From an interesting piece (found via Ed's blog) reacting to the Republican reaction to the Financial Crisis Commission's findings:
After 20 years of free-market fervor, the world of the mid-’00s had become one of overleveraged banks too big to regulate and trillions of dollars worth of derivatives bets that no one had track of — which in turn were helping to accelerate huge flows of capital coming in from abroad — and a Fed and government regulators who weren’t aware or weren’t watching.
And that was the real cause of the crisis, whose aftereffects continue to drag on the economy today. Fannie and Freddie were, like almost every other big player, both culprits and victims, but just two of many.
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Befuddled 
Check out the writings of one of the Republican defectors from the inquiry commission:
http://www.ritholtz.com/blog/2010/12/dogma-versus-reality/
In 2004 he said Fannie wasn’t doing enough, now he says they were the cause of the crash.
Here’s more: http://www.calculatedriskblog.com/2010/12/tanta-on-fannie-freddie-and-bubble.html
To many that saw things as they were happening, the re-writing of history is deeply troubling. Mainly because if you don’t see where the mistakes were, you’ll make them again.
The worst hit housing bubble areas were rife with investors buying homes. Those loans weren’t fannie loans, and had nothing to do with expanding homeownership. They were pure gambles that didn’t pan out. That is one reason the Triad’s home values have been relatively stable – very little speculative purchasing of homes.
Very good points Jim and thanks for the links. And I wonder why Im getting more and more cynical…
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