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Phil Gramm’s link to the Freddie and Fannie takeover September 15, 2008

Posted by trouble97018 in Corruption, Economy, McCain, News, Politics.

TPM Cafe

On April 3, 2008, Michael Greenberger explained on Fresh Air (starting at about 4:19) how a little noticed or understood bill called the Commodity Futures Moderinization Act, introduced by Phil Gramm and ushered through congress as it was recessing for Christmas in Dec 2000, allowed banks to place bets on their own mortgages and credit lines and then list the bets themselves as assets.

Instead of these bets being placed through a regular hedge fund, however, the law allowed them to use “offbook” entities called structured investment vehicles.  So, when the banks started losing money not only from their mortgage investments, but from the bets they had made on them, they could postpone posting the full extent of their losses on their accounting sheets.  Greenberger thinks that when these losses do finally start appearing on the books it will cause a cascading financial crisis bigger than the mortgage crisis itself.  Source Article



1. trouble97018 - September 15, 2008

This creep can also be connected to the Enron debacle, and the skyrocketing price of oil. Look it up! One more reason to make sure McHoover doesn’t get into the White House. Graham would be the Treasury Secretary!


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