housing
Posted at 7:52am on Jul. 11, 2008 Rethinking the Goals of a National Mortgage Bailout
An already-ugly problem gets worse
By blackhedd
Front and center this week have been the ill fortunes of Fannie Mae and Freddie Mac, the government-sponsored enterprises (GSEs) that together own trillions of dollars’ worth of US home mortgages.
At this point in time, there really is no reason to own the stock of either company. The Administration is said to be looking carefully at whether and how to do a government takeover of one or both. The grand 35-plus year experiment in semi-public support for US housing may be coming to an end.
But that’s far from the only problem in the mortgage/housing sector. In fact, it may be the easy problem. The hard problem is what to do about all the homeowners that are falling behind on their payments.
This is a time bomb that continues to tick away, and Congress has been working hard to pass a huge bailout bill (the Dodd-Frank Act). President Bush has vowed to veto it, but he’ll break that promise.
But what are the objectives (both political and economic) of this enormously costly legislation? Can it actually meet those objectives? And are they the right objectives in the first place?
Keep reading.
Posted in Dodd-Frank Act | Economy | housing | Mortgage Bailout — Comments (45)/ Email this page » / Read More »
Posted at 8:38am on Apr. 1, 2008 Finally, a Winning Formula at the Federal Reserve?
The Term Securities Lending Facility May Be Working
By blackhedd
As much as I hate to subject you all to this, here's a piece of seriously complex Federal Reserve news. I'll explain it as best I can, however. The bottom line appears to be: it's good news.
You've certainly heard that the Bernanke Fed have been doing unprecendented, aggressive and creative things in their attempts to stabilize financial markets. (To mitigate the effects of a US recession is an entirely different problem, and not the current priority.)
One of the things the Fed did was to set up a Term-Securities Lending Facility, or TSLF. What the heck is that?
It's a weekly auction, to be held every Thursday for the next six months. The Fed will offer liquid, risk-free Treasury securities from its inventory, in return for specific kinds of risk-bearing securities, notably mortgage-backed securities. They just held the first one on March 27, and although the results are not unambiguous, the auction does seem to have had a material positive impact on the money markets.
Keep reading.
Posted in Economy | federal reserve | housing | Mortgage Crisis | Subprime | Term Securities Lending Facility — Comments (18)/ Email this page » / Read More »
Posted at 11:20am on Dec. 26, 2007 The Housing Crisis and Illegal Immigration
By blackhedd
Submitted for your consideration: is the weakness in the housing/construction industries reducing illegal immigration?
This is a connection I haven't seen anyone else make. Instead, the question people are asking is: why isn't unemployment a whole lot worse than it is?
The recently-departed US bubble in residential and commercial real-estate prices understandably touched off a huge boom in overbuilding in many regions of the country. And this activity created a lot of (real) economic activity and growth, just as the Internet bubble did ten years ago.
Posted in Economy | housing | illegal immigration | unemployment — Comments (20) / Email this page » / Read More »
