SeriousBull

Mum’s still the word on Ginnie Mae Defaults!

Tags: Deficits + Economy + Ginnie Mae + GNMA + Housing Bill + Tax cuts

One would think that the Government National Mortgage Association (GNMA), a direct obligation of the US Treasury, would make the news since we have a financial crisis in the mortgage market and moderate income and sub-prime loans are what Ginnie Mae does.  Yet the traditional media doesn’t (publicly) ask about it, nor does the Fed, the Treasury, the Bush Administration, or

Congress– no one does. Googling “Problem loans at Ginnie Mae” and “Defaults at Ginnie Mae” finds articles from 1989 when defaults in Texas occurred and a single article in the New York Times when Congress last investigated to find lax supervision  that led to similar problems like we have today.

SB finds this incredulous. The losses, while not likely to adversely affect pension plans, mutual fund investors, and sovereign governments (notably China) because they are US government obligations, still are a valuable piece of input in deciding policy.  Let’s face it if the US tax payer owes another couple trillion or so, wouldn’t Congress likely reel-in earmarks and pork barrel spending somewhat more?  Wouldn’t such a greater deficit cause some measure or greater fiscal responsibility even in the Bush Administration? Isn’t it a factor to consider in extending tax cuts?

It certainly raises about the role of the traditional media and free press. Are all these reporters brain dead or screened? Is the press under a gag order?  Is there some threat out there not to disclose the news to the public whose tax dollars will have to pay back the loses?  What ever the case, this is a very mysterious omission. Please someone say why.

June 24, 2008 - Economy, Markets, Politics