Saturday, August 21, 2010

SAR #10233

Our problems have no politically viable solutions.

Debating Society:  The UN is going to meet soon to discuss the question of aid to Pakistan.   Meanwhile 4.6 million Pakistanis are without shelter, drinkable water and other simple basics.  What's to discuss?

The Blues:  Some of the commentariat say the housing market is headed for a “complete and total collapse.”  Citing the increasing rate of mortgage defaults, foreclosures, personal bankruptcies, house repossessions and the dearth of new home construction, the rest of us ask, 'headed'?

Blame Game:  Before w all jump on the 'blame Fannie and Freddie' bandwagon, let's remember that until Wall Street did their fine job with subprime mortgages, Alt-A loans, no money down liars' loans and the rest of the 'free market' bullshit that lead to the greater crash, Fannie and Freddie had worked quite well for nearly 40 years.  But when the greedy bunch got the chance to privatize the GSEs and get them dancing to Wall Street's tune, that's when it all went kaplooie.  The problem is not the original F&F, but the re-invented monster that served only the investors' interests.  Now they'll be blamed and shuttered and Wall Street given a free hand to complete their looting of the US housing market.

Mirabile Dictu!  Most Pennsylvania voters are willing to pay higher motor vehicle license levies and raise taxes on oil companies if the revenue will go to repair the roads, bridges and public transit.  Almost restores one's faith in the public.

Reality Check:  After 9 years of pointless military effort, 60% of Americans – about the same number that didn't want Bush's invasion of Iraq – oppose the Afghanistan war but see no end to the useless endeavor even though the populace wants one now.  Slightly more, 65%, still oppose the war in Iraq. But the leadership pays no attention to the public on these issues, or the wars would not have been started in the first place.

Water Is Still Wet: Nearly 70% of the public think that the rich do not pay enough taxes and thus are in favor of rescinding Bush's tax cuts for the rich.  Works for me.

Porn O'Graph:  Deficits redux.


Anonymous said...

RE: Blame Game

Didn't have anything to do with the Congressional mandate that they make 40% of all loans sub prime loans.

Nah. Couldn't be that.

Charles Kingsley Michaelson, III said...

If you can cite the specific legislation or Congressional resolution that contains “the Congressional mandate that they [Fannie & Freddie] make 40% of all loans sub prime loans” it would be appreciated.

Especially in that F&F public data shows that essentially none of the $1.5 trillion of cratering subprime mortgages were backed by Fannie or Freddie . F&F's annual reports show that as the mortgage/credit mania grew from 2003 through 2006, F&F's share of the market dropped from $2.7 trillion to about $1 trillion. They did not meet F&F's standards.

Anonymous said...

FNMA does not make loans. It buys loans from the originators and securitizes them (bundles them into MBS)and sells the MBS to investors. This frees up the originators' funds so they can make more loans.


Anonymous said...


I stand corrected. Actually, it was the CRA that forced lenders to issue the sub-primes. The GSE's, losing a large share of the market starting in '03, started chasing share and profit. Even Barney Frank is starting to question his support for this activity by GSE's.

Charles Kingsley Michaelson, III said...

I appreciate the acknowledgement.
Yes, the CRA forced lenders to issue the sub-primes and pretty much greed forced F/F to buy them up and securitize them en-mass. (Just whose greed is another discussion.)

I dislike being forced to agree with Big Ben, but I do here. In fact I question any enthusiasm I ever had for F/F and government perpetuation of the great America myth of home ownership for all.