| 00:00:00 | ARE MANY PEOPLE WHO HAVE ARCGUED AND WRITTEN THAT THE G. |
| 00:00:09 | S.E.'S CAUSED THE FINANCIAL CRISIS OR GREAT RECESSION. |
| 00:00:13 | AS BOB GLAUBER INDICATED, I WAS NOT AT FREDDIE MAC UNTIL WAY AFTER THE FINANCIAL CRISIS SO I DON'T REALLY HAVE A STAKE IN THIS GAME. |
| 00:00:23 | BUT THIS IS A CHART THAT I WOULD LOOK AT TO SORT OF DETERMINE TO WHAT EXTENT I THAUTOUGHT FREDDIE MAC AND FANNIE MAE CAUSED THE CRISIS. |
| 00:00:33 | AND I'M NOT SAYING -- PERHAPS WE WILL FIND LATER SOME CONTRIBUTION. |
| 00:00:37 | BUT DO YOU THINK THEY CAUSED IT. |
| 00:00:40 | AND THIS CHART LOOKS AT MARKET SHARES. |
| 00:00:43 | THE MARKET SHARE OF THE G. |
| 00:00:47 | S.E.'S IS AT THE TOP. |
| 00:00:50 | AND IT IS THAT BLUE LINE. |
| 00:00:52 | AND THEN THE REDDISH LINE AT THE BOTTOM AND GETS VERY HIGH IN 2005 AND 2007 IS THE PRIVATE MARKET. |
| 00:01:00 | THE PRIVATE SECONDARY MORTGAGE MARKET. |
| 00:01:02 | SO, THIS IS THE INVESTMENT BANKS AND COMMERCIAL BANKS ISSUING SECONDARY M. |
| 00:01:11 | B.S. SECURITIES, PRIVATE LABEL SECURITIES WE CALL THEM. |
| 00:01:15 | LOOK AT THAT RADICAL MARKET SHARE CHANGE. |
| 00:01:20 | FREDDIE MAC AND FANNIE MAE GOING FROM ON THE ORDER OF 75% DOWN TO 40%, FULLING LIKE A ROCK. |
| 00:01:30 | THE PRIVATE LABEL TAKING A TREMENDOUS SHARE. |
| 00:01:33 | WHAT WOULD BE THE CAUSE OF THAT? |
| 00:01:36 | CAUSE, IN MY VIEW, IS A CHANGE IN UNDERWRITING STANDARDS. |
| 00:01:42 | A CHANGE FROM REQUIRING SUBSTANTIAL DOCUMENTATION AND HIGH UNDERWRITING STANDARDS OF LARGE DOWN PAYMENTS, MANY OF THE PRIVATE CAPITAL COMPETITORS REDUCED SOME OF THOSE STANDARDS AND WERE ABLE TO TAKE SUBSTANTIAL MARKET SHARE. |
| 00:02:00 | NOW IMAGINE YOU ARE THE C. |
| 00:02:03 | E.O. OF FREDDIE MAC AT THE BOTTOM MARKET SHARE NUMBER, 40%. |
| 00:02:10 | YOU HAVE SEEN YOUR MARKET SHARE FOR THE TWO G. |
| 00:02:12 | S.E.'S GO FROM 75% TO 40%. |
| 00:02:15 | DO YOU REACT OR NOT? |
| 00:02:17 | DO YOU CHANGE YOUR UNDERWRITING STANDARDS? |
| 00:02:21 | HOW MUCH CAN YOU TOLERATE IN TERMS OF MARKET SHARE LOSS? |
| 00:02:25 | AS THE C. |
| 00:02:27 | E.O. OF FREDDIE MAC I HAD 5,000 OR 6,000 EMPLOYEES. |
| 00:02:31 | IT LOOKS LIKE THE ENTIRE MARKET IS GOING AWAY FROM ME. |
| 00:02:34 | DO I CHANGE OR NOT? |
| 00:02:36 | I THINK THAT THE C. |
| 00:02:39 | E.O.'S, THE PEOPLE RUNNING THE COMPANY, DID MAKE SOME CHANGES. |
| 00:02:43 | AND WE EACH CAN MAKE OUR JUDGMENT ABOUT WHAT WE WOULD HAVE DONE IN THAT POSITION. |
| 00:02:47 | BUT I WOULD AT LEAST ARGUE IT IS A HARD CALL. |
| 00:02:50 | IT WOULD NOT BE EASY TO BE UNCHANGED IN TERMS OF YOUR REQUIREMENTS ON DOWN PAYMENT, UNDERWRITING STANDARDS AND HAVE THAT MARKET SHARE GO COMPLETELY AWAY LIKE THAT. |
| 00:03:05 | THIS IS ANOTHER INDICATION OF, I BELIEVE, WHETHER OR NOT FREDDIE MAC WAS THE CAUSE OF THE FINANCIAL CRISIS. |
| 00:03:18 | WE ARE LOOKING AT MORTGAGE DEFAULT RATES OVER TIME. |
| 00:03:22 | THE DID HE EVER NATION OF DEFAULT IS 90 DAYS DELINQUENT. |
| 00:03:28 | YOU CAN SEE THAT AT FREDDIE MAC AND FANNIE MAE AT THE WORST OUR DELINQUENCY RATE GOT UP IN THE 4% TO 5% ZONE. |
| 00:03:41 | FOR THE OVERALL MORTGAGE MARKET IN OUR COUNTRY IT GOT TO BE 10%. |
| 00:03:46 | FOR THE SUBPRIME SECTOR OF THE MARKET IT GOT UP TO BE 25%. |
| 00:03:53 | SO, AGAIN WHILE I BELIEVE THAT FREDDIE MAC AND FANNIE MAE DID LOWER THEIR STANDARDS, LOOK AT THE RESULTING DELINQUENCY RATES. |
| 00:04:02 | I THINK THAT YOU CAN SEE A BIG DIFFERENCE 2010 THE WAY FREDDIE MAC AND FANNIE MAE BEHAVED AND THE REST OF THE INDUSTRY DID. |
| 00:04:13 | THE WAY FREDDIE MAC AND FANNIE MAE BEHAVED AND THE REST OF THE INDUSTRY DID. |
| 00:04:17 | THE WAY FREDDIE MAC AND FANNIE MAE BEHAVED AND THE REST OF THE INDUSTRY DID. |
| 00:04:20 | THE WAY FREDDIE MAC AND FANNIE MAE BEHAVED AND THE REST OF THE INDUSTRY DID. |
| 00:04:23 | THE WAY FREDDIE MAC AND FANNIE MAE BEHAVED AND THE REST OF THE INDUSTRY DID. |
| 00:04:25 | B THE WAY FREDDIE MAC AND FANNIE MAE BEHAVED AND THE REST OF THE INDUSTRY DID. |
| 00:04:28 | E THE WAY FREDDIE MAC AND FANNIE MAE BEHAVED AND THE REST OF THE INDUSTRY DID. |
| 00:04:30 | T THE WAY FREDDIE MAC AND FANNIE MAE BEHAVED AND THE REST OF THE INDUSTRY DID. |
| 00:04:33 | W THE WAY FREDDIE MAC AND FANNIE MAE BEHAVED AND THE REST OF THE INDUSTRY DID. |
| 00:04:35 | E THE WAY FREDDIE MAC AND FANNIE MAE BEHAVED AND THE REST OF THE INDUSTRY DID. |
| 00:04:38 | E THE WAY FREDDIE MAC AND FANNIE MAE BEHAVED AND THE REST OF THE INDUSTRY DID. |
| 00:04:41 | N THE WAY FREDDIE MAC AND FANNIE MAE BEHAVED AND THE REST OF THE INDUSTRY DID. |
| 00:04:43 | SO, I DON'T BELIEVE THAT THE TWO G. |
| 00:04:45 | S.E.'S WERE THE CAUSE OF THE FINANCIAL CRISIS. |
| 00:04:46 | I DO THINK THEY DID REDUCE UNDERWRITING STANDARDS. |
| 00:04:47 | BUT I THINK I CAN UNDERSTAND AS A C. |
| 00:04:49 | E.O. WHY YOU MIGHT HAVE DONE THAT GIVEN WHAT THE COMPETITION WAS DOING. |
| 00:04:51 | I DO THINK THERE WERE SOME MISTAKES AND PROBLEMS MADE THAT WERE CONNECTED TO THE G. |
| 00:04:54 | S.E.'S, AND CERTAINLY ONE THAT I FOUND TROUBLING WAS SUM RETAILED IN A BOOK -- SUMMARIZED IN A BOOK CALLED "RECKLESS ENDANGERMENT" WHICH IS A STORY OF CRONY CAPITAL ISM CAPITALISM EXHIBITED BY THE TWO G. |
| 00:05:01 | S.E.'S. I VIEW THAT BOOK ALMOST AS A PLAYBOOK ON HOW BUSINESSES CAN EXECUTE CRONY CAPITALISM AND GET CLOSE TO GOVERNMENT FOR THEIR BENEFIT BENEFIT, NOT JUST AN INCREDIBLE LOBBYING ORGANIZATION, NOT JUST MASSIVE CAMPAIGN CONTRIBUTIONS, BUT THINGS LIKE HIRING REPEATEDLY PEOPLE COMING OUT OF GOVERNMENT, OPENING REGIONAL OFFICES IN ALL OF THE CRITICAL CONGRESSIONAL OFFICES AND HIRING RELATIVES OF CONGRESSMEN IN ORDER TO FILL THOSE REGIONAL OFFICES. |
| 00:05:43 | SO, TO BE SURE, SOME OF THE CRITICISM THAT GRETCHEN MORGANSON OFFERS IS ACCURATE. |
| 00:05:51 | A SECOND PROBLEM WAS THE IMPLIED GOVERNMENT GUARANTEE. |
| 00:05:54 | THIS WAS NOT SOMETHING THAT NECESSARILY WAS GENERATED BY THE G. |
| 00:06:02 | S. G.S.E.'S BUT THEY TOOK ADVANTAGE OF IT. |
| 00:06:03 | BUT WHAT THEY WERE ABLE TO DO BECAUSE OF THE IMPLIED GOVERNMENT QUESTION WAS BORROW ESSENTIALLY AS MUCH MONEY AS THEY WANTED TO AT THE GOVERNMENT RATE. |
| 00:06:14 | SO, UNLIKE MOST PRIVATE COMPANIES, WHEN YOU PUT ON MORE AND MORE DEBT THE RATE GOES UP. |
| 00:06:20 | THEY WERE ABLE TO BORROW ALMOST UN UNLIMITED AMOUNTS AT THE GOVERNMENT RATE AND CREATE A RETAINED PORTFOLIO WHICH SOME PEOPLE HAD DESCRIBED AS A HEDGE FUND BECAUSE ONE WAS ABLE TO ARBITRAGE THE DIFFERENCE 2010 THE GOVERNMENT RATE AND THE RATE THEY USED TO BUY IN SOME CASES PRIVATE LABEL SECURITIES. |
| 00:06:43 | 010 THE GOVERNMENT RATE AND THE RATE THEY USED TO BUY IN SOME CASES PRIVATE LABEL SECURITIES. |
| 00:06:47 | 10 THE GOVERNMENT RATE AND THE RATE THEY USED TO BUY IN SOME CASES PRIVATE LABEL SECURITIES. |
| 00:06:51 | 0 THE GOVERNMENT RATE AND THE RATE THEY USED TO BUY IN SOME CASES PRIVATE LABEL SECURITIES. |
| 00:06:54 | THE GOVERNMENT RATE AND THE RATE THEY USED TO BUY IN SOME CASES PRIVATE LABEL SECURITIES. |
| 00:06:57 | B THE GOVERNMENT RATE AND THE RATE THEY USED TO BUY IN SOME CASES PRIVATE LABEL SECURITIES. |
| 00:07:00 | E THE GOVERNMENT RATE AND THE RATE THEY |
Loading...