The John Batchelor Show

Sunday 24 March 2013

Air Date: 
March 24, 2013

 

Photo, above:  President Hoover escorting his successor, Franklin D. Roosevelt, to the Capitol in 1933. Courtesy of the Library of Congress.

The Federal National Mortgage Association, commonly known as Fannie Mae, was founded in 1938 during the Great Depression as part of the New Deal. It is a government-sponsored enterprise (GSE), though it has been a publicly traded company since 1968. The corporation's purpose is to expand the secondary mortgage market by securitizing mortgages in the form of mortgage-backed securities (MBS), allowing lenders to reinvest their assets into more lending and in effect increasing the number of lenders in the mortgage market by reducing the reliance on thrifts. When Fannie Mae was established in 1938 by amendments to the National Housing Act after the Great Depression as part of Franklin Delano Roosevelt's New Deal, it was designed to provide local banks with federal money to finance home mortgages in an attempt to raise levels of home ownership and the availability of affordable housing. Fannie Mae created a liquid secondary mortgage market and thereby made it possible for banks and other loan originators to issue more housing loans, primarily by buying Federal Housing Administration (FHA)-insured mortgages. For the first thirty years following its inception, Fannie Mae held a monopoly over the secondary mortgage market.

JOHN BATCHELOR SHOW

Hour One

Sunday 24 March 2013 / Hour 1, Block A: Hunting in the Shadows: The Pursuit of al Qa'ida since 9/11 by Seth G. Jones

Sunday 24 March   2013 / Hour 1, Block B:  Hunting in the Shadows: The Pursuit of al Qa'ida since 9/11 by Seth G. Jones

Sunday 24 March   2013 / Hour 1, Block C: . Hunting in the Shadows: The Pursuit of al Qa'ida since 9/11 by Seth G. Jones

Sunday 24 March   2013 / Hour 1, Block D:  Hunting in the Shadows: The Pursuit of al Qa'ida since 9/11 by Seth G. Jones

Hour Two

Sunday 24 March   2013 / Hour 2, Block A:  . Cubanos in Wisconsin by Silvio Canto Jr. and Gabriel Canto

Sunday 24 March   2013 / Hour 2, Block B:  . Cubanos in Wisconsin by Silvio Canto Jr. and Gabriel Canto

Sunday 24 March   2013 / Hour 2, Block C:  . Castro's Secrets: The CIA and Cuba's Intelligence Machine by Brian Latell

Sunday 24 March   2013 / Hour 2, Block D:   Castro's Secrets: The CIA and Cuba's Intelligence Machine by Brian Latell

Hour Three

Sunday 24 March   2013 / Hour 3, Block A:  The Fateful History of Fannie Mae: New Deal Birth to Mortgage Crisis Fall by James R. Hagerty (1 of 2). How did the U.S. economy get swept up in the madness of an unsustainable home-lending binge? How can we make sure such foolishness doesn’t happen again? The best place to turn for answers is The Fateful History of Fannie Mae, a lucid and meticulously reported book by one of the Wall Street Journal’s ace reporters, James R. Hagerty. His book epitomizes history with a purpose: showing how seventy years of good intentions, inertia and greed combined to create a financial catastrophe like no other.
—George Anders, contributing writer at Forbes magazine and author of The Rare Find

This is an important book that settles once and for all what Fannie Mae’s role was in the mortgage crisis. The problem was recognized as early as the Eisenhower administration, yet no one—neither Democrat nor Republican—managed to head it off. We should study this book, learn from our mistakes and kill the next budding disaster while there is still time.
—Paul Carroll, coauthor of Billion Dollar Lessons.

In a book that is rigorous, complete and well told, Hagerty explains how Fannie Mae evolved from its inconsequential birth during the Great Depression to a massive financial institution whose demise nearly took down the entire global economy.
—Mark Zandi, chief economist, Moody’s Analytics

Sunday 24 March   2013 / Hour 3, Block B:  . The Fateful History of Fannie Mae: New Deal Birth to Mortgage Crisis Fall by James R. Hagerty  (2 of 2)

In 1938, the administration of Franklin Delano Roosevelt created a small agency called Fannie Mae. Intended to make home loans more accessible, the agency was born of the Great Depression and a government desperate to revive housing construction. It was a minor detail of the New Deal, barely recorded by the newspapers of the day.

Over the next seventy years, Fannie Mae evolved into one of the largest financial companies in the world, owned by private shareholders but with its nearly $1 trillion of debt effectively guaranteed by the government. Almost from the beginning, critics repeatedly warned that Fannie was an accident waiting to happen. Then, in 2008, the housing market collapsed. Amid a wave of foreclosures, the company’s capital began to run out, and the U.S. Treasury seized control. From the New Deal to the administration of President Obama, author James R. Hagerty explains this fascinating but little-understood saga. Based on his reporting for the Wall Street Journal, personal research and interviews with executives, regulators and congressional leaders, Hagerty charts the course of Fannie Mae. With The Fateful History of Fannie Mae, he explains the politics, economics and human frailties behind seven decades of missed opportunities to prevent a financial disaster.

Sunday 24 March   2013 / Hour 3, Block C:  . We Got Him!: A Memoir of the Hunt and Capture of Saddam Hussein by Steve Russell

Sunday 24 March   2013 / Hour 3, Block D:   We Got Him!: A Memoir of the Hunt and Capture of Saddam Hussein by Steve Russell

Hour Four

Sunday 24 March   2013 / Hour 4, Block A:  Leak: Why Mark Felt Became Deep Throat by Max Holland

Sunday 24 March   2013 / Hour 4, Block B:  Leak: Why Mark Felt Became Deep Throat by Max Holland

Sunday 24 March   2013 / Hour 4, Block C:  Finding Camlann: A Novel by Sean Pidgeon

Sunday 24 March   2013 / Hour 4, Block D:   Finding Camlann: A Novel by Sean Pidgeon

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