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Isn't another, BIGGER housing crises brewing?

It just seems like if the govt was CONFIDENT that their policies were working, they wouldn't extend an UNLIMITED line of credit to Fannie Mae and Freddie Mac to cover future LOSSES. http://online.wsj.com/article/SB10001424052748703278604574624681873427574.html On Christmas Eve, when most Americans' minds were on other things, the Treasury Department announced that it was removing the $400 billion cap from what the administration believes will be necessary to keep Fannie Mae and Freddie Mac solvent. This action confirms that the decade-long congressional failure to more closely regulate these two government-sponsored enterprises (GSEs) will rank for U.S. taxpayers as one of the worst policy disasters in our history. Fannie and Freddie's congressional sponsors—some of whom are now leading the administration's effort to "reform" the financial system—have a lot to answer for. Rep. Barney Frank (D., Mass.), chairman of the House Financial Services Committee, sponsored legislation adopted in 2008 that established a new regulatory structure for the GSEs. But by then it was far too late. The GSEs had begun buying risky loans in 1993 to meet the "affordable housing" requirements established under congressional direction by the Department of Housing and Urban Development (HUD). Most of the damage was done from 2005 through 2007, when Fannie and Freddie were binging on risky mortgages. Back then, Mr. Frank was the bartender, denying that there was any cause for concern, and claiming that he wanted to "roll the dice" on subsidized housing support. http://online.wsj.com/article/SB10001424052748704381604575005242824023092.html The Congressional Budget Office has reiterated its support for bringing the companies onto the federal budget—and onto the government books—which would effectively mean accounting for their operations in the federal budget as if they were federal agencies. "Recent events clearly indicate a strengthening of the federal government's commitment to the obligations of Fannie Mae and Freddie Mac," the CBO said in a report.......................A Treasury official said the administration had no plans to alter how it accounts for Fannie and Freddie in the federal budget. "I don't anticipate any change," said Assistant Treasury Secretary Michael Barr. "They'll have the same appearance that they've had before in the budget books." A spokesman for the White House Office of Management and Budget declined to comment.

Public Comments

1. Yep. The 5 year subprime mortgage loans are due to expire this year.
2. The commercial loans and fannie and freddie has almost unlimited funds to buy more, And we have ole barney frank and chris dodd to thank.