getting a boost from the crop report today. the department of agriculture cut its forecast for the size of the corn harvest here. prices shot up for commodities like corn and wheat. investors seem to be buying into the idea that farmers are mor

the latest earnings from mortgage giant freddie mac came close to hitting a record. the agency, which was bailed out by taxpayers following the housing crisis, had a $5 billion profit. some republicans want to wind down fannie and freddie over 5 years and close the fhfa. bank of america shares fell on a double whammy. shares tumbled more than 2% wednesday after the justice department and the sec both lodged charges against the bank for allegedly cheating investors through the sale of residential mortgage-backed securities. according to the charges, bank of america sold $850 million worth of bad investments. bank executives claim the company did nothing wrong because the securities went south after the housing market collapsed. two banks are being sued over allegations of price manipulation in the aluminum market. according to bloomberg news, the screenmaster company, which sells products made with aluminum, accuses jp morgan and goldman sachs of hoarding the metal in detroit-area warehouses. the lawsuit claims hoarding drove up prices. a jp morgan spokesman tells bloo

. >> reporter: fannie mae and freddie mac, few names cost the government more. they buy mortgages from banks, and when the housing crisis hit, they were stuck with billions in bad loans, in turn took nearly $200 billion from taxpayers. president obama's plan would gradually eliminate and have private investors provide more to the housing market and take a larger hit if investments fail. the government would offer limited guarantee on mortgage investments, only during catastrophic drop in the housing market, and would charge investors for that guarantee. while this may be safe for taxpayers, it will likely cost home buyers. >> any housing finance reform plan unfortunately is going to make rates more expensive. what you're trying to do is reduce the government subsidy for housing, and there's no way to do it without seeing the cost to the consumer go up. >> reporter: just a few months ago with an improving housing market, it seems congress had little reason to overhaul the government's housing finance system. then republican senator bob corker and senator mark war

one of his key proposals: wind down the roles of freddie mac and fannie mae. the two massive mortgage finance companies taken over by the federal government in the depths of the housing crisis. in phoenix yesterday, he endorsed a senate proposal to-- quote-- "end freddie and fannie as we know them:" >> first, private capital should take a bigger role in the mortgage market. i believe that while our housing system must have a limited government role, private lending should be the backbone of the housing market, including community-based lenders who view their borrowers not as a number, but as a neighbor. >> warner: freddie and fannie have been in government receivership since failing nearly five years ago... costing the government $187 billion to bail them out. now they are turning a profit.. and are on track to fully repay that amount by 2014. two out of every three new home mortgages today are guaranteed by freddie and fannie, 68% of the market. to explain how would the change that landscape we turn to guy cecala publisher of "inside mortgage finance"... a hou

i think freddie mac has one also in chicago.o go to that regional office and really explain what is going on. they need to give them, take names, take addresses and go and really sit in those offices and until they get solutions for this at the regional office level. i mean they have, chicago regional office right there. the other thing they should do, should go to congress say quit making policy that gives loans to people that can't afford them. fha is still doing this today. i just release ad study today that shows in chicago, highlighted in the study, that low income zip codes in chicago and minority zip codes in chicago have much, much higher default rates with fha, recent fha loans, than middle income and non-minority neighborhoods in chicago and elsewhere around the country. this continues today. melissa: john what do you think about that? ed knows the situation well. he says go to the office and talk to folks locally. do you think that would work? >> i would amplify that. the letter of the lawyer doesn't require them not

democrats, republicans, president obama, all agree the government should shut down fannie mae and freddie machow fast and what should congress put in their place? >> the president says the government should wind down fannie and freddie by 15% each year in their place only if private investors take losses first. that should guarantee help home buyers have access to a traditional 30 year fixed rate mortgage. with this proposal, a bipartisan senate plan and a bill house republicans have advanced through a key congressional committee one am list says the chances for government housing reform have improved significantly. this is the critical window for action. if you can see progress in the senate in the fall odds go up dramatic little that we could get a housing finance reform bill done during president obama'spxx tenure. that is something people would not have said six months ago. some analysts fearless risk for taxpayers may lead to higher borrowing cost for home buyers, shep? >> shepard: we reported the president is in neengs which is also the spot where president obama first introduced the ho

freddie mac earned $5 billion from april through march, the seventh straight profitable quarter for theage giant. the second-quarter gain compares with net income of $3 billion in the same period last year. freddie says the gain was due largely to increased profits from investments made to hedge against rising interest rates. that helped offset losses on mortgages during the quarter. the news comes as legislation in both the house and senate looks to phase out fannie mae and freddie mac over five years. >>james: a fiat that can drive on water but the automaker did make waves and turn some heads and chicago with a group of fiat the jets these rates up and down the chicago river. it was all part of a creative advertising company for a be a tie and brand. they're just jansky's which allow them to move on water. --j et ski's. 628 right now. we will be back with the details of your commute which is probably on the road and we will take a look at whether it as well. here's a live look outside children's hospital in oakland. this is are breaking news story. to your--two people shot to create a

president obama giving a speech on fannie mae and freddie mac today, and i see the home builders are a little bit weak. there's a concern he'll call for essentially phasing out fannie and freddie and some people are concerned it will lead to higher interest rates down the road, way down the road but people stress about this very early on. meantime, the retailers a little bit of a split news here. kors and fossil had great guidance, the jewelry-makers, shoe-makers, et cetera and the teen retailers, american eagle lowered their numbers and they are all to the downside so really a split market here. >> that's really amazing. look at those michael kors numbers, up 18% or something like that, just astounding. >> overall the numbers have been really good. again, in a different group, accessories, bags, shoes, jewelry, that's what's selling. >> get one of these suits there? >> yeah. >> we're going to run out to rick santelli now in chicago, get the news on a three-year note auction, rick? >> parts of this auction that were very, very, very good. we gave the auction a b-minus. let's go throug

freddie mac reporting rates have injuried a full percentage point since may. >>> and reports that theapan nuclear plant has called for international help. the level is set at level 3, the highest since the tsunami. and a florida community on edge ahead, a sinkhole threatening to swallow up everything underground. >>> and storms out west giving needed rain but also lightning causing problems with the wildfire situation there. i will have the latest. >>> welcome back, a small florida lake is gone, believed to be swallowed by one of the state's infamous sinkholes. people who lived near the lake said it looked low on tuesday. by late afternoon, it was draining into the sinkhole. the pond was five feet deep in some spots. now it is barely there. so far, no one has been evacuated from the homes closest to the ponds. >>> right now, wildfires are burning large portions of the western united states. right now at least 50 fires have been burning since wednesday. the fight to contain the fires has already cost over a billion dollars. here is more on one of the most stubborn fires in yosemite's n

he says he's ending fannie mae and freddie mac. but i see at least one if not two new government insurance plans. is anything really changing here besides rhetoric? and as the time warner/cbs blackout continues here's the big question. will this speed up the demise of the cable tv model? more and more americans are looking into cutting that cord. all those stories and much more coming up in "the kudlow report," beginning right now. >>> good evening, everyone. i'm larry kudlow. this is "the kudlow report." first up tonight, a major shake-up at two of the country's most influential newspapers. after four generations of family ownership the "washington post" is selling to amazon ceo jeff bezos. this coming on the heels of the "new york times" fire sale of the "boston globe," unloading the paper to red sox owner john henry for seven cents on the dollar. so what do the "washington post," "the new york times," "the boston globe," and let's add the "l.a. times" and the "chicago tribune," what do they all have in common? well, they're flun

the talk this week has been fannie mae and freddie mac and at to do with them despite reporting enormous profit. president obama wants to eventually make them private but tom sullivan has something to say about that. >> fannie mae and freddie mac, can you put them back together again? i think you can the esident wants to wipe them down, take a loss. i believe they are not only viable, they worked for 70 years it provided money to generations of homeowners. what went terribly wrong was not them, it was, push them to make loans to people preously not qualified. the solution is to go back to the simple rules. 20% down with credit, it worked for years and the president said the private mortgage business should now make e loans. without the flow of funds from fatt and feddie there will be limited investor meyfor mortgages, banks will become pickier than ever before and who gets a mortgage. they will need to keep more mortgages in the bank's portfolio which means higher interest rates. the president gets his way, my opinion is it will kill the struggling real estate recovery. isn't there someo

wind down for fannie mae and freddie mac is similar to what we see in the path act. having said that, i have frequently, in my career, found of whatgreeing with 80% the president says. i find myself agreeing with 80% of what he does. -- disagreeing with 80% of what he does. >> another question -- there are a number of things in your path act proposal that deal with dodd frank. is there a likelihood that as a -- of of this ross us this process that we might see dodd frank reform? >> i am encourage. it is clear as a conservative republican, i have not been a of dodd frank although i certainly have a great amount of for its author, chairman frank, who is clearly one of the smarter people i have met which does not mean he is right or correct. you would have to ask my colleagues on the other side of ae aisle -- i fear some have more religious adherence to the brands then perhaps the named authors of the act have. when you look at what the regulators have done with qm, what is calm -- contemplated by qrm, i think that is unsustainable. i do not know how you could ultimatel