… at ground zero of the subprime meltdown, I would detail a couple of things:
1) This whole meltdown is based on the failure of Mortgage Backed Securities.
2) Senator McCain signaled a warning in 2005 that Fannie and Freddie were skating on thin ice. In particular, the GSE’s were not able to report clean books, and had to restate earnings (not good when organizations can not balance their own books); Senator McCain called for oversight reform – Democrats in Congress resisted.
3) The subsequent mortgage vintages for 2006 and 2007 turned out to be the most toxic on history, with record rates of failure.
4) The Fannie and Freddie executives who brought us this mess have been retained by the Obama camp as advisors, one of whom was tapped to lead Obama’s VP search.
How can Obama claim to have the judgement to lead us out of this when he is being advised by the people who got us into it?
Why did Obama not support reform in 2005 before it was too late?
The Senate committee that is supposed to oversee the Mortgage industry is the Finance Committee, and Chairman Dodd was receiving special favors from the largest subprime lender (a Friend of Angelo). This was clearly a conflict of interest, yet Obama has not stood up to Senator Dood and asked him to step down.
They key to this is the period between 2005 and present, when the real toxic mortgages were issued.