I know I promised some Republican analysis tonight but in the process of debating John Carney over the necessity for the sweep I happened across this little jewel. The Republican analysis will come tomorrow.
In October of 2012, the FHFA found themselves in an awkward predicament. They had to compile the annual “FHFA Updates Projections of Potential Draws for
Fannie Mae and Freddie Mac” Now a key piece of data when drawing up this report is the CASE-SHILLER U.S. NATIONAL HOME PRICE INDEX. If the FHFA were to be honest they would have shown that home prices began rising at the beginning of 2012 as shown in the attached chart (http://research.stlouisfed.org/fred2/series/USCSCOMHPISA)
But interesting enough if you look at Figure 10 on page 13 of the 2012 projections:
You see that the “Current baseline” shows home prices flat/down right through all of 2012 into 2013. The reality was that their “Stronger near-term rebound” projections were, in fact, the reality base-line. This enabled them to give the illusion that the Sweep that had taken effect a month earlier was more justified.
Where this gets even more interesting is when we look at the 2010 “FHFA Updates Projections of Potential Draws for Fannie Mae and Freddie Mac” This was a time when they were not trying to misrepresent the facts so they were honest in their projections. FHFA projections 2010 Take note of Figure 2 on page 5. When you compare their projections in 2010 to the attached chart, you see that their “Current baseline” shows prices exactly as they were.
Who needs discovery when we have the light of truth.I will be updating this post as I gather more information, but I could not wait to share this. Keep the Faith!