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Article Artículo

The Revolving Door with the Banks and "Reform" of Fannie and Freddie

Gretchen Morgensen has an excellent piece in the NYT reporting on the revolving door between Wall Street banks and the Obama administration and the lobbying effort to dismantle Fannie Mae and Freddie Mac. These banks hope to be able to take over the business of the two mortgage giants with a system under which the government would guarantee 90 percent of the value of the mortgage backed securities they issued. While the piece does a very good job detailing the financial connections of the individuals behind this push, there are several important points which make the case against "reform" even stronger than presented in the piece.

To start, the piece tells readers:

"For all the problems associated with Fannie and Freddie, some housing experts say, allowing the nation’s largest banks to assume greater control of the mortgage market would most likely increase costs for borrowers."

Actually, just about all housing experts agree that the privatized system would raise costs. Wall Street types get paid more than government employees and shareholders expect a profit. Therefore, we can be pretty safe in assuming a privatized system will have higher costs. The range of estimates in a Washington Post article from last year was that it would increase mortgage interest rates by between 0.5–2.0 percentage points. (I put myself near the bottom of that range.) If the roughly $6 trillion in mortgage debt on Fannie and Freddie's books were all switched to this privatized system, the additional cost would be $30 billion a year, assuming the bottom end of this range. That is more than the federal government spends on the TANF program each year.

Dean Baker / December 07, 2015

Article Artículo

Latin America and the Caribbean

Venezuela

World

Live-Blogging Venezuela’s December 6 Legislative Elections

Update 12:12 AM: President Nicolas Maduro stated in an address that "we accept" the results, as he had pledged he would.

Update: 12:08 AM (December 7, EST): With participation of almost 75 percent, the CNE has announced that the MUD (opposition coalition has won 99 seats, while the pro-government coalition has won 46. Nineteen seats are to be announced.

Update 11:58 PM (EST): CNE announcement of results beginning. Watch live here. CNE President Tibisay Lucena says process was "clean and reliable."

Update 11:31 PM (EST): The CNE is expected to announce results within minutes.

Update 10:42 PM (EST): Venezuela Analysis reports that a CNE official was attacked in Chacao, Miranda state, while trying to enter a voting center, a few hours ago, with people chasing him shouting "kill him, kill him." Watch the video here.

Update 9:46 PM (EST): Stay posted. Official results are expected soon. Meanwhile, social media is abuzz over the opposition's unofficial claims of victory, helping to create a potentially dangerous situation.

Update 9:37 PM (EST): In an earlier press conference, Venezuela's defense minister said that there have been "72 electoral incidents," of which seven were electoral crimes, and seven individuals arrested.

Update 8:53 PM (EST): Venezuela Analysis notes "Opposition leaders such as Henrique Capriles are celebrating their win on Twitter," and Reuters is likewise reporting:

But the celebration is premature, since, as Reuters notes as the CNE has not announced results yet. Such premature announcements are reminiscent of past elections, such as in 2013, when Capriles cried foul and accused the authorities of a plot to rob him of the election even before results were announced.

Also reminiscent of 2013's elections are attacks on social media accounts of people and outlets considered to be chavista.

Update 8:09 PM (EST): Opal Tometi tweeted:

CEPR / December 05, 2015