Sunday, December 14, 2008

60 Minutes Puff Piece on Barney Frank

What a puff piece 60 Minutes had on Barney Frank tonight. (

If Lesley Stahl thinks Frank is the "smartest guy in Congress" then we're all in a lot of trouble.

The report skimmed over his role in the Freddie Mac/Fannie Mae debacle.

Frank, the Chair of the House Financial Services Committee, predicted this should all be in over in about a year. Just like he said Freddie and Fannie were financially sound.

However, the following segment covered by Scott Pelley asked if there would be second much larger mortgage disaster with the anticipated default of Alt A and Option Arm loans. These loans had begun with lower "teaser" interest rates for a finite period before the rates were reset. Hello default city.

Sean Egan, of Egan-Jones Ratings Company, argues the bottom hasn't yet fallen out and the large number of defaults will lead to a glut of surplus housing in the market. Egan said the situation is one that is "not going to be resolved in a short period of time. It's not gonna take six months. It's not gonna take 12 months. We're looking at probably three, four, five years, before this overhang is worked through." (

So who do you think has a better read on the economy? Barney Frank or Sean Egan? My money, what little of it I have, is on Egan.

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