In this issue

Jonathan Tobin: Defending the Right to a Jewish State

Heather Hale: Compliment your kids without giving them big heads

Megan Shauri: 10 ways you are ruining your own happiness

Carolyn Bigda: 8 Best Dividend Stocks for 2015

Kiplinger's Personal Finance editors: 7 Things You Didn't Know About Paying Off Student Loans

Samantha Olson: The Crucial Mistake 55% Of Parents Are Making At Their Baby's Bedtime

Densie Well, Ph.D., R.D. Open your eyes to yellow vegetables

The Kosher Gourmet by Megan Gordon With its colorful cache of purples and oranges and reds, COLLARD GREEN SLAW is a marvelous mood booster --- not to mention just downright delish
April 18, 2014

Rabbi Yonason Goldson: Clarifying one of the greatest philosophical conundrums in theology

Caroline B. Glick: The disappearance of US will

Megan Wallgren: 10 things I've learned from my teenagers

Lizette Borreli: Green Tea Boosts Brain Power, May Help Treat Dementia

John Ericson: Trying hard to be 'positive' but never succeeding? Blame Your Brain

The Kosher Gourmet by Julie Rothman Almondy, flourless torta del re (Italian king's cake), has royal roots, is simple to make, . . . but devour it because it's simply delicious

April 14, 2014

Rabbi Dr Naftali Brawer: Passover frees us from the tyranny of time

Greg Crosby: Passing Over Religion

Eric Schulzke: First degree: How America really recovered from a murder epidemic

Georgia Lee: When love is not enough: Teaching your kids about the realities of adult relationships

Cameron Huddleston: Freebies for Your Lawn and Garden

Gordon Pape: How you can tell if your financial adviser is setting you up for potential ruin

Dana Dovey: Up to 500,000 people die each year from hepatitis C-related liver disease. New Treatment Has Over 90% Success Rate

Justin Caba: Eating Watermelon Can Help Control High Blood Pressure

The Kosher Gourmet by Joshua E. London and Lou Marmon Don't dare pass over these Pesach picks for Manischewitz!

April 11, 2014

Rabbi Hillel Goldberg: Silence is much more than golden

Caroline B. Glick: Forgetting freedom at Passover

Susan Swann: How to value a child for who he is, not just what he does

Cameron Huddleston: 7 Financial Tasks You Should Tackle Right Now

Sandra Block and Lisa Gerstner: How to Profit From Your Passion

Susan Scutti: A Simple Blood Test Might Soon Diagnose Cancer

Chris Weller: Have A Slow Metabolism? Let Science Speed It Up For You

The Kosher Gourmet by Diane Rossen Worthington Whitefish Terrine: A French take on gefilte fish

April 9, 2014

Jonathan Tobin: Why Did Kerry Lie About Israeli Blame?

Samuel G. Freedman: A resolution 70 years later for a father's unsettling legacy of ashes from Dachau

Jessica Ivins: A resolution 70 years later for a father's unsettling legacy of ashes from Dachau

Kim Giles: Asking for help is not weakness

Kathy Kristof and Barbara Hoch Marcus: 7 Great Growth Israeli Stocks

Matthew Mientka: How Beans, Peas, And Chickpeas Cleanse Bad Cholesterol and Lowers Risk of Heart Disease

Sabrina Bachai: 5 At-Home Treatments For Headaches

The Kosher Gourmet by Daniel Neman Have yourself a matzo ball: The secrets bubby never told you and recipes she could have never imagined

April 8, 2014

Lori Nawyn: At Your Wit's End and Back: Finding Peace

Susan B. Garland and Rachel L. Sheedy: Strategies Married Couples Can Use to Boost Benefits

David Muhlbaum: Smart Tax Deductions Non-Itemizers Can Claim

Jill Weisenberger, M.S., R.D.N., C.D.E : Before You Lose Your Mental Edge

Dana Dovey: Coffee Drinkers Rejoice! Your Cup Of Joe Can Prevent Death From Liver Disease

Chris Weller: Electric 'Thinking Cap' Puts Your Brain Power Into High Gear

The Kosher Gourmet by Marlene Parrish A gift of hazelnuts keeps giving --- for a variety of nutty recipes: Entree, side, soup, dessert

April 4, 2014

Rabbi David Gutterman: The Word for Nothing Means Everything

Charles Krauthammer: Kerry's folly, Chapter 3

Amy Peterson: A life of love: How to build lasting relationships with your children

John Ericson: Older Women: Save Your Heart, Prevent Stroke Don't Drink Diet

John Ericson: Why 50 million Americans will still have spring allergies after taking meds

Cameron Huddleston: Best and Worst Buys of April 2014

Stacy Rapacon: Great Mutual Funds for Young Investors

Sarah Boesveld: Teacher keeps promise to mail thousands of former students letters written by their past selves

The Kosher Gourmet by Sharon Thompson Anyone can make a salad, you say. But can they make a great salad? (SECRETS, TESTED TECHNIQUES + 4 RECIPES, INCLUDING DRESSINGS)

April 2, 2014

Paul Greenberg: Death and joy in the spring

Dan Barry: Should South Carolina Jews be forced to maintain this chimney built by Germans serving the Nazis?

Mayra Bitsko: Save me! An alien took over my child's personality

Frank Clayton: Get happy: 20 scientifically proven happiness activities

Susan Scutti: It's Genetic! Obesity and the 'Carb Breakdown' Gene

Lecia Bushak: Why Hand Sanitizer May Actually Harm Your Health

Stacy Rapacon: Great Funds You Can Own for $500 or Less

Cameron Huddleston: 7 Ways to Save on Home Decor

The Kosher Gourmet by Steve Petusevsky Exploring ingredients as edible-stuffed containers (TWO RECIPES + TIPS & TECHINQUES)

Jewish World Review July 22, 2008 / 19 Tamuz 5768

Fannie, Freddie & the Daybed

By Tom Purcell

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http://www.JewishWorldReview.com | The whole mortgage mess reminds me of the daybed incident.

Maybe I better explain.

One day, my next-door neighbor arrived home with a daybed from Ikea. The one-piece bed was built of solid wood and covered in a fine upholstery.

Three neighbors and I offered to help him get it upstairs. As we hashed over strategies, the daybed owner became consumed with doubt.

"I don't think there's enough room to get it up the stairwell," he said.

"There's plenty of room!" we lied.

We were eager, as fellows often are — particularly since our stairwell and daybed weren't at risk — to see if we could accomplish an obviously impossible task.

We were soon shoving the bed through the narrow space, causing the wood frame beneath the upholstery to tear as it scraped the plaster.

"It won't fit," said the daybed owner. "I should return it."

"It's too late," said another neighbor. "We've torn the fabric. Ikea won't take it back now."

And so we resumed shoving the bed and scraping the plaster as we slowly ascended the stairs. As we attempted to navigate a 90-degree turn into the upstairs hallway, the daybed became impossibly wedged against the walls and ceiling.

"Let's knock a hole in the wall," said another neighbor, unable to conceal his enthusiasm.

"Knock a what?" said the daybed owner.

"A hole! It will provide clearance!"

The first hole provided clearance, too. We were so inspired that, three holes later, we were finally able to shove the daybed, by then mangled and badly damaged, into the hallway.

Which brings us back to the mortgage crisis — and government intervention.

During the Depression years, as part of the New Deal, FDR created the Federal Housing Administration. The FHA established rigid guidelines to minimize risk (believe it or not, people used to need good credit and regular paychecks to get approved) and essentially took on the risk that lenders otherwise would have had to shoulder. Mortgage terms became much more affordable and middle-class folks were able to buy homes.

So far so good.

To pump liquidity into the mortgage marketplace, FDR also established Fannie Mae (Federal National Mortgage Association) and Freddie Mac (Federal Home Loan Mortgage Corporation); both have since become quasi-government organizations.

Here's how they work: After a lender originates a mortgage, Fannie or Freddie buy it, freeing up cash for the lender to issue other loans (they currently own nearly half of all mortgages in America). Fannie and Freddie then package the loans into bundles and sell them to investors.

So long as housing values continued to rise and people didn't default on their mortgages, everybody was happy — banks originated loans, Fannie and Freddie bought them and their investors were paid returns on their investments.

But housing values have fallen drastically in some regions and folks are defaulting on their mortgages — in part BECAUSE of Fannie and Freddie.

You see, values have fallen drastically because they were inflated unnaturally. They were inflated unnaturally because ANYONE with a heartbeat could get a gimmicky loan.

Anyone could get a gimmicky loan because lenders knew Fannie and Freddie would purchase virtually any loan they originated — even the risky subprime loans.

Fannie and Freddie would purchase subprime loans because Congress persuaded them to — it's not fair to leave out folks with bad credit and job histories, after all.

And Fannie and Freddie were happy to do as Congress asked because everybody knew Congress — even though no laws mandated it — would bail them out if things went sour.

And now that things have gone sour — now that lax regulatory oversight let a woefully undercapitalized Fannie and Freddie run free — many politicians see only one solution: MORE government promises, subsidies and bailouts.

To wit: taxpayers must bail out fools who took on gimmicky loans they couldn't afford — and the bigger fools who gave them loans — because they, and our muddle-headed Congress, got us in so deep there's no turning back now.

I sure hope our economy pulls through this mess better than the daybed did.

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© 2008, Tom Purcell