Uncle Billy Shorthairs

Greenspanism Is Looking Pretty Good

"But so far the real economy in which people make stuff and other people buy it has been remarkably well insulated from panic "

Evidence please.

Did Fannie and Freddie Cause the Mortgage Crisis?

As I've mentioned in other places, and Tanta has explained most clearly, loan originators would game the gse automated underwriting systems. They would massage their loan scenarios until they got an offline approval with limited or no documentation, and only then hit the submit button. Documentation needed? No problem, there are many accounts floating around the internet of "art rooms" at various lenders -- going back to the pioneers Ameriquest -- where counterfeiters would cut and paste documentation at will.

(with apologies to Tanta.. we're not in the same league)

Uncle Longhair, nice to see that there are other thoughtful uncles out there.

Fed Facing a 'Money Trap'

"For example, one year ago, Fed repos plus other loans to commercial banks amounted to just $32bn"

Ricardo, where did you get this number from? Do you know if there's a way to still put together m3 numbers? Is the info still reported by the fed, just not in a consolidated format?

Mortgage Brokers, RIP

Your post belies a lack of knowledge about a small subset of brokers that tried to tilt against our current mortgage windmill.

I started brokering loans back in 2003. Scumbags abounded. I saw a great niche - giving people wholesale "par" rates on loans (no undisclosed ysp), and charging a fully disclosed origination fee. Was one of the first to sign up with an organization that committed to do business this way. Wyswyg brokerage. Moderately successful. Most were very skeptical, and even after consummating loans, people often thought they got a raw deal because they couldn't help but think they could've gotten that 1% loan they kept hearing about on the radio.

Typical broker: useless and very very expensive
Ethical, knowledgeable broker: priceless

There is still room for ethical brokers. Some states require a fiduciary duty from their brokers, but this is difficult to enforce.
What happens when the brokers disappear? People migrate to the online scams like lending tree (who were actually sucking people into their own more expensive products -- not "letting the lenders compete). Other sites abound. Compare rates, they say. Problem is, there is zero relationship between what lenders publish, and what the borrower will ultimately receive. Ethical broker sorts through this b.s. Borrower direct to lenders are lambs to the slaughter. Find a broker that is willing to commit, in writing, their fee, and you will almost invariably get one that will shop apples to apples very effectively. Lenders have *no* fiduciary to their borrowers, and they do *not* need to disclose wholesale rates. Baby is getting tossed with bathwater.