Comment: You were on top of it and saw right through it.

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You were on top of it and saw right through it.

Do you remember when Fannie and Freddie had their accounting scandals in 2004? I thought for sure that would be the end. I always looked at those two GSE’s as quasi central banks. Lenders or last resort in the mortgage market. Well there was a meeting that took place on April 28, 2004 that basically was the reason the torch of the housing bubble was passed from the GSE’s to the Investment banks. The regulators signed off on changing the capital restriction that took the banks from being leverage about 12 to 1 to …..well Bears Stearns liquidated at 35 to 1. I never thought I would see something like that. But they had to keep the “growth” going or when the tide went out…..it was going to expose everyone.