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Friday, July 17, 2009

In 2005 the government knew the housing bust was coming!

[I]n America, the citizens are increasingly turning to their government to fix the mess that the country is in. But the irony here is that the our friends on the Hill knew exactly where this speeding train was heading…and let it just keep right on going, turning a blind eye to wreck that would inevitably occur.

As our own Addison Wiggin recently told an interviewer, “The House of Representatives did an investigation in 2005, following a paper that was published on their own website, showing that the derivatives risk that both Fannie Mae and Freddie Mac had exposed themselves to was potentially a disaster for the mortgage market.

“And they buried that paper, and fired the guy who wrote it. So, they were well aware of what was going on in 2005, but the market for mortgage-backed securities continued for two more years.

“They [the government] could have put the breaks on there.”
-- from "This Too Shall Pop" by Bill Bonner

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