[dagheti]

What is the source of this? If you look at http://en.wikipedia.org/wiki/Subprime_crisis_impact_timeline and search for subprime you'll see many cases of Freddie and Fannie buying or guaranteeing subprime activity.

- In 2000 Fannie buys $600 million, and Freddie buys $18.6 billion, and guarantees 7.7 billion more. - 2002-2006 the GSE's buy 38-90 billion a year in subprime mortagages

As far back as 1999 you can find stories stating that Fannie was being pressured into subprime:

http://www.nytimes.com/1999/09/30/business/fannie-mae-eases-...

Their activity appears smaller than the market at large, but it's not non-existant. It doesn't seem on face value that they were not allowed to invest. Is there some rule I am missing?

[hristov]

It seems I was wrong about that. But still their activity was just a small part of the market at large and they only bought the safest tranches. Saying they were responsible for the mess is just wrong, imo.