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HomeThings You May Have Missed
Posted by Larry Doyle on February 20th, 2009 5:20 PM |
While there is tremendous volatility in the markets and commensurate anxiety as a result, there were some major stories and developments that got less play but deserved more.
Allow me to expound. Robert Shiller, a highly distinguished Economics Professor at Yale Univeristy and co-designer of the Case-Shiller Home Price Index spoke this morning on Bloomberg News. Shiller is the preeminent expert on trends and developments in housing. He made the following assessments:
1. Glad to see that Obama is making an effort to support housing but has serious concerns about the effort.
2. $75 billion allocated for loan modification is not nearly enough to make a truly meaningful impact. (remember there is another $200 billion allocated for Freddie and Fannie to refinance mortgages).
3. No plan or proposal for those holding Jumbo mortgages leaves a large part of the market without benefits. Those homes will likely hang over the market.
(more…)
Tags: Bloomberg News, Case-Shiller Index, Robert Shiller
Posted in American Consumers, Australia, Bad Bank, Bank Nationalization, Bank of America, Banking Institutions, Barack Obama, Christopher Dodd, Citigroup, Economic Stimulus, Fannie Mae, Freddie Mac, General, Housing Crisis, Mortgage Crisis, Mortgages, Nouril Roubini, Stimulus Plan, Tim Geithner | No Comments »
Housing and Responsibility
Posted by Larry Doyle on February 19th, 2009 6:00 AM |
President Barack Obama presented an overview of his plans to support the housing market yesterday. Obama highlighted the government would utilize the following methods to support those homeowners in default or close to foreclosure:
1. Support is only provided to those homeowners occupying the residence. No support for speculators or developers.
2. The government will increase the portfolios of Freddie Mac and Fannie Mae to purchase mortgages that are refinanced. These portfolios are currently sink holes swallowing billions in taxpayer funds given irresponsible management and pathetic risk management over the last 15 years.
3. The government will work with and incent mortgage servicers to rewrite mortgages to 31% of income for these homeowners. (more…)
Posted in Abortion, American Consumers, Barack Obama, Current Affairs, Economy, Fannie Mae, Franklin Raines, Freddie Mac, General, Housing Crisis, Jamie Dimon, JP Morgan, Mortgage Cram-Down, Mortgage Crisis, Mortgages, Real Estate | No Comments »
“Mr. Raines Returns to Washington….”
Posted by Larry Doyle on December 12th, 2008 1:35 PM |
In the midst of the economic turmoil, the Obama transition, the “rescue” of the domestic auto industry, and the Blagojevich fiasco, the biggest story of all in terms of “$$$” is getting limited coverage in the media, but not here at NQ!!
The core of the global economic meltdown is centered on our domestic housing market and the core of that market is centered on Freddie Mac and Fannie Mae.
It is a shame that the Congressional hearing of the four senior executives (Richard Syron and Leland Brendsel of Freddie Mac and Daniel Mudd and Franklin Raines of Fannie Mae) is not front and center on every media outlet in our country.
It is also a shame that the respective heads of the Congressional Banking Committees are not heavily involved in these hearings. Those individuals, Barney Frank and Chris Dodd, along with their colleague, Chuck Schumer should not only be compelled to question these executives, but they themselves should be compelled to be questioned by their colleagues.
Read here as to how “Fannie, Freddie Executives Knew of Risks….” The fact that the executives “generally dodged demands by committee members that they accept blame for those problems” is the height of shamelessness and hypocrisy.
How I wish that we had real statesmen in Washington who had the courage to question these individuals on the following points, which were highlighted here on October 16 in a piece entitled “A Wall St. Insider’s View of Freddie/Fannie.” (more…)
Tags: Franklin Raines of Fannie Mae, Mudd and Raines of Fannie Mae testify to Congress, problems at Freddie and Fannie, Syron and Brendsel testify to Congress
Posted in Barney Frank, Christopher Dodd, Chuck Schumer, Congress, Current Affairs, Economy, Fannie Mae, Franklin Raines, Freddie Mac | 1 Comment »
A Wall St. Insider’s View of Freddie/Fannie
Posted by Larry Doyle on October 16th, 2008 6:00 AM |
I am happy to provide you with a full accounting of what occurred from the late ’90s to the present.
–The repeal of Glass-Stegall (GLBA) is a total non-event in the midst of the current economic turmoil. What this repeal did was allow commercial banks to get more deeply involved with investment banking activities. Thus, JP Morgan, Citigroup, Bank of America were able to utilize their significant balance sheets and capital bases to become a force on Wall Street. Fast forward ten years and it is those institutions that are now thankfully supporting and bailing out our system.
–Throughout the 90s and into the early part of this century, Freddie Mac and Fannie Mae were utilizing their significant lobbying power to gain an ever increasing portion of the overall U.S. mortgage market. They had the enormous advantage of being able to borrow at just marginally over U.S, government rates given the “implied” but not explicit backing of Uncle Sam. I mean, come on. That worst case scenario could never come to pass!!
While Freddie and Fannie were designed to provide liquidity to the market in the form of bundling mortgages into securities, charging a guarantee fee for return of principal to the investors in these MBS, and then selling the MBS into the private market, they decided to “grow their business”. Just how did they grow? Given their ability to borrow at very cheap rates they decided to effectively grow their own internal portfolios. This business model was nothing more than a massively levered hedge fund under the guise of “helping the homowner”. (more…)
Tags: advantages of Freddie Mac and Fannie Mae business model, collapse of Freddie Mac and Fannie Mae, costs and benefits of Freddie Mac and Fannie Mae, did Freddie Mac and Fannie Mae benefit homeowners?, Dodd, Fannie Mae and Ginnie Mae?, FM Watch, Frank support for Freddie Mac and Fannie Mae, Franklin Raines, Freddie Mac and Fannie Mae accounting problems, Freddie Mac and Fannie Mae difference from Ginnie Mae, Freddie Mac and Fannie Mae's downfall and decline, growth of Freddie Mac and Fannie Mae, how did freddie Mac and fannie Mae get so large, Jim Johnson of Fannie Mae, Leland Brendsel of Freddie Mac, private profit and social loss at freddie Mac and Fannie Maen, Schumer, Senator Richard Baker (R-LA), systemic risks with Freddie Mac and Fannie Mae, Tim Howard, Wall Street insider's view of Freddie and Fannie, what happened at Freddie Mac and Fannie Mae?, who challenged Freddie Mac and Fannie Maemc
Posted in American Consumers, Bank of America, Christopher Dodd, Current Affairs, Economy, Fannie Mae, Freddie Mac, Ginnie mae, Home Loan, Housing Crisis, JP Morgan | 3 Comments »
