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Market intervention has left investors confused. See link
http://www.safehaven.com/article/33968/market-intervention-has-left-investors-confused
Thanks I guess they hsd to be as biased as possible in a few seconds of video
Fannie/freddie to pay billions to treasury
I hope the video link works. It doesn't on my phone
http://mobile.businessweek.com/videos/2014-05-08/fannie-mae-freddie-mac-to-pay-billions-to-treasury
Fnma/fmcc steady with housing sector
http://www.livetradingnews.com/federal-national-mortgage-otcbbfnma-steady-with-housing-sector-growth-52039.htm#.U4ZRWdFOl0I
Fnma/fmcc unlikely to be privatized this year. See link
http://www.livetradingnews.com/federal-national-mortgage-assctnfnni-me-otcbbfnma-and-federal-home-loan-mortgage-corp-otcbbfmcc-unlikely-to-be-privatized-this-year-51920.htm#.U4ZMl9FOl0I
Business lunch phasing out fannie mae
1 hour of trading and over 4.5 mill. Volume
Here's how to really help families obtain housing | TheHill
http://thehill.com/blogs/congress-blog/economy-budget/207261-heres-how-to-really-help-families-obtain-housing
A Do-Nothing Congress? Well, Pretty Close
MAY 28, 2014
After a burst of legislative activity in the past decade, representatives in the House are now proposing fewer bills.
This House is on track to produce the lowest number of legislative proposals since the Clinton administration. Through mid-May, representatives introduced 18 percent fewer bills compared with the same point in the previous Congress. That’s the largest drop between Congresses in the period beginning in 1995, when Republicans overturned decades of Democratic rule in the House. The number of lawmakers who have introduced at least 25 proposals has fallen by nearly two-thirds compared with the previous Congress. The number who have produced five or fewer pieces of legislation has jumped 81 percent.
The representatives who have introduced little or no legislation come from both parties and are veterans and newcomers alike. Brad Sherman, a Democrat from California, has introduced two bills this Congress. In the previous six years he was responsible for 42. John Mica, a Florida Republican and a high-ranking member of committees with jurisdiction over transportation and government oversight, also has proposed two bills (and two amendments), none since last year. That’s down from 27 bills in the previous Congress.
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The House Considers Fewer Bills
Legislation introduced through May 13 of the second year of each Congress since 1998.
113th
112th
111th
110th
109th
108th
107th
106th
105th
5,454
6,622
7,040
7,670
6,683
5,532
5,621
5,366
4,688
Source: Library of Congress
Political scientists and legislators have several theories on the slowdown. Kristin Kanthak, an associate professor of political science at the University of Pittsburgh, thinks it could be that politicians aren’t seeing any electoral benefit from introducing bills. “It might be that Congress is so unpopular that people are not even running on working in Congress as a reason to re-elect them,” she said. “They might be talking about how they cause problems for the Obama administration or for John Boehner,” the Republican speaker of the House.
Photo
Representative Jeb Hensarling, a Texas Republican and chairman of the House Financial Services Committee, has not introduced any legislation since the 113th Congress began in January 2013. Credit J. Scott Applewhite/Associated Press
“Partly what is going on here is the decline of the committees,” said Representative David Price, a North Carolina Democrat and a former political science professor. Mr. Price has introduced four bills this Congress, down from 15 in the previous one. “The place is much more centralized. There are less active, less autonomous committees.”
The legislative pullback has few starker examples than Jeb Hensarling, a Texas Republican and chairman of the House Financial Services Committee.
The Financial Services committee — which oversees banking, the Federal Reserve and mortgage lending, among other areas — has held hearings and considered bills drafted by others. And Mr. Hensarling has been active in proposing bills that, in particular, address the government-sponsored entities Fannie Mae and Freddie Mac. But he has not proposed any legislation of his own since the 113th Congress began in January 2013, whether related to the financial industry or his Dallas-area district (he has added his name as a co-sponsor of other legislation at least 105 times).
“As a new committee chairman, Representative Hensarling has focused his attention on the Financial Services Committee,” said Sarah Rozier, a spokeswoman for Mr. Hensarling. “As chairman, he has made a decision not to act as the original sponsor for bills under the committee’s jurisdiction and, instead, work his policy priorities with other members.”
In data from the past 20 years, there was no other House committee leader who did not introduce at least one bill in a two-year Congress. But others have also reduced their output. Tom Rooney, a Florida Republican, has proposed only four pieces of legislation in the current Congress after sponsoring 25 and 21 in his first two terms.
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Michael Mahaffey, a spokesman for Mr. Rooney, explained that since he had joined the Appropriations Committee, responsible for setting spending plans, most of his legislative work took place in that committee. Other appropriators, even longtime committee members, have reduced the number of bills they have introduced this Congress.
Washington-watchers love to debate how productive Congress is — or isn’t. None of the measures for calculating productivity are perfect; the number of bills passed doesn’t address the quality of legislation, while days in session doesn’t account for the speed in which some consequential bills are passed or the negotiations that occur when Congress is technically not meeting. Most measures “are prejudiced against literal conservatives,” Ms. Kanthak said. “There are a number of Republicans that see their job as stopping Barack Obama,” rather than passing (or even proposing) laws.
The appropriations process — 13 spending bills that Congress must pass each year — is often the best opportunity for lawmakers to make a mark. Mr. Sherman, the California Democrat, said: “If you’re introducing a bill to pass it or to have it ready to go for something that’s actually going to pass, you’ve got a lot less reason, a lot fewer good shots. Now it’s: I’ve got an idea, how can that be an amendment on an appropriations bill.”
Although bill introductions are not a measurement of legislative productivity, they are necessary. Between 1995 and 2002, as many as 7,000 pieces of legislation were introduced, most of which were bills (there are several types of resolutions as well). Beginning with the 109th Congress in 2005, the final Congress before a new Democratic majority, new legislation topped 9,000, before drifting back down.
Bill introductions in the current Congress are on the level of what they were in 1998 or 2000, signaling that the legislative push that marked the late 2000s is over, at least for now.
“I miss this,” Mr. Price said. “I love that process of taking a bill and seeing it through. But there are other things you can do in this environment to compensate.”
http://www.nytimes.com/2014/05/28/upshot/a-do-nothing-congress-well-pretty-close.html?_r=0
Are Americans Shut Out of the New Housing Market?
http://www.bloomberg.com/video/are-americans-shut-out-of-the-new-housing-market-7DmINydFRvWC0KRm2p9pyg.html
May 28, 2014, 06:04 am
Geithner, Mian and Sufi on the crisis
Read more: http://thehill.com/blogs/pundits-blog/finance/207353-geithner-mian-and-sufi-on-the-crisis-monday-morning-quarterbacking#ixzz330ZvNruA
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Well, it seems that Piketty fever is finally cooling. After two months' lively discussion of Capital in the Twenty-First Century, talk is now turning to two books whose simultaneous publication could not have been better timed.
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Former New York Federal Reserve President and Treasury Secretary Timothy Geithner's Stress Test recounts the heady days of 2008 and after, as the George W. Bush administration and then the Obama administration worked to prevent financial meltdowns from morphing into full macroeconomic catastrophe. He concludes that, apart from the inevitable false starts and missteps that attend any triage, he and his colleagues got things essentially right. Saving the banks quickly was requisite to saving the broader economy permanently.
House of Debt by Atif Mian and Amir Sufi of Princeton University and the University of Chicago, respectively, reads things a bit differently and, to my mind, more sagely. The authors contend that Geithner and colleagues erred mightily in not focusing more on homeowners. Homeowners' post-bubble mortgage debt overhang was a much greater long-term threat to the macroeconomy than was bank failure. It was also, as I and others argued at the time, the ultimate source of bank peril itself. Rescuing homeowners would accordingly have offered a twofer, binding the wounds that the bailouts could but bandage.
As superior to Geithner's take on the crisis as I find Mian and Sufi's to be, I am struck by something that all three of the gentlemen share. That is their tendency to employ the past tense, as though the crisis were safely behind us, and our only concern now were with how to avoid another. As valuable as Geithner's and, especially, Mian and Sufi’s proposals for avoiding a replay might be, any suggestion that we're out of "the 2008 crisis" is seriously in error.
One-fifth of the nation's home loans remain underwater: Their debtors owe more on the loans than their homes are now worth. Another fifth have too little home equity to sell, even when selling would enable their moving to where jobs are. This is little improvement on where we were one, two ... even six years ago.
In what sense is this a continuation of the 2008 crisis? The answer came 80 years ago from one who is possibly the greatest American economist of whom you have never heard: Yale's Irving Fisher. Fisher, whom Mian and Sufi creditably cite but don't adequately credit in my view, lost a fortune in the 1929 crash. He also suffered an embarrassing reputational hit, having publicly observed earlier the same month that stocks had reached a new "permanently high plateau" (1929's eerie prequel to 1999's "new paradigm").
Fisher sought to redeem himself by uncovering the underlying dynamics of the 1920s' paired stock and real estate bubbles and busts (yes, there were both, then as now). He also sought to understand what was prolonging the 1930s depression that followed those busts. The answer in both cases, he found, was the same – private debt.
Fisher developed these findings in his "Debt-Deflation Theory of Great Depressions," which he elaborated both in a journal article in 1933 and in a monograph, Booms and Depressions, the year before. If you read only one more book or article on what we have been through and are still going through, let it be one of these.
Fisher found that the worst bubbles and busts are those mediated by credit and debt. Credit worsens bubbles by enabling speculators to drive prices ever higher — so much so that even non-speculators must borrow ever more heavily to buy. (John Geanakoplos, Yale's latter-day Fisher, has found much the same.)
Debt worsens the busts that then follow these bubbles for reasons that Mian and Sufi now laudably highlight: Fixed debt obligations, which homeowners have no choice but to undertake when prices are driven by speculators, don't drop with asset prices post-crash. Millions are left underwater. Consumer spending thus plummets. Growth and employment thus slow, then go negative. Defaults thus ensue, harming banks and other creditors. Asset prices accordingly plummet yet further, feeding back into the same downward spiral.
This is still happening post-2008. As alluded to above, 10 million households remain underwater. Ten million more have too little equity to sell and then move to where jobs are. Consumer spending by the 40 percent of Americans most likely to spend thus continues to lag, and employment and growth remain sluggish in consequence.
But we also still have it within our power to arrest and reverse this still ongoing crisis.
How? First, we must mandate that government-held Fannie Mae and Freddie Mac write-down their underwater loans — as Geithner, to his great credit, finally called for in 2012. And second, we must employ government's eminent domain authority to purchase the millions of underwater private-label securitized (PLS) loans out of the trusts they are locked in, then write them down as well.
These write-downs will rescue debtors (homeowners) and creditors (banks and investors) alike — they're "win-win" — by preempting near-certain and costly defaults and foreclosures. Yet they cannot be privately done on an adequate scale thanks to dysfunctional securitization contracts that were drafted in haste during the bubble years. (This is why the Home Affordable Modification Program, Geithner's earlier answer to the mortgage crisis, was doomed ab initio. "Incentive" payments to loan servicers can't induce loan modifications when PLS contracts prohibit them.)
I advocated that Fannie, Freddie, and the Federal Housing Authority act in these manners in 2007 through 2009, as it's a job they were meant for and did wonderfully — even profitably — during the New Deal. In more recent years, after giving up on Washington, I have argued that states and cities should act on their own. Some are now doing so — even coordinating in so doing.
I won't rehash the plan's detailed mechanics and fuller rationale here; readers can find that in this New York Fed paper, among other places. Here I'll close simply by emphasizing once more that it both can, and must, still be done. I hope Geithner, Mian and Sufi might join me in making it happen. Only then will the crisis be ended, and our authors' (with others’) preventive proposals well-timed.
Hockett is a professor of law at Cornell University Law School.
Read more: http://thehill.com/blogs/pundits-blog/finance/207353-geithner-mian-and-sufi-on-the-crisis-monday-morning-quarterbacking#ixzz330aJECxh
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Yellen concerned by housing slowdown she has scant power to cure
From The Detroit News: http://www.detroitnews.com/article/20140528/BIZ/305280044#ixzz330YfFA2j
The hesitant housing recovery has surprised and concerned Federal Reserve Chair Janet Yellen and her colleagues at the central bank. It’s not clear how much they can do about it.
While the industry is rebounding from a weather-ravaged first quarter, the pickup will probably fall short of previous projections, according to economists at Goldman Sachs Group Inc. of New York and Macroeconomic Advisers LLC in St. Louis. As a result, they trimmed their forecasts for economic growth in the second half of 2014 to about 3.25 percent from 3.5 percent.
“Housing is a growing worry,” said Macroeconomic Advisers’ senior economist Ben Herzon.
Yellen and many of her colleagues agree. The Fed chair flagged the industry as a risk to the outlook in testimony to Congress on May 7, while Federal Reserve Bank of New York President William C. Dudley said last week he had been surprised by how weak it had been recently. He added that he still expects gross domestic product to “get back on a roughly 3 percent growth trajectory” after stalling in the first quarter.
The trouble from the Fed’s perspective is that many of the forces holding housing back are outside of its control. While the Fed can influence mortgage rates through its conduct of monetary policy, it can’t do much, if anything, to counteract the other causes of faltering demand: lagging household formation, stingy lenders and wary borrowers.
“Mortgage financing is extremely tight,” said Ellen Zentner, senior economist at Morgan Stanley in New York. “And that’s not something the Fed can manipulate.”
The Fed’s ability to affect the supply of housing is even more limited. Builders are complaining about rising costs and an increasing difficulty in hiring skilled workers. They’re also concentrating on developing bigger, higher-priced projects rather than on the starter homes more buyers can afford. And they, too, are plagued by tight credit.
Dennis McConnell’s company is one of them. Before the housing crisis, Healthy House of Georgia built about 10 homes a year in historic districts in Atlanta. He said he’s put up two in the last six years combined, partly because of difficulties in finding financing.
McConnell said he’s resorting to private lenders to make his deals happen. Private sources can range from friends and family and self-financed projects to “hard-money” lenders — “someone who, when you sign the dotted line, you count your fingers and toes and make sure you have them all back.”
“For those poor saps like myself who build a couple houses a year or have a specialty market like mine, funding just became impossible,” he said.
Statistics released last week suggested that the industry is still struggling. While sales of previously owned homes rose for the first time this year in April, they were still some 7 percent lower than a year earlier, according to data from the National Association of Realtors. New single-family house sales last month were 4.2 percent below the year-earlier level, Commerce Department data showed.
“New home sales bounce back to mediocrity,” was how economists Stephanie Karol and Patrick Newport of Lexington, Massachusetts-based IHS Global Insight characterized the numbers in a May 23 email analysis.
Housing stocks have also taken a hit this year. The Standard and Poor’s Supercomposite Homebuilding Index, which includes companies such as Lennar Corp. and PulteGroup Inc., has declined 1.74 percent in 2014, compared with a 3.4 percent gain in the broader S&P 500 Index.
After boosting GDP for 12 straight quarters, residential investment subtracted 0.26 percentage point from growth in the fourth quarter of 2013 and 0.18 point in the first quarter of this year, according to the Commerce Department.
Mortgage-finance company Fannie Mae predicts housing construction will strengthen in the months ahead and lift gross domestic product by 0.2 percentage point this year, said vice president Mark Palim. While that’s only off slightly from last year’s 0.33 point contribution, it’s a third of what Fannie Mae economists were expecting at the start of 2014.
“I think that through the rest of the year, we’ll see an improvement, albeit maybe a little bit slow, but I do think that we’re on the right track,” Larry Nicholson, president and chief executive officer at Westlake Village, California-based homebuilder Ryland Group Inc., said during a May 14 presentation.
Fed policy makers have been repeatedly frustrated by their inability to engineer a full-fledged recovery of housing through their easy-money policies. Then-Chairman Ben S. Bernanke even went so far as to send a central bank study on the housing market to Congress in 2012, outlining steps that lawmakers could take to revive the industry. Senate Republicans promptly rebuked the Fed for overstepping its role by making policy recommendations to Congress.
Mortgage rates have fallen recently as the bond market has rallied, in part on expectations of a continued loose monetary stance by the Fed. The average rate on a 30-year fixed loan was 4.14 percent in the week ended May 22, the lowest level since the end of October, according to McLean, Virginia-based Freddie Mac. However, that’s still up from 3.59 percent a year ago, around the time Bernanke mentioned that the central bank would start tapering its bond-buying program as the economy improved.
The decline isn’t “going to have a terribly big impact” on demand, especially since rates will probably rise again as the economy strengthens, said Mike Fratantoni, chief economist for the Mortgage Bankers Association in Washington.
The MBA’s purchase index, a measure of mortgage loan applications by those seeking to buy a home, stood at 180 in the week ended May 16, below the 197.5 average last year.
“The level of the mortgage rate is not the issue,” said David Crowe, chief economist at the National Association of Home Builders in Washington. “It’s the availability of credit.”
The supply of credit has improved slightly over the past year yet is still well below levels that would be considered normal, according to Fratantoni. The MBA’s mortgage credit availability index was 113.8 in April, up from 108.6 a year earlier but well below the 414.8 level that prevailed at the end of 2004, before the last housing boom.
If credit is key, then the most important policy maker when it comes to housing may not be Yellen, but Melvin Watt, the new director of the Federal Housing Finance Agency, which oversees government-controlled Fannie Mae and Freddie Mac.
In his first speech as head of the agency, Watt announced this month new rules to reduce the risk that banks will have to repurchase bad mortgages from Fannie and Freddie. The changes are designed to allow lenders to relax credit standards.
The steps Watt outlined are only going to help on the margin, said Laurie Goodman, director of the Housing Finance Policy Center at the Urban Institute in Washington. To broaden credit availability, it will be important for the FHFA, Fannie Mae and Freddie Mac to set out a clear timetable for improving the buyback process, she added.
Economists inside and outside the Fed had expected housing to take a hit from the rise in mortgage rates last year and the severe weather over the winter. What’s surprised them is the steepness of the decline and its persistence.
That’s led them to look for other reasons to explain the weakness. At their last meeting on April 29 to 30, Fed policy makers discussed a number of potential causes, according to the minutes of the gathering released last week. They included “higher home prices, construction bottlenecks stemming from a scarcity of labor and harsh winter weather, input-cost pressures or a shortage in the supply of available lots.”
“The housing downturn was very deep and protracted. It takes time to shift resources back into this area,” Dudley told the New York Association for Business Economics on May 20. “In some markets house prices still appear to be below the cost of building a new home. Thus, in those markets it remains uneconomic to undertake new home construction.”
Dudley also cited limited credit availability and reticent buyers as reasons for housing’s weakness. Heavy student debts have encouraged some young Americans to live with their parents rather than forming households of their own. Those debts also have discouraged them from purchasing homes.
What’s significant is that Dudley outlined “structural issues the Fed cannot control” in his speech, Neil Dutta, head of U.S. economics at Renaissance Macro Research LLC in New York, wrote in a May 27 note to clients.
“This supports the notion that the weakness in housing is not enough of a reason to derail the Fed from their baseline policy path,” he said. “Tapering continues.”
From The Detroit News: http://www.detroitnews.com/article/20140528/BIZ/305280044#ixzz330YuKf59
Did Geithner save America from a Second Great Depression?
May 27, 2014: 5:00 AM ET
Unlike in the U.S., Argentina's economy rebounded quicker from its financial meltdown in the early 2000s.
By Dean Baker
FORTUNE -- Since the release of former U.S. Treasury Secretary Timothy Geithner's new book, Stress Test: Reflections of Financial Crises, accounts of his stint in the Obama administration have been getting considerable attention in Washington policy circles. One assumption that has gone virtually unquestioned is that Geithner and his colleagues at the U.S. Federal Reserve and the Treasury saved us from a Second Great Depression (SGD). However, it is long past time that this narrative get some serious scrutiny.
The basis of the SGD story is that the first Great Depression of the 1930s was the result of the failure of the Fed to come to the rescue of the banks in the middle of a series of bank runs. If the Fed had flooded the banks with liquidity and offered various guarantees to depositors and other creditors, it could have put an end to the bank runs.
The failure to do so led to a chain of collapses that destroyed much of the economy's wealth. This was a direct hit to the people who saw their life's savings disappear when their banks went into bankruptcy. The macroeconomic consequences were enormous, as people had to radically cut back their spending, forcing massive layoffs. In addition to the loss of demand, many businesses also saw their working capital disappear when their banks collapsed.
MORE: The U.S. has the world's most competitive economy. So what?
This was the disaster that Geithner and his colleagues were determined to prevent in the financial crisis in 2008-2009. But this is only part of the story. The Great Depression was not just the financial crisis that set it off; it was a prolonged period in which the economy operated well below its potential, leading to double-digit unemployment.
The recipe for countering these types of weaknesses in demand is simple: Spend money. This is something we have known since renowned economist John Maynard Keynes wrote The General Theory in 1937. It is also a proposition that we had the opportunity to test with the massive spending associated with the United States' entry into World War II in 1941. And events played out just as Keynes predicted. The economy surged and unemployment plunged.
There is nothing magic about the economic impact of military spending. If the U.S. government had spent massive amounts of money building up its infrastructure and its education and health care systems, and done this in 1931 rather than 1941, we would not have seen a decade of double-digit unemployment. The initial downturn from the financial panic would have been quickly reversed and the economy returned to near full-employment levels of output.
MORE: Tim Geithner: Neither a god nor a devil
This is not just idle speculation, we had the opportunity to witness this set of events in Argentina in the last decade. In December of 2001, Argentina defaulted on its national debt and broke the link of its currency to the dollar. This led to the sort of meltdown that Geithner and company worked desperately to prevent. Banks couldn't repay depositors, and businesses couldn't get access to working capital. The country was overtaken by panic as the economy plummeted.
But the plunge proved to be short-lived. Government measures were able to stabilize the economy by the second quarter of 2002, and it was growing rapidly by the second half of the year. In fact, by the end of 2003, Argentina's economy had fully recovered the ground lost from the crisis. By the end of 2004, the economy was larger than it had been before it went into recession in 1998. The country maintained healthy growth until the world recession brought it to a halt in 2009. (There are questions about the integrity of the data toward the end of this period, but there is little dispute that the data through 2004 are largely accurate.)
In short, Argentina had a full-fledged financial crisis and meltdown of its banking system, but it didn't endure anything like the Great Depression. Its government and central bank were able to act aggressively to quickly get the country's economy back on its feet.
Given Argentina's experience, why would we think that U.S. policymakers would be paralyzed in the event of a financial meltdown? Would Congress lose the ability to vote spending measures and tax cuts that put money in people's pockets? Would the Fed be unable to conduct the expansionary monetary policy it has been pursuing for the last five and a half years?
MORE: McDonald's and America's new low-wage economy explained
There are obviously differences between Argentina and the United States. A collapse of the U.S. financial system would have far greater global consequences than Argentina's collapse. On the other hand, the U.S. would still be the world's dominant economy and the U.S. dollar the leading reserve currency even after a collapse.
The veracity of the SGD story matters hugely in how we think about Geithner and the performance of the Bush-Obama economic teams through the crisis. If we really had to fear a decade of double-digit unemployment then we should be very thankful, even though the economy remains weak and unemployment is still high at 6.3% as of May. However, if the SGD is just a scare story for the kids, then people should be very angry about the current state of the economy. And the evidence suggests they should be very angry.
http://finance.fortune.cnn.com/2014/05/27/did-geithner-save-america-from-a-second-great-depression/?section=money_topstories&utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+rss%2Fmoney_topstories+%28Top+Stories%29
Fannie Mae and Freddie Mac Are Making A Case For Reorganization
May 27, 2014 05:16 AM
Are the two GSE's crying wolf, or is there reason to be concerned about what they are saying? Whether there is reason for concern or not the two GSE's Fannie Mae and Freddie Mac Are Making A Case For Reorganization.
Under the present system Fannie Mae and Freddie Mac are operating under, all profits are to be given to the U.S. Treasury, since they are presently under government control. By turning over all their profits to the Treasury they are left without any money in reserve for an operating cushion to cover future loses. Fannie Mae and Freddie Mac see this as a problem, because if they do not make a profit and suffer a loss, then they will once again have to tap into taxpayer funds.
That is one way of looking at it, or the way I see it, since all profits are going to the U.S. Treasury the longer the GSE's run in the black, the more taxpayer cushion there is. So if the two GSE's suffer a loss taxpayers are basically just returning some of their past profits back to them. This is much different then the bailout of 2008 when the two GSE's went into conservatorship, and every penny came from taxpayers.
My gut feeling is Fannie Mae's and Freddie Mac's out cry is not out of concern for the American Taxpayer, but a desire to have the government shackles they have been under for the past six years to be losen, and regain more control over how they operate. I have very little doubt Fannie Mae and Freddie executives are looking at the billions of dollars they have recently been pumping back into the U.S. Treasury, and saying to themselves, why should we be giving the Treasury all this money when we could be cutting ourselves big fat year end bonuses like we use to.
In any case I am in the camp of those who want to return Fannie Mae and Freddie Mac back to the private sector, but if we do, it should be done with a warning. If they go back to their old ways of losing money, there will not be another bailout.
Prior to 2008 the two GSE's were rewarding their executives millions of dollars in bonuses even though they were running in the red. This can not be allowed to happen again, and if it does then the two GSE's should be left to fail, and these executives sent to the unemployment line.
So are the two GSE's crying wolf, or is there reason to be concerned about what they are saying? You decide. But whether there is reason for concern or not, Fannie Mae and Freddie Mac Are Making A Case For Reorganization. I for one hope it happens, as long as it is made clear there will not be any more bailouts if they fail again.
http://activerain.trulia.com/blogsview/4404660/fannie-mae-and-freddie-mac-are-making-a-case-for-reorganization
thank you
Thanks, I had read that a couple of days ago and really at this point it is the reason for my confusion and at the same time hopefulness.
Confusion = I thought that the meeting was rescheduled for today to determine if both parties have reached an agreement on the discovery issues.
Or ONLY if the parties came to an agreement would there be a meeting today.
Or with no agreement, the judge is notified and there will be automatically more time for the defendants to file for a protective order.
Hopeful= They are actually working behind closed doors with the judge's knowledge, to come to a settlement. That is why there is not time blocked out on the judges docket for today. I would think that the judge would have to know before today in order to adjust her schedule.
Or maybe it was scheduled then removed because the parties called her. OR OR OR... UGH
It seems like we should at least be able to find out if defendants filed for a protective order. Lots of organizations have financial, political and patriotic interests in this outcome. My imagination is going to run wild all weekend with fantasies of a settlement.
Does anybody have ANY information on court proceedings today? I can't find diddly. Even info. on further postponement? Does anybody have the phone number to Fairholme perry lawyers office? I feel like I am in a ketchup commercial. AANTICIPAATIONNN isss makin me wait....
Fannie Mae, Freddie Mac: Ginnie Mae Taking Market Share
by Michael IdeMay 23, 2014, 11:28 am
Ginnie Mae plays an ever more important role in housing finance, but gets little attention
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Wherever you stand on Fannie Mae / Federal National Mortgage Assctn Fnni Me (OTCBB:FNMA) and Freddie Mac / Federal Home Loan Mortgage Corp (OTCBB:FMCC) reform, one thing that everyone seems to agree on is that the government should work to get more private capital back into housing financing. Fannie Mae and Freddie Mac issuances have taken the place of the private label mortgage backed securities (MBS) that all but disappeared after the financial crisis, but you don’t usually hear about the rapid growth of Ginnie Mae securities, which have an explicit Federal guarantee.
“Over the past housing cycle, the composition of mortgage origination has changed dramatically. Mortgages implicitly or explicitly guaranteed by the government are 90% of all loans originated, compared to two thirds before the crisis,” write Goldman Sachs analysts Hui Shan and Marty Young.
agency share mortgage market 0514 Fannie Mae
Lower refinancing will increase Ginnie Mae’s market share
Not only are Ginnie Mae mortgages taking up a larger portion of the market, but Shan and Young expect them to continue growing as refinancing falls off. Ginnie Mae mortgages are more concentrated in agency purchase originations than in refinancing mortgages, so as the mix changes to include more purchase origination you would expect to see more Ginnie Mae MBS on the market.
gnma v 30y v 15y 0514 Fannie Mae
Refinancing rates have already fallen to the lowest level since the crisis, but Shan and Young expect it to continue falling for two reasons. First, there is a natural burnout effect where the people who are most likely to refinance (whether due to financial acumen, market awareness or just better advice) have already done so, locking in historically low interest rates. When interest rates finally start pushing towards more normal levels, fewer home owners will be able to refinance in the money, and the gradual decline in refinancing will turn into a steep drop.
refinancing declining 0514 Fannie Mae
Ginnie Mae’s role expanding rapidly due to Fannie Mae, Freddie Mac reform
One of the goals highlighted both by the stalled Crapo-Johnson proposal for Fannie Mae / Federal National Mortgage Assctn Fnni Me (OTCBB:FNMA) and Freddie Mac / Federal Home Loan Mortgage Corp (OTCBB:FMCC) reform and by Federal Housing Finance Agency head Mel Watt is the desire to shield taxpayers from exposure to the mortgage market. The Ginnie Mae guarantee doesn’t kick in until home equity, mortgage insurance, and additional resources from the originator that passed through the MBS are used up. Whether this is a good model for government involvement in the mortgage market or a growing source of exposure, it’s odd that Ginnie Mae has gotten so little attention even though its role in the housing market is expanding rapidly.
gnma issuance to increaase 0514 Fannie Mae
Mae, Freddie Mac: Ginnie Mae Taking Market Share
http://www.valuewalk.com/2014/05/fannie-mae-freddie-mac-ginnie-mae/
I hope so. Could be an exciting day or churn churn churn. We held well yesterday with nothing going on. Hopefully we get some news from court.
1 Billionaire Weighs in Again on Fannie Mae and Freddie
Warren Buffett at Berkshire Hathaway has once again provided a unique and critical insight into what he believes is best for government-sponsored mortgage enterprises Fannie Mae (NASDAQOTCBB: FNMA ) and Freddie Mac (NASDAQOTCBB: FMCC ) .
At the latest Berkshire Hathaway annual meeting, Buffett and longtime business partner Charlie Munger continued their tradition of conducting a question and answer session lasting more than six hours. While the two weighed in on countless issues, one of the most fascinating (and longest) discussions resulted from this question:
Do you think we need housing reform? How do you think we should do it, and should Berkshire be involved?
Although Fannie and Freddie weren't going to show up among Berkshire's investments, this question came less than one month after many -- including myself -- speculated whether the holding company would seek to be involved in the mortgage insurance industry through its massive insurance arm.
Buffett took a fascinating stance on the subject, and began by noting:
I think the 30-year fixed-rate mortgage is a terrific boon for homeowners, but it's not a great instrument to own as an investor. It's done a lot for homeownership in the country. Let people get into homes earlier, kept costs down -- the government guarantee keeps the cost down.
As my Fool colleague David Hanson noted, Munger was even blunter, suggesting the Fannie and Freddie "experiment was a total failure."
Munger added:
When private industry was running it, they owned the whole field and you had the biggest bunch of thieves and idiots running things, so I'm not all that trusting of private industry in this field. At the moment, Fannie and Freddie are being pretty conservative, and they're making pretty much all the home loans. I think that's OK.
In all of this we can see one key takeaway in the stance of Buffett and Munger surrounding Fannie and Freddie.
Source: Flickr / Future Atlas.
The critical insight
Buffett and Munger noted that one reason Fannie and Freddie collapsed was the reality that they were private enterprises seeking to deliver profits, and as Buffett said, "to serve their masters and deliver double-digit earnings gains."
Buffett and Munger seemed to suggest that instead of serving shareholders by delivering returns, the two entities are best suited to ensure housing in the United States remains affordable to millions.
After all, Credit Sesame has pointed out how inexpensive housing in major U.S. cities was relative to other cities across the globe:
Source: Credit Sesame.
As Buffett suggested, part of the reason behind this is "the government guarantee keeps the cost down."
The broader question
Questions still remain about the future of Fannie and Freddie -- Buffett himself said "the question is how to keep the government in the picture without keeping politics in the picture" -- yet Buffett and Munger are apparently comfortable with the government controlling the mortgage industry through Fannie and Freddie.
They believe the benefits and returns the two entities provide shouldn't extend simply to thousands of shareholders, but instead to millions of Americans. Do you agree?
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http://www.fool.com/investing/general/2014/05/23/1-billionaire-weighs-in-again-on-fannie-mae-and-fr.aspx
Big Yank
FnF have Judge (Judy) Sweeny
Who will serve justice she's a real meaney
When we win our day in court
You will feel like a real weeney
Today, tomorrow, not being a jerk but the news could come 5 minutes from now or in a month. It is all about the court case.
Isn't that a billion a quarter?
This stock will start Buffeting.
If it works and my account grows who gives a fuzzy rat's ass. Continue the feaux bashing!
Warren Buffet makes a lesson of FnF
http://www.fool.com/investing/general/2014/05/22/warren-buffett-makes-a-lesson-of-fannie-and-freddi.aspx
Oh yea, the reverse bashing kharma effect.
Patriot act, affordable health care act, the list goes on.
Everyone Anyone What are your opinions about settlement. I have the feeling Uncle Sam wants to settle and plaintiffs agreed to the extention so they can deal. The govt. Asked until Friday and if they can not come to an agreement then the govt. will petition for a protective order. This post is purely for my own entertainment. So what say you?
What? There is a gay football player?
Ameritopia, obamination ?
After taking some time to digest and look at the article objectively and then seeing it from the author's perspective, I think that YOU ARE CORRECT SIR. B.S.ALARM.
Growth reported: fannie tbas
http://originatortimes.com/fannie-mae/growth-reported-fannie-mae-tbas-follow-the-bond-market-2/
How the great recession affected mortgage securitization
http://www.mondaq.com/unitedstates/x/315580/securitization+structured+finance/How+the+Great+Recession+Has+Affected+Mortgage+Securitization+Servicing+and+Homeownership
Why overhauling Fnf needs congress
http://blogs.wsj.com/economics/2014/05/22/why-overhauling-fannie-mae-and-freddie-mac-needs-congress/
Thanks, I can only post links from my too smart for me phone.
Congressman stymied. Good read. Someone please post the text.
Congressman Stymied in Promise to Undo Dodd-Frank Rules - Bloomberg
http://mobile.bloomberg.com/news/2014-05-22/congressman-stymied-in-promise-to-undo-dodd-frank-rules.html