While this statement raises many questions -or should at least-, it’s also very clear in a way: it’s all you need to know about current American politics. This becomes all the more poignant when you realize that no-one lifted even one finger in protest. Given the impact of the policy, not to mention the amount of money involved in executing it, that is amazing. Not in the least because it has the potential to throw the country into a deep dark pit, from which it may not arise for many years to come, if ever.
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And here we return to Obama’s statement about lifting home values. Why would a government want to get involved in any such thing? Isn’t Fannie and Freddie’s objective, for instance, to make homes affordable for everyone? Why then try to lift the prices, which runs counter to this objective?
Here’s why: the government, make that you, the people, owns a huge chunk of the mortgage debt. Not only do the GSE’s have $5.5 trillion “worth” on their books, the Federal Reserve has bought trillions “worth” of MBS securities over the past 18 months or so. If Washington allows real estate prices to fall back to the trendline they were on little more than a decade ago, a mammoth amount of additional federal losses would become glaringly obvious to the public. We should add to that the potential pressure from China, Japan and other nations, which hold scores of MBS, to minimize their losses.
And then Obama’s statement, and his policies, become much easier to understand. The administration is caught up in a desperate attempt to keep prices at elevated levels, far above trend levels, because it itself has financed much of the movement towards those high prices, and is presently buying anything for sale just so they don’t keep falling.
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There are dozens of other trends that doom the “lift home values” policy. But the administration, as well as Congress (not a negative word was heard from the GOP on the Obama statement either) have painted themselves into a damp dark corner from which escape will be immensely painful, no matter what they try. In fact, what they actually try to do is pass on the pain to you.
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Troubled times have come. You’re living on borrowed time, and you’re going to be paying a hefty price for borrowing it.
Why is this a surprise Arraya. There have been plenty of posts where the president himself said we have to raise prices of homes. All he is doing is restating what he has always said.
Why is this a surprise Arraya. There have been plenty of posts where the president himself said we have to raise prices of homes. All he is doing is restating what he has always said.
Why is this a surprise Arraya. There have been plenty of posts where the president himself said we have to raise prices of homes. All he is doing is restating what he has always said.
Why is this a surprise Arraya. There have been plenty of posts where the president himself said we have to raise prices of homes. All he is doing is restating what he has always said.
Why is this a surprise Arraya. There have been plenty of posts where the president himself said we have to raise prices of homes. All he is doing is restating what he has always said.
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