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[Editor's Note: Shah Gilani, a retired hedge fund manager and noted expert on the global credit crisis, predicted this developing FHA debacle in a July 2008 Money Morning essay.]
Is the government creating another subprime-mortgage bubble?
The first time around, the three-headed federal serpent – the Bush administration, the Treasury Department and the U.S. Federal Reserve – used Fannie Mae (NYSE: FNM) and Freddie Mac (NYSE: FRE) to "legitimize" trillions of dollars worth of toxic financial waste known as subprime mortgages.
The result was the worst financial crisis since the Great Depression – a mess that was global in nature.
And we're now headed for a repeat performance.
Some of the players may have changed since the first subprime-mortgage crisis, but the game apparently remains the same. With banks currently unwilling to lend, the new federal triumvirate of the Obama administration, the Treasury and the Fed are trying to inflate the moribund U.S. housing market. This time around, however, the FHA is the weapon of choice.
Obama & Co. are making an all-or-nothing bet that the U.S. economy will recover and bail out the housing market before the final bill for this ill-advised gambit comes due.
When this bubble bursts – and it will – U.S. taxpayers will be on the hook for more than $1 trillion in government-guaranteed debt.
Ginnie Mae: Fannie and Freddie's Once-Quiet Cousin
As a direct result of the real-estate meltdown, U.S. banks have become reluctant lenders. And they've raised their loan standards considerably. Federal officials knew they had to keep the mortgage spigot open, especially to suspect borrowers, so they turned to their new "secret weapon" – the FHA.
The FHA has been cranking out new government-insured subprime loans, which it packages into government guaranteed securities for sale to banks. This frightening reflation of the subprime bubble is being engineered for two key reasons:
- To put a floor under falling house prices.
- And to let banks swap toxic Fannie and Freddie securities for new toxic debt that is 100% guaranteed by U.S. taxpayers.
The almost inevitable insolvency of the FHA could rapidly undermine the fragile recovery of the U.S. economy. And it could plunge stock prices and bank viability to new lows.
Why the FHA?
That's simple. In an era of increasingly stringent lending standards, the FHA's standards are laughably lax.
Created by the National Housing Act of 1934, the FHA insures private mortgage lenders against borrower default on residential real estate loans. But its current allure is that it opens the door to prospective homebuyers who almost certainly wouldn't qualify for a conventional home mortgage. These are buyers with no credit history, a history of credit problems, or not enough cash to cover the down payment and closing costs.
The FHA has quadrupled its insurance guarantees on mortgages in just the last three years, with the bulk of that growth coming in the past two years. Currently, the FHA insures $560 billion of mortgages.
Loans that are FHA-insured are pooled and packaged into mortgage-backed securities (MBS) by the Government National Mortgage Association, more commonly known as Ginnie Mae. Ginnie Mae insures the actual MBS pools composed of FHA loans. Ginnie Mae securities are the only mortgage-backed securities backed by the full faith and credit of the U.S. government.
Two weeks ago, Ginnie Mae proudly announced that it had issued a monthly record $43 billion in FHA mortgage-backed securities, and through the end of July held guaranteed securities with a value of $680 billion. It is on track to exceed $1 trillion worth of guaranteed securities by the end of calendar year 2010.
Ginnie Mae is a cousin of its better-known siblings Fannie Mae and Freddie Mac. Those two mortgage giants are technically insolvent, and were forced into government conservatorship at the height of the financial crisis – ostensibly due to concerns that foreign central banks in China, Japan, Europe, the Middle East and Russia might stop buying our bonds. As "government-sponsored enterprises," or GSEs, Fannie and Freddie were only supposed to have the "implicit" backing of the U.S. government. But recent events have shown these to be fully backed by taxpayers.
The implosion of Fannie and Freddie severely threatened the mortgage market. It essentially shut down the two giant repositories that bought the loans banks and mortgage originators didn't want to hold as assets on their own balance sheets.
The FHA and its mortgage-backed securities "factory" – Ginnie Mae – have taken up where Fannie and Freddie left off, and are now the dumping ground for toxic mortgages. Using the FHA is the core strategy in the administration's misguided effort to prop up mortgage origination and modifications, real estate prices and insolvent banks.
Warning Signals?
Administration officials might want to take heed of some eerie parallels between the current situation and the one involving Fannie and Freddie. They could serve as an early warning system.
First and foremost, the FHA has already started to acknowledge systemic fraud in its business. In the earlier subprime crisis, similar circumstances led to the revelation of massive fraud in the issuance, packaging, ratings and sale of subprime toxic mortgage-backed securities.
On Aug. 4, the FHA suspended Taylor, Bean & Whitaker Mortgage Corp., one of its largest approved independent mortgage originators, from making anymore FHA-backed loans. The suspension came one day after federal investigators raided Taylor Bean's Ocala, Fla., headquarters.
Since 2007, the value of FHA-backed loan originations underwritten by Taylor, Bean had soared 117%. By contrast, the origination of conventional loans by the firm dropped 34% over the same period. Taylor, Bean subsequently filed for bankruptcy.
Earlier this summer, the U.S. Department of Housing and Urban Development (HUD), which oversees the FHA, raised concerns about FHA practices. On June 18, HUD released an internal inspector general's report that revealed that the FHA's default rate exceeded 7% and that more than 13% of its insured loans were delinquent by more than 30 days.
In a "Review and Outlook" piece, The Wall Street Journal reported that the FHA's reserve fund dropped from 6.4% in 2007 to about 3% today, putting it dangerously close to its mandated 2% minimum. That translates to a "33-to-one leverage ratio, which is into Bear Stearns territory," the newspaper report stated, referring to the now-failed investment bank that had been a central player in the original subprime mortgage crisis.
Bear Stearns is now owned by JPMorgan Chase & Co. (NYSE: JPM).
The HUD inspector general's report stated that the agency's growth makes it "vulnerable to exploitation by fraud schemes" and that it may need "Congressional appropriation intervention."
In a recent article – "FHA Disputes Whispers of Capital Reserve Problems" – on the Mortgage News Daily Web site, HUD Secretary Shaun Donovan said in June that "there's a better than even chance that we will stay above the two percent reserve threshold. That suggests, not just for the 2010 business, but overall for the portfolio, that we'll more than likely to stay out of a broader need for any taxpayer funding."
It may be more than a little disheartening to know that in a very uncertain economic environment, precisely due to fraud in mortgage lending and increasing borrower defaults, that our government is stretching a 50/50 wager on the backs of taxpayers.
That's only part I of the FHA dilemma story.
Part II is even more frightening.
A Look Ahead
Banks are dumping Fannie and Freddie-backed securities onto the Fed's balance sheet and replacing them on their own balance sheets with FHA-insured loans packaged into government-insured securities issued by Ginnie Mae. Banks aren't reducing their net assets, they are aggressively swapping acknowledged toxic securities that no-one wants for a new variety that no one will want in the future. Why?
It's not just that Ginnie Maes are fully backed by the U.S. taxpayers and Fannie and Freddie's securities are only implicitly backed. All of them will be covered by taxpayers.
The devil is in the details.
Because Fannie and Freddie securities are only implicitly guaranteed, banks that hold these securities as assets on their balance sheets must "haircut," or set aside reserves, based on a 20% risk-weighting assigned to the value of those holdings.
Because Ginnie Maes are explicitly 100% guaranteed, they are considered "risk free," and on par with U.S. Treasury bonds, notes and bills. There is no reserve requirement, or haircut, on Ginnie Mae securities.
By replacing their asset mix and holding Ginnie Maes, banks don't have to set aside reserves. They can use the money they otherwise would have to set aside to actually leverage-up their balance sheets. And guess what they're buying?
More Ginnie Maes, naturally.
The effect of the asset swap – basically one toxic pool for a replacement that's not much better – creates the illusion that banks have healthier balance sheets and that they are meeting their reserve requirements. It's such a good deal for the banks and actively promoted by the Fed and Treasury, that banks are using Troubled Assets Relief Program (TARP) money to buy Ginnie Maes.
But it's all a façade.
Capital ratios are being manipulated and insolvent banks are being propped up.
The danger of relying on the FHA to prop up the shaky housing market by facilitating mortgage origination, modifications and refinancing to less-than-stellar borrowers will only result in more subprime loans being stockpiled on the Federal Reserve balance sheet.
Eventually, defaults will overwhelm the FHA. And the hoped-for floor in residential real estate pricing will be pulled out from under us all. The next down-round in real-estate values will expose bank balance sheets for what they really are: Over-leveraged and over-stuffed with junk. Already on the ropes, banks will lose capital and will have to tighten the credit screws on consumer borrowers even more.
We may be headed for another bruising round of real-estate and MBS-related depreciation. Even a mild financial-markets setback could put the economy and the stock market onto the canvas for a 10-count. Further pummelling of shaky consumer confidence accompanied by a couple of major bank failures could easily send the U.S. market down for the financial-system equivalent of a TKO.
Taxpayers, always the lowly cornermen holding the spit buckets, are already in place with the safety nets. We will catch the FHA loans because we insure private lenders against subprime borrowers with no skin in the game. We then will have to catch the buyers of Ginnie Maes, because we guarantee those MBS securities. And we will be forced to catch the falling banks, because we already insure depositors through the Federal Deposit Insurance Corp. (FDIC).
Perhaps our ultimate fate is that of the permanently punchdrunk veteran boxer, who rues his decision to stay in the game, realizing that he fought "one bout too many." If that's the case, that "one bout too many" could be Subprime Crisis II, arranged by the very market referees whose job it was to protect us from such beatings.
News and Related Story Links:
- Money Morning Investigative Report on the Bank Bailouts (Part I):
Foreign Bondholders – and not the U.S. Mortgage Market – Drove the Fannie/Freddie Bailout. - Wikipedia:
Subprime Mortgage Crisis. - Associated Content:
National Housing Act of 1934. - SEC.gov:
Mortgage-Backed Securities. - About.com:
What is a Ginnie Mae Security? - InvestorWords.com:
What is Full Faith and Credit? - InternationalForecaster.com:
Great Doubts for the Benefit of the Stimulus Package. - Wikipedia:
U.S. Department of Housing and Urban Development. - Investopedia:
Government-Sponsored Enterprise. - The Wall Street Journal:
Taylor Bean Suspended From Making FHA Loans. - The Orlando Sentinel:
Ocala-based Taylor, Bean & Whitaker Mortgage files for Chapter 11. - Wikipedia:
Bear Stearns Cos. - Mortgage Daily News:
FHA Disputes Whispers of Capital Reserve Problems. - Money Morning News Analysis:
Inside Wall Street: That Ticking Sound You Hear Out in the Mortgage Market is the FHA.
About the Author
Shah Gilani is Chief Financial Strategist for Money Map Press and boasts a financial pedigree unlike any other. He ran his first hedge fund in 1982 from his seat on the floor of the Chicago Board Options Exchange. When options on the Standard & Poor's 100 began trading on March 11, 1983, Shah worked in "the pit" as a market maker. He helped develop what has become known as the Volatility Index (VIX) - to this day one of the most widely used indicators worldwide. After leaving Chicago to run the futures and options division of the British banking giant Lloyd's TSB, Shah moved up to Roosevelt & Cross Inc., an old-line New York boutique firm. There he originated and ran a packaged fixed-income trading desk and established that company's "listed" and OTC trading desks. Shah founded a second hedge fund in 1999, which he ran until 2003. Shah's vast network of contacts includes the biggest players on Wall Street and in international finance. These contacts give him the real story - when others only get what the investment banks want them to see. On top of the free newsletter, as editor of The 10X Trader, Money Map Report and Straight Line Profits, Shah presents his legion of subscribers with the chance to earn ten times their money on trade after trade using a little-known strategy. Shah is a frequent guest on CNBC, Forbes, and MarketWatch, and you can catch him every week on FOX Business' "Varney & Co."
FHA and GNMA aren't the devil — executive compensation and reliance on foreign workers are! Where's the story about the real cause of mortgage defaults? When people don't have jobs, they cannot pay mortgages. Get it?
ross perot said what 'hold on to your wallets folks i hear that great sucking sound from the south" he was talking about free trade and what that meant!!! JOBS!!!
I remember the personal attacks on Ross Perot-an honest very savy businessman and philanthropist( large gifts to MDAnderson Hospital among others)-the investment bankers and crew who profit from M and A, overseas fees, et all savaged him-he was trying to tell the less sophistocated American worker that they are being sold out and they were. Someone should find his graphs and review them-he was right and the scum who sold our country out are now buying our elections with the profits.
Mr Gilani's article is excellent-thanks
How can people without enough-paying jobs, or without any jobs at all, buy houses and get mortgages in the first place?
They don't get them and they weren't before. This "sub-prime" claim is a fiction, a red herring. A recent studyconcluded that nearly all of the "sub-prime" / high interest rate loans, should have been low interest / "prime mortgages" but the consumers were funneled into them without a choice. People were not given the choice of a fixed 20-year 4% loan, and a 30 year 3% fixed rate loan. Nor were they ever sold a variable rate loan with a low starting "teaser" rate. To the contrary, home buyers were given moderate rates and told that they would go down… Read more »
You are very close, and the hit is a direct one, as the target is aligned,as you see it.
CLEARLY . . . .
I wouldn't say for sure that all the sub-primes are a fiction, but you're right on when you say many consumers were funneled into those loans without the opportunity for an informed choice.
FHA is putting people in houses with minimal down and no savings. If the hot water goes out they can't even afford to replace it. Subprime I was about putting everyone in a house. Subprime II is about putting as many people in houses to manufacture a floor under the housing market and protect the banks. Whatever happened to 20% down to qualify for a mortgage?
What a bunch of BS. To begin with, the loans being made today (what few there are), are nowhere near the same as the "toxic" loans of the past. To call these current FHA backed loans "toxic" is ludicrous. The days of the Option ARMS, Interest Only, No Doc, 125% LTV etc. loans are gone. Todays borrowers have to meet income requirements, credit score limits, make at least a 3.5% down payment and, in some cases, submit DNA samples and sacrifice their first born. Not to mention the appraisals are being scrutinized beyond belief and reason. I agree, there will… Read more »
hOW LITTLE YOU KNOW, I SEE THIS HAPPENING EVERY MONTH, I SEE PEOPLE GET THESE LOANS, S TILL, THEY ARE BEING OFFERED AND THEY ARE BEING WRITTEN UP
It is evident that the rating agnecy are at the forefront of this problem. It must be the buyers of the MBS that should be paying for the rating and not the sellers. Untill the rating agency are regulated, this will continue to be a problem. The lax underwriting and risk taking will contuniue throughout this industry, which will cause a mortgage crisis similar to the one we just had.
In 2006 we had Obama and some 20 other lawyers from Acorn going to banks that were not making bad loans and threatening large lawsuits if they did not make bad loans, as specified under the 1994 Federal Fair Housing Act signed into law by Clinton, and sponsored by Barney Frank and Chris Dodd. This law was the means for destruction. I think you will also see many defaults on Auto loans from the glunker program. Many people bought that would not have otherwise.
What you say about the role of the Democratic "dream child" (government forced subsidized housing) is fact and has been repeated in some circles in the media. My comment is that I am struck by how little traction or acceptance this bombshell of information has garnered. Call it bias, denial, political protectionism, lying, stupidity or rationalization; it is death to us all to not be able to see reality clearly. The explanation for this gross "unseeing" remains a mystery.
There is a reason that it is not getting any traction because it is not true. There have always been defaults on mortgages. But there have been no "no documentation loans" that is total fiction. My girlfriend bought a condo in 2005, the very height of the market, but she had no choice. It took over 5 months of running back and forth to banks, the FHA, and several mortgage brokers, nearly every day. She had an income of nearly $50,000 working 2 jobs, excellent credit, and the condo was $125,000, it was the 3rd one she looked at, because… Read more »
What do you expect for shacking up. Get married and half your problems will go away.
the author of this article starts out making a huge mistage as to who started this sub-prime loan mess ….It was Jimmy Carter and followed up by Bill clinton……check your facts…….we do!!!
I am wondering what role, exactly, Shah Gilani believes Fannie and Freddie played in the subprime situation. Fannie and Freddie are not and were not subprime entities. They are 'prime' entities. This whole article is pretty ignorant though. To suppose that our financial crisis is the result of the subprime meltown is like supposing the cough causes the cold. Further, FHA standards, though lower than Fannie and Freddie are nothing like subprime standards, if one can even use that word for subprime. FHA has increased its down payment requirements and tightened its credit requirements since 2007. FHA has also increased… Read more »
Dear Mr. Gilani,
If you research, you will find the sub-prime mortgage crisis began under the Clinton administration. Fannie Mae announced in 1999 that it was lowering requirements for mortgages for those with lower incomes. You can find the article by going to the link below.
http://www.nytimes.com/1999/09/30/business/fannie-mae-eases-credit-to-aid-mortgage-lending.html
Your article is misleading, and like so many others blames the Bush administration for the mortgage crisis that began under the Democratic administration of Bill Clinton.
Sincerely,
Thomas DeClue
That is correct, but I do believe it was underway before Bill. He just endorsed it. It actually goes way back, same as the Fereral Reserve. The people are really to blame for not paying attention to what has been going on everywhere. When Bill was govenor of Arkansas he was using the Mensa (sp) airstrip for Cocaine deliveries, not just for personal use. Back to the people! We have got to quit being Demorcrats and Republicans, since we all gotta live here. We are all in this country together and United We Stand/Divided we fall. I have always looked… Read more »
Hello world; kela is more correct on this than most of the people wha are posting. It goes farther back than just "Slick Willie". If you study history you will see that the "New Deal" lkwas handled the same way and had the same results. All of our "politicians" are rrepeating history because they deither have not studied it or have not learned from it. I would strongly recomend that each of us look to ourselves to save ourselves as the "fools" will rely on the government. It was the government that got us into it by circumventing the Constitution… Read more »
The problem is not that people "don't study history". The authors of the history books have a political bias to tell only their side. If their policies failed, they write a book claiming it was a success. People then study the false history and make the same mistakes. Remember "He who controls the past controls the future." After all how many of you learned from history that Columbus wanted to prove the world was round not flat; or that he called the people he discovered "Indians" because he thought he was in India? Propably 90% of you. But both things… Read more »
If voting actually changed thing it would be against the law.
BINGO! Kelela
The saddest part of this story is that all the self seeking on the part of those who have the fiscal ability to prosper from this situation is that we as a country are witnessing the economic takeover of our country's resources and our economic position in the world. It is the same effect as if we went to war and lost and are now a conquered nation, without having fired a shot! The shame of it all is that many are within our own ranks that helped this situation to come about to this sad estate. During war, we… Read more »
In some part – fair play, what goes around comes around, it's just so unfortunate that it is so true, this sense of betrayal from within. The ' untouchable ' corporate and govt. scoundrals taking, taking, scheming, taking with no regard or sense of responsibility to the country as a whole.
Every now and then you read an article about a corporate scandal in China where a ' scoundral ' is held accountable either by his own hand, or, a Govt. bullet. That can't be the right way, but, this isn't either.
I would note that the Fannie and Freddie woes didn't start during President Bush the 2nd's time but during the Clinton years. Though I agree he failed to do something about it. Him and Congress. The Mortgage problems continue today according to this Reuters article http://www.reuters.com/article/ousivMolt/idUSTRE58K29E20090921 And I would suggest that they are going to increase to an even higher rate because of the unemployment rates that continue to rise across the country. Remember the "good news" that the gov keeps feeding is us that less people were laid off, not that more people were hired. So the job loss… Read more »
As the government is also so leveraged just wait until they tell everyone to turn in their gold at the closing bell rate(yes guys like me will keep ours but about 75% is held by five major companies or funds that send you a certificate they will comply).e you t You will be given this fed fiat money and "Dick" will look at "Jane" and say honey look we doubled our investment on gold let's spend our profit and by that new truck from Government Motors and new drapes and furniture, thus starting the artificial stimulation and the rampant inflation.… Read more »
No surprise here. Almost everything the government does is to set the taxpayer up for another fiasco. It has been doing just that for almost 100 years. Why would it change it's spots of deceit and nation destruction now? Wake-up Americans.
'1994 Federal Fair Housing Act signed into law by Clinton, and sponsored by Barney Frank and Chris Dodd' was the shot in the head to the housing market, one of the moving parts in the housing crash, not to consider the sep 11 terrorist attack that sent the us economy into a short recession making the FED to put interest rates lower, so there was a lot of factors coming into play in the 'perfect storm'.
Hate to break it to you common sense and BEM but FHA has had massive fraud throughout its history. Maybe its a good example of how easy it is to perpitrate fraud on Gov't agencys. September 2008 unemployment was 6.2% at the time. Massive layoffs etc. started happening once the market tanked so how can you possibly make an argument that it was a lack of jobs that caused the 1st crash. Even though FHA is a full income check loan (unless its a rate & term refi) their credit standards are far below conventional standards. All in all I… Read more »
Without doubt, the efforts to prevent fraud on gov't (taxpayer) backed FHA loans should be of first priority. But to suggest that FHA loans may lead to the next big sub-prime melt down might be going to far. As a commentor noted, these aren't 125%, negative amortization, no documentation loans (this loan actually existed at one point). The primary reason that FHA loans have increase so dramaticly is that FHA loans require a much smaller down payment (3% to 5%) than conventional loans (20% to 25%). It can argued whether this is a good thing or not … borrowers should… Read more »
Don't forget it was popular on both side. Remember one time head of HUD and former NY Republican Congressman Jack Kemp came up (correctly) with the "ownership society" concept that Barney Frank opposed. "People don't destroy what they own." He wanted to eliminate "public housing projects" and reduce renting. Frank countered, "Some people shouldn't be allowed to own their own home." The problem was not the idea, "Home owners make for better citizens." The problem was the government bureaucracy to make it happen in a way designed to both fail and make the banks lots of money in the process.… Read more »
Blah, blah, blah!
Interesting, but not particularly actionable news, for people who have lots of time on their hands and live on the internet.
Blah, blah, blah!
Yikes!
Explain to me why any body is interested in subprime. Subprime is 5% or less??? Almost any other investment should meet or exceed 5%.
This is a question not a comment.
[…] "In an era of increasingly stringent lending standards, the FHA's standards are laughably lax," Gilani said in a recent Money Morning editorial. "The almost inevitable insolvency of the FHA could rapidly undermine the fragile recovery of the U.S. economy. And it could plunge stock prices and bank viability to new lows." […]
to Gary – maybe you are mistaking subprime to mean a subpar rate or below the prime rate? Subprime is meant to mean above average risk in this article, i.e. subprime credit. "Explain to me why any body is interested in subprime. Subprime is 5% or less??? Almost any other investment should meet or exceed 5%." My two cents from the insiders point of view – FHA guidelines are bent and stepped over by lenders all the time. FHA rules are vague in many areas and enforcement for violating them is almost non-existant. My guess is that FHA will need… Read more »
Right on, Anon! The requirements are bent and stepped over routinely. I sold a home in late 2008 to a guy who had been approved for a 2.5% down FHA loan. Talk about unqualified? The closing was postponed over a month because the guy could not find a way to make the down payment. He eventually found someone to loan him the money, but I kept expecting him to want me to loan it to him. The guy was upside-down within two months. In my opinion, if you can't come up with 20% down, you should not want a home… Read more »
I enjoy Money Morning.
I get tired of hearing that the US debt load and collapsing economy will bankrupt our grandchildren's future. Do the math! WE are going to live through this collapse within the next few years! When interest rates go up, watch what happens to the % of budget expended on interest only on the national debt. I agree the case against Ginnie Mae may be overstated – – but not by much. Wake up America: the rose is dying a slow socialist death, according to plan… We should fear the Democrats knee-jerk to save their 2010 election hides at all costs… Read more »
Collectively ALL politicians that are in office or who have served since 1980 are at fault! But as long as people like you stupidly think that one side is better than the other,then America is doomed as this political game is played out! Reagan talked about the deficit in 1980, 30 years ago, and the national debt today is so huge that it is unpayable and we wil default and have our currency forcefully devauled by the other nations of the world especially those that hold our debt!!! If John MC Cain had won we would still be the largest… Read more »
Some of the people here have some idea of the magnatude of the problem. One of the cornerstones of the housing market is the "subprime loans" that are being made and were made. The banking industry is as much to fault as the Politicians. It is time to work on getting back to what the country did for almost 100 years before the "New Deal" stopped people from thinking. Save for the future by putting money away and using money to make money so that they could better themselves. Loans were short term and not lifetime things then and should… Read more »
This story contains a lot of truth but not the story behing the story. As long as the US government continues to allow land owners and banks to speculate in the value of land and its rising prices, so will successive bubbles and bubble bursts create financial crises, bankruptcies and loss of progress in the macroeconomic structure of society. Our present system is unstable and it is caused by the unfortunate fact that unlike goods which are possible to produce, land is not and what we have must naturally increase in value (even without speculation in its value, which makes… Read more »
why in heaven's name didn't you say something about the prospects for Ginnie Maes as a future investment or prospects for valuation if already held?? Did I miss a paragraph or something?
I think it was president Truman that said "if you cant beat the United States Militarily than you have to beat it……. ECONOMICALLY!!!— CHINA" and now they are trading in a roundabout Currency of their own. Its time to Invest in OUR U.S.A energy microcaps —- Cancel the Debt on the people and since the banks went Broke we ALL get our Houses for FREE.. Increase my families Net Worth "DEED Me Please" Give US back Prosperity and the TAX off our Backs… At one time the people were the BANKS we had the money…. Then came the Developers …… Read more »
I am democrat,however,this administation is basically using the same financial team that were used to create the fall.Their reasoning is ,who is better to untangle the crisis than those who were party to the meltdown.Excessive profits off questional credit practices frighten me.This jobless recovery ,frightens me.It seems every problem finds it solution in more governmental spending and virtually no corrective measures.Requiring a larger downpayment will not drastically easy the cost of a total loss.This administation needs new financial advisors.
in the US economic stable, the bigger the pile of manure our government makes, the more the opportunity to find ponies like Ford and other ten-baggers. Lets focus on finding these gems, not carping on the well- documented ineptitude of the Government. These are indeed the worst of times and could be the very best of times if we choose to keep our eyes on the sliver of light that are shinning through, here and there.
Fred Nazem
Been there done that but our esteemed supreme court rejected that remember.
Funny, the supreme court had no problem when term limits for the president then
again it was Franklin D Roosevelt, a democrat so I guess that explains the courts
inconsistency!!!
TERM LIMITS NOW !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
They say 'when a butterfly flaps it's wings on one side of the planet a wind is felt on the other side' or something like that! It is incredulous that Politicians or Civil Servants introduce policies in order to achieve some goal or other, only to create a by-product, that often has devastating consequences on a hitherto apparently unforeseen area of our economy. In the UK, the influx of Eastern European cheap labour, in the 'good times' which occurred up to only 3 years ago, are now causing the unemployment of traditional UK workers (with mortgages). I recently had to… Read more »
How APT,is Johns comment,but not even the half of it,not even touched on the primary education,and,criminality,in the Ghettos.Education,Education,has COST,COST,COST,with poor results.Socialbility has disappeared,envy and malice,has replaced it !
Hi!, Fellow Citizens: Sometimes it's very hard to go from a conceptionalization to a realization but nonetheless moving towards realizations is inevitable. However, regards our entire economy, what's happening tells us what, regards our educational systems encluding those who study for a real estate liicense etc.? Can our educational systems be trusted for competance, astuteness, relevance, management skills, creative inputs/outputs? With so many professional people now populating this planet why are our plans failing us? Billions of $$$'s are spent now learning how to go broke; how to mismanage our finances; allow us to learn to take bribes etc.? Why… Read more »
there is no value in liability.there is only a price.we do not manage finances,we manage debt.perpetual indebtness is the name of the game.be it yourself,be it government.there is nobody to blame.there are losers,and there are winners.like anything in life,you play it right,or you play it wrong.there are those,who control it.the rest are chess pawns,and off to work they have to go.one job,two jobs.50 hours a week,70 hours per week.chasing the mirage.stop buying houses,and we all can afford them soon.it is about decent,peaceful life,not the debt slavery.chasing the mirage.we are all in it,and there is no solution.play it right,because your work… Read more »
Great Comments I agree but most will blindly pursue and follow the mirage
This current economic mess has it's genesis in two factors; 1) president Nixon taking us off of the gold standard and 2) president Reagan systematically devaluing all labor by firing the air traffic controllers. These two factors combined have caused irreparable damage to all economic activity and will not be corrected any time soon. You say home prices were overvalued and collapsed I say stock prices and ALL paper assets have been and still are overvalued in a similar fashion. Does any body remember 14,000 plus DJIA? These things are all connected and will not be corrected until those in… Read more »
Well said — thank you for pointing out the facts. Anyone that doesn't see the mirror image to the Fannie and Freddie corruption needs to wake up. And you're right, actually beyond those scopes due to the further manipulation by banks and their balance sheet "reporting". I agree, we need jobs in this country or we'll continue to deteriorate further. However, this continuous bailout of government and banking failures on the backs of those still working hard needs to stop. Wake up taxpayers and think about who you're electing into office — before it's too late!!!
What to do? What action will make a difference? How about an alternative economy? How to avoid bad investments and control the rollercoaster ride? What are the real rules of wealth in these days of challenge to all we have assumed to be stable truths. Let's see the list of commandments. What is real wealth? What is essential for local government services? The American way has been and continues to be exploitation. What are the successful models that are alternatives to exploitation? We must look to the future for progress and not regress through continuing exploitation. Nothing is free or… Read more »
ginnie and freddy maes are heating the housing market with thier big gannig.But another thing is happenig in the goverment policy that doesn't meet an equilibrui between supply and demand in a macroeconomic way.this is creating an empty deflation and inflation that doesnt meet an equilibruim.that finacial crisis meet a recovery in the past that doesnt creates and economic expansion in the us economic develoment.In another way the production is high and the housing supose to be low but there is not enough jobs and the people are losing for forclosure their homes and not loans coming up.rafael d.