FHA – the next subprime

[patientrenter]

“Well I’m sorry but it was my impression that the unfettered and unregulated market was the one that got us into this mess.”

I think political partisans on one side like to point to govt intervention as the source of all the problems, and partisans from the other side like to point to the lack of govt intervention as the source of all problems.

I think we had a lot of things going on:

1. Excess savings imported into the US from China and some oil exporting countries via US trade deficits with those countries

2. Cowboy activity in the private investment world recycling the extra dollars into high risk debt disguised as AAA debt

3. Baby boomers saving virtually nothing for the last 30 years, but expecting long and luxuriant (and medically expensive) retirements on the back of nothing but asset price inflation, not the production of more goods and services over their working lifetime than they consume

A few well-timed and well-placed actions could have made a big difference. Hitting hard against the whole collapse in home loan underwriting standards would have helped. Yanking the FNM, FRE, FHA etc govt supports from housing finance would have made a real difference. It would help a lot now, too, but we seem to have the stomach only to point at symptoms, or more minor causes. We really don’t want to truly deflate the housing bubble. That would PO the baby boomers, big-time. There’s only one thing that will get people more excited than the chance of getting a free lunch, and that’s the chance they’ll lose a free lunch.

[blahblahblah]

We really don’t want to truly deflate the housing bubble. That would PO the baby boomers, big-time. There’s only one thing that will get people more excited than the chance of getting a free lunch, and that’s the chance they’ll lose a free lunch.

Don’t forget the state governments. What would they do if property taxes suddenly plunged as house values reduced 50%? And don’t forget the banks. What would happen to them if they had to realize 50% losses on their mortgage portolios? The baby boomer homeowners are only a small (and not very influential) part of the pressure to keep home prices high.

Governments seldom get rid of any program or bureau once they have it. When is the last time you saw in the news that the federal government was shutting down some department to save money? The only tool they have is the money printing machine, and they’re going to use it.

[blahblahblah]

We really don’t want to truly deflate the housing bubble. That would PO the baby boomers, big-time. There’s only one thing that will get people more excited than the chance of getting a free lunch, and that’s the chance they’ll lose a free lunch.

Don’t forget the state governments. What would they do if property taxes suddenly plunged as house values reduced 50%? And don’t forget the banks. What would happen to them if they had to realize 50% losses on their mortgage portolios? The baby boomer homeowners are only a small (and not very influential) part of the pressure to keep home prices high.

Governments seldom get rid of any program or bureau once they have it. When is the last time you saw in the news that the federal government was shutting down some department to save money? The only tool they have is the money printing machine, and they’re going to use it.

[blahblahblah]

We really don’t want to truly deflate the housing bubble. That would PO the baby boomers, big-time. There’s only one thing that will get people more excited than the chance of getting a free lunch, and that’s the chance they’ll lose a free lunch.

Don’t forget the state governments. What would they do if property taxes suddenly plunged as house values reduced 50%? And don’t forget the banks. What would happen to them if they had to realize 50% losses on their mortgage portolios? The baby boomer homeowners are only a small (and not very influential) part of the pressure to keep home prices high.

Governments seldom get rid of any program or bureau once they have it. When is the last time you saw in the news that the federal government was shutting down some department to save money? The only tool they have is the money printing machine, and they’re going to use it.

[blahblahblah]

We really don’t want to truly deflate the housing bubble. That would PO the baby boomers, big-time. There’s only one thing that will get people more excited than the chance of getting a free lunch, and that’s the chance they’ll lose a free lunch.

Don’t forget the state governments. What would they do if property taxes suddenly plunged as house values reduced 50%? And don’t forget the banks. What would happen to them if they had to realize 50% losses on their mortgage portolios? The baby boomer homeowners are only a small (and not very influential) part of the pressure to keep home prices high.

Governments seldom get rid of any program or bureau once they have it. When is the last time you saw in the news that the federal government was shutting down some department to save money? The only tool they have is the money printing machine, and they’re going to use it.

[blahblahblah]

We really don’t want to truly deflate the housing bubble. That would PO the baby boomers, big-time. There’s only one thing that will get people more excited than the chance of getting a free lunch, and that’s the chance they’ll lose a free lunch.

Don’t forget the state governments. What would they do if property taxes suddenly plunged as house values reduced 50%? And don’t forget the banks. What would happen to them if they had to realize 50% losses on their mortgage portolios? The baby boomer homeowners are only a small (and not very influential) part of the pressure to keep home prices high.

Governments seldom get rid of any program or bureau once they have it. When is the last time you saw in the news that the federal government was shutting down some department to save money? The only tool they have is the money printing machine, and they’re going to use it.

[patientrenter]

[quote=CONCHO]…..Don’t forget the state governments. What would they do if property taxes suddenly plunged as house values reduced 50%? And don’t forget the banks. What would happen to them if they had to realize 50% losses on their mortgage portolios? The baby boomer homeowners are only a small (and not very influential) part of the pressure to keep home prices high…..[/quote]

Any very powerful and successful political movement (like the movement to keep home prices high) typically depends on two key factors, not just one:

1. A core group of people who have a lot at stake, and a lot of money. They drive the lobbying of the pols.

2. A wide group of voters committed to the cause. Even a stinky rich lobbyist isn’t going to be able to pull off a massive and broad redirection of a dozen Congressional committees and dozens of federal agencies. You need a large group of voters (and journalists etc pandering to them).

[patientrenter]

[quote=CONCHO]…..Don’t forget the state governments. What would they do if property taxes suddenly plunged as house values reduced 50%? And don’t forget the banks. What would happen to them if they had to realize 50% losses on their mortgage portolios? The baby boomer homeowners are only a small (and not very influential) part of the pressure to keep home prices high…..[/quote]

Any very powerful and successful political movement (like the movement to keep home prices high) typically depends on two key factors, not just one:

1. A core group of people who have a lot at stake, and a lot of money. They drive the lobbying of the pols.

2. A wide group of voters committed to the cause. Even a stinky rich lobbyist isn’t going to be able to pull off a massive and broad redirection of a dozen Congressional committees and dozens of federal agencies. You need a large group of voters (and journalists etc pandering to them).

[patientrenter]

[quote=CONCHO]…..Don’t forget the state governments. What would they do if property taxes suddenly plunged as house values reduced 50%? And don’t forget the banks. What would happen to them if they had to realize 50% losses on their mortgage portolios? The baby boomer homeowners are only a small (and not very influential) part of the pressure to keep home prices high…..[/quote]

Any very powerful and successful political movement (like the movement to keep home prices high) typically depends on two key factors, not just one:

1. A core group of people who have a lot at stake, and a lot of money. They drive the lobbying of the pols.

2. A wide group of voters committed to the cause. Even a stinky rich lobbyist isn’t going to be able to pull off a massive and broad redirection of a dozen Congressional committees and dozens of federal agencies. You need a large group of voters (and journalists etc pandering to them).

[patientrenter]

[quote=CONCHO]…..Don’t forget the state governments. What would they do if property taxes suddenly plunged as house values reduced 50%? And don’t forget the banks. What would happen to them if they had to realize 50% losses on their mortgage portolios? The baby boomer homeowners are only a small (and not very influential) part of the pressure to keep home prices high…..[/quote]

Any very powerful and successful political movement (like the movement to keep home prices high) typically depends on two key factors, not just one:

1. A core group of people who have a lot at stake, and a lot of money. They drive the lobbying of the pols.

2. A wide group of voters committed to the cause. Even a stinky rich lobbyist isn’t going to be able to pull off a massive and broad redirection of a dozen Congressional committees and dozens of federal agencies. You need a large group of voters (and journalists etc pandering to them).

[patientrenter]

[quote=CONCHO]…..Don’t forget the state governments. What would they do if property taxes suddenly plunged as house values reduced 50%? And don’t forget the banks. What would happen to them if they had to realize 50% losses on their mortgage portolios? The baby boomer homeowners are only a small (and not very influential) part of the pressure to keep home prices high…..[/quote]

Any very powerful and successful political movement (like the movement to keep home prices high) typically depends on two key factors, not just one:

1. A core group of people who have a lot at stake, and a lot of money. They drive the lobbying of the pols.

2. A wide group of voters committed to the cause. Even a stinky rich lobbyist isn’t going to be able to pull off a massive and broad redirection of a dozen Congressional committees and dozens of federal agencies. You need a large group of voters (and journalists etc pandering to them).

[blahblahblah]

I don’t think politicians worry about delivering on promises to voters one bit, at least at the congressional level. Just look at the re-election rate statistics. If you are a house member in 2008, your re-election chances are 94%. Only 6 in 100 lose their job every four years. They just make promises and then do whatever their lobbyist benefactors want them to afterwards. They know the public will forget all about those broken promises the next time election day rolls around.

Also, I’ve never heard a single politician run on a platform of keeping home prices high. If anything they run on a platform of “increasing home ownership” which is just code for more government backing of loans.

I am not saying this is good, I’m just saying it’s reality.

[blahblahblah]

I don’t think politicians worry about delivering on promises to voters one bit, at least at the congressional level. Just look at the re-election rate statistics. If you are a house member in 2008, your re-election chances are 94%. Only 6 in 100 lose their job every four years. They just make promises and then do whatever their lobbyist benefactors want them to afterwards. They know the public will forget all about those broken promises the next time election day rolls around.

Also, I’ve never heard a single politician run on a platform of keeping home prices high. If anything they run on a platform of “increasing home ownership” which is just code for more government backing of loans.

I am not saying this is good, I’m just saying it’s reality.

[blahblahblah]

I don’t think politicians worry about delivering on promises to voters one bit, at least at the congressional level. Just look at the re-election rate statistics. If you are a house member in 2008, your re-election chances are 94%. Only 6 in 100 lose their job every four years. They just make promises and then do whatever their lobbyist benefactors want them to afterwards. They know the public will forget all about those broken promises the next time election day rolls around.

Also, I’ve never heard a single politician run on a platform of keeping home prices high. If anything they run on a platform of “increasing home ownership” which is just code for more government backing of loans.

I am not saying this is good, I’m just saying it’s reality.

[blahblahblah]

I don’t think politicians worry about delivering on promises to voters one bit, at least at the congressional level. Just look at the re-election rate statistics. If you are a house member in 2008, your re-election chances are 94%. Only 6 in 100 lose their job every four years. They just make promises and then do whatever their lobbyist benefactors want them to afterwards. They know the public will forget all about those broken promises the next time election day rolls around.

Also, I’ve never heard a single politician run on a platform of keeping home prices high. If anything they run on a platform of “increasing home ownership” which is just code for more government backing of loans.

I am not saying this is good, I’m just saying it’s reality.

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