Moon Kil Woong

Low Home Ownership Rate Hurting the Economy

It is interesting to note that many people who bought their houses on no net down or under 10% and/or took out second mortgages to use their houses as piggy banks can not afford to buy a house even after they sell their existing one. Thus, the author is right in seeing that in fact, home ownership as a % of the population is declining and will be a drag not a boost to the economy as a whole.

As for inflation, it is more a monetary fiscal than an issue about home ownership. The Federal Reserve can cause inflation even without increasing employment or growth.

What REALLY Caused the Mortgage Crisis - And What to Do Now

The banks have grown too lazy and inefficient. Nowadays they won't write a loan unless they can dump it off to Fannie Mae and Freddie Mac meaning they only are good at making sure a loan qualifies for these "private company's" government backed blanket protection. Is this how a market should operate. We have effectively socialized the entire home mortgage market and called it private. In reality, Fannie Mae and Freddie Mac are government institutions operating not for profit but to fulfill some political fantasies at the risk and cost to taxpayers. Until the cancer is cut out from the market our problems will not go away. They may be supressed but they will inevitably just re-emerge again.

The cancellation of implicit government guarantees and the dissolution of Fannie Mae and Freddie Mac have become so prevalent and everpresent that they can't be wiped out instantly without destroying the entire mortgage market. We should face that fact and start forcing banks to address their complete lack of internal loan assesment now so that someday they won't need or want such a institutional crutch again.

Banks should only loan what they want to keep or what they themselves can sell off as securitized bond packages with them being the ultimate counterparty default risk. We don't need frankenbonds anymore that no one can afford to trace and value save by assuming that the taxpayer will pay because Fannie Mae and Freddie Mac packaged them and put a big taxpayer backed sticker on them.

Stocks with the Most Buy and Sell Recommendations

The biggest buy ratings always go to the largest cap companies, the companies most likely to do a stock, bond, or other corporate finance deal, and companies that have a history of good prior performance.

It shows nothing asides from the general behavior of analysts. We can draw the following conclusions about them 1) they like money and don't mind licking corporate boot to get it, 2) they are intimately tied in with corporate finance even though there is suppose to be a Chinese wall separating them, 3) they rely on companies to feed them information thus can't afford to let big companies be dissatisfied with them, 4) they won't stick their necks out to like unfavorable stocks, 5) they rely on herd mentality, 6) they tend to follow trend blindly except when the trend changes (then they like the new trend and claim they are brilliant for following it over the old trend).

Show me a guy who depends 100% on analyst views and I'll show you a guy who underperforms the market 100% of the time.