Turns out that even those supposedly terrified by a Fiat "Deficit" are in reality just fine with any amount of fiat spending ... to directly fund anyone EXCEPT the Middle Class.
The eternal jostling at the pig trough, to hoard our still increasing Public Initiative.*
[Cross posted from John Lounsbury, at GEI]
Mortgage funds appear to be drying up. Bove says that banks are not finding it profitable to originate mortgages with record low interest rates. The FHFA (Federal Housing Finance Agency), which operates the government mortgage banks Fannie Mae and Freddie Mac, has been weakening the mortgage underwriting rules imposed in 2010 and the years following. This includes reversing the plan to reduce Fannie and Freddie participation in the mortgage market with the goal of reducing their activity to zero by 2018 and easing the qualification requirements for mortgages to accept lower credit scores and reduce down payments to 3%.
Bove says the following about the possible return to losses for Fannie and Freddie or, alternatively, tightening of the underwriting rules for mortgages and the return to the plan for Fannie and Freddie to withdraw from the mortgage market:
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* Public Initiative = Fiat Spending = An arbitrarily defined accounting "Deficit"
Dick Bove: There's a new mortgage crisis brewing***
[Cross posted from John Lounsbury, at GEI]
Mortgage funds appear to be drying up. Bove says that banks are not finding it profitable to originate mortgages with record low interest rates. The FHFA (Federal Housing Finance Agency), which operates the government mortgage banks Fannie Mae and Freddie Mac, has been weakening the mortgage underwriting rules imposed in 2010 and the years following. This includes reversing the plan to reduce Fannie and Freddie participation in the mortgage market with the goal of reducing their activity to zero by 2018 and easing the qualification requirements for mortgages to accept lower credit scores and reduce down payments to 3%.
Bove says the following about the possible return to losses for Fannie and Freddie or, alternatively, tightening of the underwriting rules for mortgages and the return to the plan for Fannie and Freddie to withdraw from the mortgage market:
"Now some people are beginning to get concerned. They are worried that taxpayers may be forced to provide Fannie and Freddie with more cash. They fear more large losses could be reported by these companies.
Moreover, the people who take a close look at the balance sheets of Fannie and Freddie see that their equity is disappearing in payments to the U.S. Treasury while their guaranteed book of loans is growing. These people are beginning to understand that Fannie and Freddie are building the debt obligations of the United States government and no one is stopping them; certainly not Congress who is looking benignly on.
The dilemma is: If the policymakers stop the growth of Fannie and Freddie, they will stop the growth of housing. If they do not stop the growth, Fannie and Freddie will increase the debt obligations of the United States." D. BoveWhatever happens the housing market for the U.S. is headed for trouble again, according to Bove, and the mortgage market (or actually the lack of a mortgage market) will be at the bottom of it. For the past 2-3 years Keith Jurow has been tracking local housing markets throughout the U.S. and has repeatedly warned that the housing "recovery" was actually no such thing. In fact he is concerned about all aspects of real estate. See here, here and here.
***
* Public Initiative = Fiat Spending = An arbitrarily defined accounting "Deficit"
(which = currency creation; it's what currency issuers DO)
Ask not for whom the currency is created.
It's created for ... your masters? Or for you?
