BREAK OUT THE POPCORN AND WATCH THIS MOVIE by John McLeod
Debt In The Afternoon (2005)
starring GSE guru Peter Wallison as THE MATADOR
costarring S&P bond analyst Mike DeStefano as THE BULL
with special guest Bert Ely as THE PICADOR
Kidding aside, the 2 hour 8 minute long February 3, 2005 panel discussion with real title Receivership Powers: What Are They and Should Fannie and Freddie’s Regulator Have Them? remained for several weeks after the event the American Enterprise Institute’s most popular video download. It featured an all-star cast of academics and financial policy analysts. Considering the venue, keep in mind the possibility of a right wing slant. The panelists were aware of a huge concentration of US mortgage risk in the two biggest US housing GSEs, Fannie Mae and Freddie Mac. They exchanged views on how these monster enterprises might be wound up should they ever fail. Several explored prospects for the US Government evading the implicit guarantee that the two companies will always be bailed out by Congress, especially with regard to their senior agency debt.
The bursting housing bubble is threatening to send a wave of defaults toward the mortgage finance system. This video gives us an inside look at how some of the best experts in the field were preparing for the impact a year and a half ago.
