Fannie, Freddie and the Fed 

14 years later and youre helping people tremendously still! Thank you!!!

Paddy, you're a fantastic teacher. Thank you for your work!

It's strange how you make even the most complex stuff seem so simple. Thanks sir!

Nothing like a good analogy to clarify a fickle and complicated situation. Thanks for this - very informative!

Thank you, Sensei!!

excellent clear concise simple explanation. thank you sir.

Thank you very much Mr. Hirsch. The topics on your videos are very informative and extremely well explained!

You made me want to keep watching. Damn if all teachers were like you. Thanks for being so explicit.

At first I was wondering if I was going to stay interested with the car illustration but very great job bringing it all back around!

Excellent work, Paddy! Thanks for taking the time in instructing us all!

Such great drawing and explanation lol . Love the content and love the teacher.

Thanks so much for the great explanation

THANK YOU for explaining it so perfectly!

Best Video I have seen explaining this. Thank you

Why doesn't the fed go straight to the banks and stop giving all this money to fanny and Freddy. Fanny and Freddy are essentially making profit from the country. Why not loan money straight to the people

Hi Paddy, I've watched a number of your very informative videos, I think that the analogy of Freddie & Fannie selling cars is apt, because it seems that Finance has become something akin to a used-car lot. The name of the game seems to be to securitize debt by putting lipstick on pigs and seeing if someone buys it. Something seem terribly unseemly about the whole process but I'm unable to put my finger on it now. I suspect that it has to do with the people usually involved in these sorts of activities.

Thanks for the excellent work... greetings from Mexico!

14 years ago should have gone viral !

How investors earn from buying MBS? How and what are the returns on MBS?

You sir did perfect job , thank you very much I have so many questions about how brokerage firms work, currently interested in the real estate sector. on an investment stand point and just getting familiar with this sector Ive been reading 10k reports from different business all of which manage securities and real estate properties... any ways thank for this video

good job, but hasn't explained why the demand suddenly dropped?

brilliant. thank you!

so Fannie and Freddie are creating Mortgage backed securities and selling them to investors. But how do investors make money from MBS? and is MBS some kind of insurance? If anyone can answer that i would be very glad.

Your point on Uncle Ben or the Fed buying up the securities and so Banks saying to borrowers they can loan more money because now they can sell their mortgages to Fannie Mae and Freddie Mac. The only problem is that Banks will never reveal their intentions to package and pool the borrowers loans or mortgage debt and sell it to investors or hedge funds. This is the problem with the mortgage industry; the borrowers are the ones who suffer while their mortgages are pooled and packages to investors, financial institutions and banks.

Hey Patty, Its "Good friday" and I am already drinking :)...health to you and thanks for these informative vdo's

Thank you for these!

Watching this in 2020

Awesome!

Why do people buy securities? How do they make money from them? Great videos btw!

Whatever happens, we know it will leave everyone very badly needing a drink

If it was illegal to sell mortgages this would all be avoided, there was enough profit in making loans via the bank, the problem was they wanted all the profit now, that's why they sold them.

Is it just me or did he slip an Obi-Wan reference in there? (5:30)

@theDeckisStacked Yup, if interests are high, eventually everything will go back to normal even thou it could take decades at this point or really high interest (25-35%). Currently, over half the people are not paying the unconstitutional income tax on our wages/labor, with the amount Ben is printing while buying these bad assets in our name and our children's name, hyperinflation would seem extremely likely.

love these videos, keep them up!!!

thank you for the brilliant explanation to a layman

You are brilliant . Nice presentation . Congrats .

Securities cannot be merchandise. Is that the root of the problem?

Haha same endings every time I like it

The banker will give fewer home loans because they’ll stay in the books. 😳😗

i love these videos

Your the best.

I couldn’t understand this…

Why can't Banks and financial institutions make money without the interest or Usury; this is what is destroying people's livelihoods. With all the technological and scientific advancement, we still have to live a system of usury, low or high interest rates, buy things we can't afford on credit and later on life lose our savings and even homes on foreclosures. Inflation and deflation, low or high interest rates, it doesn't matter because as long as we allow to live in a system of interest rates, usury and credit and debt we can never become a free citizens except to work only to pay our bills with interest and credit.

It’s 10 years later, and loans have gone down not up

i just don't get why we need F&F in chain? seems like a middle man that just increases the complexity and siphons off money between the Bank and the end consumer..

always ends up badly......

Government intervention in the free market is never good...

5:00 doesn't fall in demand mean a fall in price?

This is a whitewash on a whiteboard. The analogy is horrible because the FED would never buy cars to profit consumers, like it did with MBS for investors.

Where does the Fed get money to buy these securities? Why did you not say where Ben's money comes from. The Fed prints money by FIAT into existence. This is by its nature inflationary. The crux of the housing crisis, is that consumers took out home loans who did not have the means to be able to service their giant home loans. As a result, home owners defaulted on their mortgages thus causing the the associated risky MBS to drop in price. The big banks levered these MBS and invested in other foolish risky bets. The Fed stepped in and bought the MBS and bad bank loans because the banks were stuck with toxic non performing assets. The Fed bought all these garbage securities that had no value because they were non-performing. The Fed bought the junk in the market which banks were holding. One the junk left the banks books, the banks balance sheets were healthier. The problem now is that the Fed has on its balance sheet 2+ trillion in bad debt MBS which no one wants to buy. The Fed is the problem. The Fed is not the solution or saviour. Banks only approved risky loans knowing that the Fed would ultimately rescue its member banks from their loses.

Wow

It's great learning stuff from De Nito

But wait. Did mortgage rates rise at a higher rate than what is normal for inflation in the past 10 years?

👍🏿🤘🏿

PROMISE YOU GUY THIS YOU PULL A 99 HOMES ON ANYONE AND WE FIND OUT ALL HELL WILL BREAK LOSE SORRY NOT SORRY

I really didnt like this example.

American socialism

Incoherent.