“We ALL Caused This Mess??” Hardly. Put me in the camp that says, without an accurate diagnosis, it’s not possible to cure our current economic mess. So, here are two competing narratives explaining how we got to this juncture, both courtesy of Les Leopold (thanks to Ned Krahl for forwarding the Leopold piece): Narrative #1:...Read More
Green Gold? Interesting article in the Sunday NYT about the spiraling cost of bailing out Fannie Mae and Freddie Mac. The article profiles one Phoenix-area Realtor in particular, who sold homes at the peak, and now sells them for Fannie and Freddie after they’ve repossessed them (albeit at dramatically lower prices). But here’s the line...Read More
The Fannie/Freddie Dilemma, Cont. No Government-Sponsored Entity (“GSE”) can serve two masters. –New Testament OK, so that’s not exactly how the Biblical quote goes. But it’s an apt description of the conundrum facing would-be reformers of Fannie Mae and Freddie Mac, the two now-state wards that buy or guarantee a stunning 96% of all U.S....Read More
Legacy Losses — or Fresh Red Ink? If a sweater was 96.5% navy, do you think it would look navy-colored? And if a chocolate bar was 96.5% dark chocolate, could the manufacturer bill it as dark chocolate? And if the chance of precipitation was 96.5% . . . would you carry an umbrella? What’s with...Read More
Strapped Governments Look for “Honey Pots” “Because that’s where the money is.” –bank robber Willie Sutton, explaining why he targeted banksFor the same reason Willie Sutton robbed banks, financially strapped governments (federal and state) inevitably are going to revisit the home mortgage interest deduction as they seek to close record deficits. (Also getting scrutiny: deductions...Read More
“Hands Off My Mortga . . . Oops! Never Mind!” As best I can tell, the tea party movement is angry about out-of-control government intrusion into people’s lives. Apparently, they’re not aware of the following factoid: There were $390 billion in new mortgage origination’s in the last quarter of 2009. Excluding home equity lines, Fannie...Read More
