ohreally

Historic Financial Collapse Underway?

Peter Stansberry writes:
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Whether we like to admit it or not, the entire market for housing in the United States has been corrupted by government involvement. By subsidizing the availability of credit and by granting huge tax incentives to home speculators, the government helped finance the biggest bubble of all – the biggest bubble in history. It won't be unwound without serious disruptions to our economy and, unfortunately, a tremendous amount of pain.

Fannie Mae and Freddie Mac made it all possible. Released from capital-ratio requirements and backed with a line of credit at the Treasury, they were able to buy a nearly unlimited amount of mortgages. Today, Freddie or Fannie finance more than 80% of all new mortgages in the United States. Over the last several decades, their presence in the market greatly lowered interest rates, created an endless supply of credit, and pushed housing prices higher. Meanwhile, the cost of the government guarantee, which lay behind Fannie and Freddie's power, was invisible.
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The above statement either comes from another planet, is insane, or is just an out right fabrication.

The mortgage bubble was created by unregulated Wall Street Securization by firms like Bear Stearns of toxic mortgages originated by firms like Countrywide.

Fannie and Freddie were pushed aside and locked out of this fools party by the Federal Government, which leashed the GSEs in favor of letting Wall Street, Countrywide and Indymac run wild. These firms no longer exist.

In the vast bulk of their business, Fannie and Freddie did not back subprime or LTV greater than 80% except in relatively microscopic ammounts. The numbers of exotic mortages are under 10% of all segments of their business, not to mention their exotics were of higher quality because they retained basic underwriting standards compared to the Countrywides and Indymacs.

As of Freddies most recent numbers, they had .77% non performing mortages.

This is why right now, while mindless bashers howl like fools, the GSEs are the ONE source of liquidity propping up the housing market. IF the GSEs were not performing this service today, the housing market would be 10 times worse off, as the reduced but still significant buyers we now have would be shut entirely out of the market for lack of mortgage availability.

Compare what is being written about the GSEs with the actual reality,and draw your own conclusions.

One other thing. This article was published on SUNDAY MORNING and ALREADY HAS 35+ comments within minutes ALL AGREEING WITH ITS ABSURD ASSERTIONS. Think about that! Also there seem to be comments predating the article post date?

The article is not even well thought out. It was only in July 08 that this person realized the financials were under stress? Where was he when Countrywide and Bear Stearns fell? This guy just wrote an article about the mortgage/housing boom bust WITHOUT MENTIONING BEARS STEARNS, WALL STREET, COUNTRYWIDE OR INDYMAC!!!!!

Historic Financial Collapse Underway?

Peter Stansberry writes:
______________________...
Whether we like to admit it or not, the entire market for housing in the United States has been corrupted by government involvement. By subsidizing the availability of credit and by granting huge tax incentives to home speculators, the government helped finance the biggest bubble of all – the biggest bubble in history. It won't be unwound without serious disruptions to our economy and, unfortunately, a tremendous amount of pain.

Fannie Mae and Freddie Mac made it all possible. Released from capital-ratio requirements and backed with a line of credit at the Treasury, they were able to buy a nearly unlimited amount of mortgages. Today, Freddie or Fannie finance more than 80% of all new mortgages in the United States. Over the last several decades, their presence in the market greatly lowered interest rates, created an endless supply of credit, and pushed housing prices higher. Meanwhile, the cost of the government guarantee, which lay behind Fannie and Freddie's power, was invisible.
______________________...

The above statement either comes from another planet, is insane, or is just an out right fabrication.

The mortgage bubble was created by unreguated Wall St Securization by firms like Bear Stearns of loans originated by firms like Countrywide.

Fannie and Freddie were pushed aside and locked out of this fools party by the federal Government, which leashed the GSEs in favor of letting Wall St, Countrywide and Indymac run wild. Thes firms no longer exist.

In the vast bulk of their business, Fannie and Freddie did not back subprime or LTV greater than 80% except in relatively microscopic ammounts. They numbers of exotic mortages are under 10% of all segments of their business, not to mention their exotics were of higher quality because they retained their underwriting standards compared to the Countrywides and Indymacs.

As of Freddies most recent numbers, they had .77% non performing mortages.

This is why right now, while mindless bashers howl ike fools, the GSEs are the ONE source of liquidity propping up the housing market. IF the GSEs were not performing this service today, the housing market would be 10 times worse off, as the reduced but still significant buyers we now have would be shut entirely out of the market.

Compare what is being written about the GSEs with the actual reality,and draw your own conclusions.

One other thing. This article was published on SUNDAY MORNING and ALREADY HAS 35+ comments within minutes ALL AGREEING WITH ITS ABSURD ASSERTIONS. Think about that!

The article is not even well thought out. It was only in July 08 that this person realized the financials were under stress? Where was he when Countrywide and Bear Stearns fell?