Reply #24: Today's NYT has an artice that explains what happened at Fannie and Freddie

[karynnj]

It deal with what motivated the companies to abandon prudent practices. (Short answer pressure from stockholders and hedge funds to make more, Congress, and lenders, who often threatened to go directly to Wall Street.

http://www.nytimes.com/2008/10/05/business/05fannie.html?hp

As the root problem was shaky, bad loans - this article, the 2004 plank, and Kerry's effort to deal directly with the bad loans are probably the best defense of him.

As to Bush, the NYT article shows that Paulson's moves could well have hurt. In addition, it was Chris Cox who oked the practices that led the financial companies to aggressively get into this business - leading to the threats by lenders to the FMs that if they didn't take the riskier loans, they would be cut out. (This speaks of how they got in - http://www.nytimes.com/2008/10/03/business/03sec.html?scp=9&sq=2005%20House%20banking%20regulatory%20oversight%20Senate%20Democrats&st=cse
Cox was brought in to replace someone who was more in favor of regulation. http://news.bbc.co.uk/1/hi/business/4607035.stm