I think if one observes closely the the fact that the scale of the vertical axes are very different, one may very well have an altered perspective on the role of the GSE's in the mortgage crisis.
In other words, it was the private market's fault. Really?
First, bad English. Second, Fannie and Freddie had "reached more than 80% of market share" this year.
.01 x .80 = .008
.05 x .20 = .010
So: the Government Sponsored Enterprises broke 0.8% of the market, while private enterprise broke 1%. Clearly, a marvelous Victory for Socialism!
So, I take it the U.S. government will simply repudiate the debts of Fannie and Freddie without the embarrassment reserved to the peons in the private sector? And without the threat, needless to say, of jail time for those whose malfeasance crossed the line to outright fraud?
No one treated Lehman Bros paper (stock) as reserves nearly as credible as T-bills. The big investment houses have died from owning Fannie and Freddie paper: stock and the ubiquitous Mortgage Backed Securities.
In little words, Lehman Bros and Bear, Stearns owned Fannie and Freddie securities. Fannie and Freddie owned no paper from Lehman, Bear or other banks or investment houses. Both are now bankrupt. Do the math.
The best evidence of the coming recession.