Wednesday, September 17, 2008

Barak Obama's Fannie May/Freddie Mac Connection

Anyone who's bothered to review FEC Campaign Finance reports in the last thirty days has probably noticed what I have:

Barak Obama has received more than $400,000 in donations from Fannie May.

So as Obama attacks John McCain and Republican policies for the failures of Fannie May, Freddie Mac and Lehman (amongst others) it's important to do one thing:


Obama has $400,000 reasons to deflect criticism away from himself and onto John McCain. 

What's more important however, is that Lehman Brother's collapse can be traced directly back to Fannie Mae & Freddie Mac's collapse. 

Lehman was highly leveraged in two markets: subprime mortgages, and oil hedge funds.  Where did Lehman buy these poorly securitized mortgages from?  None other than Fannie & Freddie. 

As the subprime mortgage market collapsed out from underneath them, rising oil prices were there to offset Lehman's losses.  But now that the oil bu bble has "popped" and Lehman's highly leveraged "liquidity" evaporated out from underneath them.

The same thing has now happened to AIG, and is about to cause WaMu a whole world of hurt.

So as Obama rails against John McCain and Republican Parties, remember two things:

First, John McCain introduced legislation in 2005 to reform Fannie May & Freddie Mac to avert this very problem.

Second, Barak Hussein Obama has a less than zero interest in actually reforming Fannie & Freddie.  Again, he has $400,000 reasons not to do it. 

Pretty impressive for a junior Senator with less than 4 years in the U.S. Senate to be the #2 recipient of Fannie May & Freddie Mac campaign contributions.

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