that's not a time for a precipitous change in the arrangements with respect to the gses, but that time will come. the president is committed to propose a plan next spring to the congress. >> larry, very quickly here, final question. ben bernanke on the hill today saying that the economy is slow and that the outlook remains unusually uncertain. his quote, not mine. how is this economy going to get revved up again? how do you create jobs in thissen viern fundament do you agree with the chairman's statement? >> i don't agree with it -- >> no. you quoted him very selectively emphasizing the most negative phrases that were contained -- >> well, the market traded down when he spoke, so i'm just following what the market reacted to. >> in his outlook, look, we're determined and the president said it many times to do what's necessary for growth. the fact that it happened too late and it happened too slowly, but the fact that congress is at last extending unemployment insurance looks like it's on the verge of providing significant new credit and tax incentives for small business. he's starting

i would love to hear from -- about gse's. we are pressing forward trying to understand gse's down the road. i think we missed a great opportunity to do that now. i wanted to pass a iraq -- an amendment to require every person who purchase a home to have a minimum 5% down payment. many countries that have not had the problems that we have had had a 15% down payment on average and still have the same hauler ship -- homeownership rates. if that one requirement would have kept us from having the type of double that you had out in california might have kept us from having many of the problems that we have now. >> sarah, i have not had a chance to think through the details of that proposal. >> a 5% down payment. >> i would say that there were certainly mortgages that created problems that did have down payments at that level. they became problematic, so i think it is an interesting proposal and i do think underwriting standards should have been tougher, but there were a range of practices of their -- there that really created probl

gse debt reform. do you believe that the debt of fannie and fred i did backed by the full faith and credit of the united states of america? well, not technically or legally but -- legally as far as -- i don't -- i don't know what the legal status is. i don't think it has been given that status by the congress. but of course, the -- >> believe the market has given that status? >> the market, i think, takes appropriate comfort from the fact that ther is a considerable amount of appropriated funds backing up those two companies. >> what risk does the fed face in holding gse debt? >> well, for exactly the reason you just rais, that the treasury is providing backstop support for the mortgages. we are taking essentially no credit risk. there is some interest rate risk, if interest rates were to rise sharply. but on the other side of that with the very low cost of funding, we have actually been earning a fairly high income from our holdings and remitting that to the treasury. >> lastly, do you believe that i

gse debt reform. do you believe that the debt of fannie and fred i did backed by the full faith and credit of the united states of america? >> well, not technically or legally but -- legally as far as -- i don't -- i don't know what the legal status is. i don't think it has been given that status by the congress. but of course, the -- >> believe the market has given that status? >> the market, i think, takes appropriate comfort from the fact that there is a considerable amount of appropriated funds backing up those two companies. >> what risk does the fed face in holding gse debt? >> well, for exactly the reason you just raised, that the treasury is providing backstop support for the mortgages. we are taking essentially no credit risk. there is some interest rate risk, if interest rates were to rise sharply. but on the other side of that with the very low cost of funding, we have actually been earning a fairly high income from our holdings and remitting that to the treasury. >> lastly, do you believe

i would love to hear from -- about gse's. we are pressing forward trying down thestand gse's road. i think we missed a great opportunity to do that now. i wanted to pass a iraq -- an amendment to require every person who purchase a home to have a minimum 5% down payment. many countries that have not had the problems that we have had had a 15% down payment on average and still have the same hauler ship -- homeownership rates. if that one requirement would have kept us from having the type of double that you had out in california might have kept us from having many of the problems that we have now. >> sarah, i have not had a chance to think through the details of that proposal. >> a 5% down payment. >> i would say that there were certainly mortgages that created problems that did have down payments at that level. they became problematic, so i think it is an interesting proposal and i do think underwriting standards should have been tougher, but there were a range of practices of their -- there that really created problems. >> thank you. i think -- i think each of you for your testimo

point out that nearly two years after passage of a gmc legislation, we still have not received -- of gse legislation, we still have not received a nomination for the housing finance administration. taxpayers have already lost a lot and counting. two years would be much too long under normal circumstances. but in the current circumstances, it is unacceptable. to accomplish this goal, the federal finance -- a federal housing finance division works with -- i look forward to hearing from mr. lake on his plan for providing the committee and the american people with lower the oversight of fhfa. >> thank you very much. >> how want to welcome the nominee is that the president has chosen a very well and very wisely. dr. yellen, of course, is a brown graduate. we have to say no more. [laughter] mr. diamond is an expert from the university. could not into brown? [laughter] and miss bloom raskin, i like to see that you, like me, have found a job. we are here at a critical moment. there are those who suggest that things are coming along and we have to focus on the great pivot away from the support of

liabilities but i think we are 62 trillion correcting the pension guarant system come protecting the gse, a government sponsored entities, fannie mae, freddie c, sallie mae, fanny farmer, i don't know hothat got in there but it seems good. anyway, saving them all from tranarency. guarding subidies, placing the class warfare card, we have versus them, the race card and on and on and on. the fun and games is over. the smile of the purveyors cynicism which is we areonly doing god's work. we will be a little less invoked. so, the staff will work with your staff during the august recess and be renewed and refreshed from the return in september. what's all stay in the room, no anger or bitterness. it isn't going our way we must come and that this for me -- we must trust each other, listen to each other, challenge each other, respect each other and continue to know each other. we care deeply about our own issues as it should be. but this fine country is bigger and more imortant than any of my personal issues or yours. so as we struggle to educate our fellow americans as to the vivid realy of wh

thesabre travel that were part of the business that runs the gse and travel paucity one of the nation's largest and most popular online travel companies today in my testimony i am representing three groups, the director of travel services as a season, the trade assoation for online travel companies, the american society of travel agents, the largest association of professional travel retailers inhe world and the consumer travel alliance of nonprofit member of the legislators and the -- member of the consumer federation of america o inform and educate legislators and regulators about policy of consumer travel. i am responsible for the systems that manage the sale of air travel across all channels where airlines distribute which is heavily focused on airline on bubbling. up till recently air traubel shopping in the u.s. has been one of the closest things you'll find to the adam smith perfect marketplace. consumers have enjoyed access to near-perfect information on air products and prices. through the internet travelers can shop anytime da or night and the prices while constantly changing