Democrats should boycott his sho...ego trip and when asked why, they should show this clip. At least demand an apology.

Seriously.

"Useless" only in the sense that Frank could not penetrate O'Reilly's lunatic ego.  Otherwise, Frank humiliated O'Reilly--or rather, by refusing to be intimidated, he allowed O'Reilly to humiliate himself.

This should be required viewing on all cable news shows, not just the inevitable clip that will turn up on Olbermann tonight.

Well, the Repugnant Party is going batshit.  Man, I can hardly wait for the second third Presidential candidates' debate.  I bet you the N word will be uttered - if not by POWPOW McCain, then by Hannity or O'Fuckhead.

My respect for Barney F. has declined greatly in view of the revelations about his disastrous intervention to prevent Fan 'n' Fred from going off the rails.

The man owes the nation an apology, if only to show us that he at least understands the central role played in this disaster by his championing of an idiotic policy of promoting 70% home ownership in a nation where more than 50% of households have negative net worth.

Fess up, Barney. You f***ed up, badly. We can't resolve this mess until we come clean about what caused it. You and Andrew Cuomo bear at least as much blame as anyone.

Wait Tep. Barny didn't go out and hand folks houses they couldn't afford. There's nothing wrong with promoting home ownership. Where the problem lies is the relaxing of actual qualification of people able to buy a home. People get wrapped up in owning a home bigger than they can afford under the ruse that they can just borrow whatever amount instead of actually...you know...buying a starter home and moving up after several years. Going out and buying a 3000sf house first time out of the ghetto doesn't work.

Freddy and Fannie suffered from mismanagement for a long time and that as much institutional as it is having lax oversight by the current administration. It's not as if Barny, in a single handed moment, swooped in and saved Fred and Fan from going off the rails. I think his intent along with others on the commerce committee was to keep it on the rails as they revamped oversight and regulations that had gone missing for too long.

Regardless, the current financial situation is a big shit sandwich and a lot of people are going to take bites of this and have to swallow with pride. Barny will need a lot of ketchup for his part.

O'Reilly went over the top and Frank didn't fold.  So, he gets points for that.

Points that matter not a whit in comparison to his enormous complicity and contribution to the disaster we are facing.

The Democrats essentially arm twisted the banks via Fred/Fan to give easy loans.  Once that circumstance was in play, Wall Street packaged these shit loans and sold them around the world at enormous profit for all involved.  Which is why banks around the world were also happy to be complicit.

Now we are all paying for it Big Big Time.

O'Reilly went over the top and Frank didn't fold.  So, he gets points for that.

Points that matter not a whit in comparison to his enormous complicity and contribution to the disaster we are facing.

The Democrats essentially arm twisted the banks via Fred/Fan to give easy loans.  Once that circumstance was in play, Wall Street packaged these shit loans and sold them around the world at enormous profit for all involved.  Which is why banks around the world were also happy to be complicit.

Now we are all paying for it Big Big Time.

Not to change the subject.. But I was really impressed by Obama on his last installment of O'Reilly.  Obama even got him to agree that raising Cap gains from 15 to 20 % is agreeable.

I can actually relate with O'Reilly as I test people I communicate with in the same way.  I will work them up to a point they want to beat the living hell out of me then de-escalate the situation... rinse/repeat.  I actually find the guy kinda refreshing even though I don't agree with most of his views.

The problem for Frank is that you can't throw all of the blame on the party in majority during much of the crisis especially if you are the ranking minority member on a committee that is responsible for Fannie and Freddie's oversight. Being a member of the minority party during much of the crisis doesn't mean you are absolved of any responsibility from trying to correct the situation. Who  does he think he is Jimmy Pearsall.   He  needs to get out his C-Span clips, press clips,  House Financial Services Committee meeting minutes, all billls and legislation he sponsored out showing what he was doing to prevent this from happening. Absent that he should take partial ownership for the crisis we are facing now.

For those who missed Barney's point, let me see if I can restate the problem.

EVERYTHING that contributed to the decline of these two companies occurred before Barney "took control". The majority of the sub-prime mortgages that were issued occurred in the years 2000-2006, and its these bad mortgages which are at the heart of the problem. If you'll remember, there was already significant concern for these two institutions, including talks of bailouts, during the 2004 presidential election. If you don't remember it, like me, google it; it's there, I was reading it two weeks ago. By the time Barney came in, it was already TOO LATE to prevent the implosion; there was too much build-up from the previous 6 years of mismanagement.

On the other hand, Barney has been incredibly effective and proactive is working to reduce the magnitude of the eruption that would result from these institutions imploding by addressing some of the weaknesses which resulted in the situation he inherited. The simple fact that there was any recourse at all, and that there is a light at the end of this insolvency tunnel, is a testament to Barney's capabilities.

O'Reilly is trying to pretend like the years 2000-2006 never happened, so that he can blame one or more democrats for the problems of today, and save his precious (precocious?) economic ideology.

Being a member of the minority party in the House pretty much absolves you of any responsibility for anything the House does, except in certain bizarre exceptions (like Pelosi's idiotic trust in the Republicans to pass the first bailout bill for her).

TNR did an article about it about three or four years ago, highlighting Chris Van Hollen of MD and his immense frustration as a freshman minority member, learning slow and painfully that being in the minority means that you simply have no power. The House is not the Senate, where everything functions by consensus. In the House, the Speaker (and the party-line Rules Committee) sets the agenda, decrees what bills come to the floor, if a bill can be amended, who can talk, who can't, everything. If you are not in the majority, you're damn lucky if anything you propose can even come to a vote, let alone pass.

I had the good fortune to intern for Mr. Frank a while back, and sat through a few markup hearings in the Judiciary Committee (before he gave up that seat to take the Chairmanship of Financial Services). Every amendment was objected to and voted on on a party-line basis. The minority members got to introduce amendments in committee, explain why the amendments would be a good idea for a moment, watch them get voted down, and that was the end of their participation in the legislative process. Mr. Frank spoke up vocally, intelligently, and often humorously, but the outcomes were never in doubt.

After Democrats regained the majority, as Spinks says above, he's been as proactive as possible trying to repair the damage the Republicans have been doing for year after nightmarish year.

(Also, having seen him up close, let me say that a coward is the farthest thing from what this man is. I wish most members of Congress were half as responsible as he, let alone as expert.)

What is an appropriate level of home ownership in a deficit-ridden nation in which perhaps 50% of the households have negative net worth? 40%? 45%?

Certainly not 70%. In fact, no one with even a basic understanding of economics would argue that pushing for anything north of 60% was other than a grossly negligent-- criminal, really-- public policy.

The more you learn more about our elected officials' behavior and actions regarding this train wreck, the more appalled you are by the level of mind-boggling economic ignorance. Even Barney Frank, whom I used to admire, pushed for this insane policy of shoveling hundreds of billions in loans at people who never had a prayer of repaying them.

Barney Frank's incompetence and mendacity in this matter is really shocking. The only conclusion is that we have a systemic problem, ie that our political class is incompetent and corrupt.

Time for a new party, one that requires every one of its candidates for office to have a decent understanding of financial markets and basic credit analysis.

Fannie and Freddie were not the cause of this financial crisis. That is a canard put out by republicans in order to shift the blame away from themselves to the democrats, many of whom supported fannie mae and freddie mac. To anyone who has bothered to look at the agency's portfolio and write-downs it would become apparent that it was their massive and voluntary increase in purchases of ALT-A mortgages that led to their downfall. For those unfamiliar, ALT-As are non-conforming mortgages that have a higher credit typically than subprime. These purchases were done in-the-market from investment banks. They did this in order to increase their own profitability. Fannie and Freddie were effectively toast by last year when the housing market starting its interminable decline. But again, Fannie and Freddie are a casualty not a cause.

The real problem is that investment banks and commercial banks loaded up on residential and commercial mortgage exposure through the warehousing of CDOs, SIVs, commercial mortgage-backed securities, ALT-As etc etc. This has led to a series of writedowns of these assets by these banks that, in turn, has led to a capital deficient and thus over-leveraged banking system. The problem is that the risk across all of these institutions is similar and all are in the same position so there is really no one to sell this stuff except the government. This has led to cash-hoarding by banks, worried depositors leading to more cash-exodus and more cash-hoarding, cut-backs in credit etc etc.

The dismantling of Glass-Steagall was much more significant to this crisis and is the reason why it has touched main street.

More idiocy: the supposed social benefit of 70% home ownership was, we were told, greater stability for both families and their communities. Instead, over the last decade we have seen an orgy of house-flipping, house-hopping, speculators buying houses and renting them out to here-today, gone-tomorrow transients, spec construction of millions of crap units in exurbs. And of course, far greater INSTABILITY for anyone entering this distorted, vastly overpriced market for the first time during this period.

So this foolish and ruinous policy didn't achieve even its purported social objectives! And we're still viewing it architects as brave and brilliant experts?

Enough. Time for a new party. Pox on both your f***ing corrupt and incompetent houses.

Please remember GSpinks and Janus - Tep's answer to everything is the awfulness of Democrats in general or specific Democrats if they are in any way attached to an issue.  Check it out, its as reliable as Big Ben.  Phil Gram and Co, the deregulation mania since 1980?  Nah, they are REPUBLICANS - that stuff doesn't count, only the fact that Barney Frank run a commitee - and respected by all involved for it - for two years matters.

Janus - you are lucky to have worked with such a brilliant man, especially under such trying circumstances. I envy you, he's such a gift to this party and this country.  

As you probably already know, Barney Frank is deeply respected in financial adademia and in the economics world, as well as by most house Republicans for his flexible, knowledgable and truly bipartisan chairmanship of this commitee.  He's been a voice of calm, knowledge, reason and humor from Day 1.  Thank You Barney Frank.

Nice try, Pintar, but the Alt-As were enthusiastically taken up by F 'n' F and their congressional enablers for _exactly the same reason_ that F 'n' F plunged into subprimes: to expand home ownership to low- or middle-income people who otherwise would not have qualified.

Again, the root of the problem is a deliberate effort in Washington to suspend normal rules of prudent lending so that tens of millions of Americans could get mortgages they didn't deserve, on terms almost guaranteed to blow them up in the event of an economic downturn.

Good intentions, no question. But shockingly, and perhaps criminally, incompetent actions.

Wandrey - what do you think is an appropriate level of home ownership in this country? What does your husband the economist think?

"The dismantling of Glass-Steagall was much more significant to this crisis and is the reason why it has touched main street."

Bingo - Phil Gramm wrote the Bill and Our Bill signed it.  An enternal shame to the third-wayers forever more.

Also, credit default swaps anyone?  SIV's?  

Also, get your facts somewhat minimally straight Tep.  

First of all, Fannie paid off and hired countless bigshot Republicans too - McCain's guy was getting paid until 30 days ago, he should be in jail.  

Second, subprimes were never part of Fannies balance sheet until Countrywide - the inventor - tanked and the feds put a gun to Fannie's head and said "Say! Do we have a deal for you. You wouldn't mind parking these are your balance sheet for awhile, right?"  Again: NO SUBPRIMES ON FANNIE'S BALANCE SHEET UNTIL THEN.  

Third: the biggest problems were caused by the wanna be rich, not the sub-primes.  The jerks with the 1997 BMW's who hadn't gotten the promotions in life that they wanted so decided to buy a 5000 square foot McMansions because after all, they deserved it.  

This is what our kids will pay for far more than the waitress who overextended herself.  These foreclosed McMansions are making perfect crack houses these days.

This foremost is the fault of our culture of narcissism, greed and materialism. Barney Frank doesn't fall in to that too comfortably anywhere, but he's there now doing his best to address this intelligently - no one knows what will work.  Not one human being on the planet.  

My husband is a Quaker Scotsman. He is disgusted.  

To imagine that he left a job many years ago as a health economist to take a job at Fannie Mae because he was vaguely idealistic (and needed to support us as a growing family).  It embarrasses him.

He hasn't worked for an American bank in years. He does business with them and is nothing but respectful towards those that deserve respect, but he has no sentimentality whatsoever.  I was much more sad than he was at all the closings (I just cared about the people losing their jobs). His only comments "These were unregulatable toxins on this society and good riddance.  Maybe we'll all grow up now.  Morning in America is so done."  He's very Scottish, OK?

He sees almost no value in home ownership, hence we've never owned one until last year when we bought a broken down hut in PA around the corner from our inlaws for almost nothing.  

He has thought the whole "American Dream = owning a home =  a scam for many years.  We live beneath  the radar because that's how we were both raised - showing off and debt were the highest sins (that and bigotry).  

To be clear: he has no problem with deritaives and swaps - it's the entirely predicatble misuse of them that is the problem.  Had they remained strictly regulated, they would have remained just a tool in the toolkit, nothing extravagant, devoid of any mora charge at all.

Wall Street and markets are emotional but morally nuetral places. Money flows like water into empty pockets. If something is closed off, the water will simply drain to another spot.  There are no morals to that.  That's why we have regulation.  To strengthen us.

That's why WIlliam Donaldson looked frankly ill the entire time he was SEC chairman before the ideolouges scared him off.  He knew that these quacks were ruining the economy and tried to stop it.

So of course they fired him.

So to answer your question Tep: I see no concrete value to homeownership at all - its all myth making and smoke in mirrors.  And I walk the walk, I will gladly rent for the rest of my life.  

"What is an appropriate level of home ownership in a deficit-ridden nation in which perhaps 50% of the households have negative net worth? 40%? 45%?"

100%, as long as the monthly payments of the mortgage do not exceed the income of the buyer. DUH!

"The more you learn more about our elected officials' behavior and actions regarding this train wreck, the more appalled you are by the level of mind-boggling economic ignorance"

Actually, the more I learn about how those elected officials who can be considered experts in the field of economics and finance were ignored (ex B. Frank, D-MA), you mean?

"The only conclusion is that we have a systemic problem, ie that our political class is incompetent and corrupt."

The only conclusion I have so far is that you're a man with a narrative and a penchant for ignoring facts that don't fit the narrative. That is not entirely true, I've also concluded you don't understand much about financial and economic policies.

I will agree with the notion that their is a systemic problem, but from where I am sitting the problem is that Republicans play too many partisan games and happily ignore any Democrat who disagrees with them, regardless of the level of their expertise. I'm sure there've been some Democrats who've played the same game, but we're talking about sub-primes and FM/FM at the moment, and the ruling in this case is against the Reps.

ps. Tep, thanks for making me have to disagree with you, I was worried you were going to talk some sense again :)

Tep, you could not be more incorrect. These were open market purchases and had nothing to do with their quotas for low income housing. The write-offs for low income housing were only slightly higher than their percentage within the entire portfolio, which was only 1%.

This erroneous charge coming from the right that somehow the low income housing initiative from Fannie and Freddie is the root of the subprime crisis is ridiculous and it shows that these people do not understand the banking industry. One acronym can summarize the housing bubble, the subprime boom, the abuse of housing lending and now the financial crisis: CDO. This had nothing to do with Fannie or Freddie. Perversely it was the restrictions put on the growth of the fannie and freddie portfolios following their mishaps in 2003-2004 that led to the boom in subprime CDO. Effectively what happened is investment banks structured products backed by subprime loans, tranched them, had the rating-agencies give them a AAA rating due to their structured protection and then sold them off to investors worldwide at a premium to other AAA products. These investors did not care what was behind these products as they yielded slightly more than other AAA products in  low yield environment. The investment banks also did not care about the credit quality of the borrower as they were just structuring the vehicle. The mortgage lender was the 3rd party to get involved and they also did not care and often invited the borrower to lie about his credit or ability to pay as he was just a pipeline to the investment banks. Lehman bought one of these subprime lenders late in the cycle in order to ramp up their production, with obvious disasterous consequences.

I am no apologist for the agencies, trust me. They were run like sh*t even during the housing boom. They had an implicit taxpayer guarantee, which allowed them to finance very cheaply and take hazardous risks. They then paid Raines and Johnson large compensation packages for putting taxpayers' money at risk. But to say that low income borrowers under the fannie and freddie quota program were the cause of this crisis is to not have any idea what transpired during the "housing boom".

Mpintar: " it shows that these people do not understand the banking industry." No, they understand it.  But every crisis needs a scapegoat; and among Rightist, there is no better scapegoat than minorities, meaning blacks, meaning the Uppity Niggerfolk do dared to want to "own" homes, like the Whitefolk, instead of being owned as is their lot.  This is code to rile up the Great White Masses yet again to blame every ill in the US economy on the black folk.  This is Reagan in Mississippi all over again - no wonder the Palin was quoting him.

I don't think it will work this time, but the Repugs will try anything, anything at all.

Pintar - I did not say that "low income borrowers under the fannie and freddie quota program were the cause of this crisis". I said clearly that the cause was the well-intentioned but foolish bipartisan policy of pushing for the highest possible level of home ownership despite Americans' shaky creditworthiness.

Again, the Alt-A market catered to people with below-average credit who otherwise would not have qualified for an affordable mortgage. It was enabled by a relaxation of lending and documentation standards which occurred because of a political consensus that home ownership brought social benefits to the communities in which these borrowers lived and financial benefits to the borrowers themselves (and political benefits to the pols pushing them).

Of course both parties are to blame. No, I don't blame the poor saps who were steered into these contracts. I do however believe that while Wall Streeters' exploitation of these instruments is a proximate cause of our mess, the ULTIMATE cause is a very American, and very damaging, culture of entitlement that leads the electorate and the elected into this dance of (financial) death.

My view is that, unless and until that mentality is exorcised from the US body politic, we will not achieve any real solution to our financial woes.

O'Reilly's debating style is that of a monkey flinging his poo.

Sensible economists on both sides of the ideological isle on NPR have consistently insisted that Fannie and Freddie were fine up until they tried to help out the almost totally non-functioning private mortgage industry and took on the distressed debt from that industry.

Sure, there were 'carpetbaggers' from both parties that took advantage the Freddie/Fannie revolving door.  But an intellectually honest assessment of their operation would agree that loan companies like Countrywide, and their ilk, , that packages this mortgages and sold them on the secondary market with little or no oversight, were the primary culprit here.

Mpintar's explanation of how the subprime market worked is exactly right.  Anyone that argues that this is a two-party problem is simply wrong and wasn't sentient between 1994 and 2006.  As Congressman Frank said several times, there were many attempts by the Democrats to get legislation passed to get tighter oversight for this market.  Conservatives and Republicans are to blame for holding said legislation up.

This issue cannot be dumped on Frank.  And regardless as to whether Bill O'Relly had a point to make, he's an embarrassment to opinion journalism.

"Of course both parties are to blame. No, I don't blame the poor saps who were steered into these contracts. I do however believe that while Wall Streeters' exploitation of these instruments is a proximate cause of our mess, the ULTIMATE cause is a very American, and very damaging, culture of entitlement that leads the electorate and the elected into this dance of (financial) death.

My view is that, unless and until that mentality is exorcised from the US body politic, we will not achieve any real solution to our financial woes."

Ok, now we're talking Tep.  Exactly right.

come on Channy, Repubs have been running around blathering about the ownership society for years. Everyone seems to be ignoring the fact that middle class incomes have stagnated, and Housing prices nationwide have slumped badly. To blame this all on a few people who want to have a house is ridiculous. No, make them remain being renters paying some rich persons mortgage, that makes for a fair society.

I bought a house in China 5 years ago, it quintupled in value. I know full well this won't continue, that a pretty big group of young people are going to get hammered, but I don't know when that will be or how big the slump will be.

But yeah, I can always blame Barney Frank for it.

All I can say is that Billo must one one bad hombre because if he pulled that shit where I grew up and with the guys I knew and still know, he'd have a fight on his hands, irrespective of how tall the bastard is.

I don't watch his wretched show so I cannot say whether or not he pulls this with men who are his physical equal but I have seen him do this a few times on u tube and other sites and it is always with someone who is smaller or less physically impressive. I recall that he tried that with little Geraldo and the shrimp looked like he was going to grab Billo by the neck.

I am impressed with Frank's response and the fact that he didn't let this bully cow him.

With guys like O'Reilly, there is really only one way to deal with him and that is on his own terms and accept the fact that one of you will end up in the hospital...

Most tough guys I know never lose their cool like this and hardly ever try to verbally batter people. This O"Reilly bastard really needs a good, old fashioned, back alley ass kicking....