The Nation's Financial Condition

[Typical Lax Dad]

And when has the market tanked? In 2008, when the Bush/Cheney administration brought about the "Great Recession;" in 2020, during the early Covid days when Tronald Dump was Prresident; and in 1988, during Reagan-Bush years. I guess we could also mention Herbert Hoover, who was a Republican. Yep, Republicans have quite a record of wealth destruction.

2008-10 was sparked by the sub-prime mortgage crisis. I don't think lending people significant money who would not ordinarily qualify was good for them or for underpinning our financial foundation. Both political parties had their pom-poms cheering for this debacle.

You're certainly right that both parties cheered on home ownership.

But it was the idiots in finance who though that they could derivative/hedge/insure (whatever term you wish to use) their way to protect absurd amounts of leverage. They thought that they had invented a new way to eliminate risk. Morons. No one forced them to do that. The private market failed....no one to blame but themselves.

Over collateralize a CLO

[Farfromgeneva]

Dow up to 41,000+, up 363 points today. All that “Marxist Communist Fascism” from Harris has spooked the markets.

Can’t help it.

Please convert heretofore to S&P 500 rather than Dow
(30 price weighted references).

I don’t get it but up to 5623…

https://www.wsj.com/market-data/quotes/index/US/SPX

Thanks,

Mgt

[Farfromgeneva]

This company?

https://www.reuters.com/business/health ... 023-08-09/

His financial advisor is Jordan belfort.

[Farfromgeneva]

And when has the market tanked? In 2008, when the Bush/Cheney administration brought about the "Great Recession;" in 2020, during the early Covid days when Tronald Dump was Prresident; and in 1988, during Reagan-Bush years. I guess we could also mention Herbert Hoover, who was a Republican. Yep, Republicans have quite a record of wealth destruction.

Well if we’re going to talk 2008 I’d like to
Introduce you to a Dem gentleman named Robert Rubin….

[Farfromgeneva]

And when has the market tanked? In 2008, when the Bush/Cheney administration brought about the "Great Recession;" in 2020, during the early Covid days when Tronald Dump was Prresident; and in 1988, during Reagan-Bush years. I guess we could also mention Herbert Hoover, who was a Republican. Yep, Republicans have quite a record of wealth destruction.

2008-10 was sparked by the sub-prime mortgage crisis. I don't think lending people significant money who would not ordinarily qualify was good for them or for underpinning our financial foundation. Both political parties had their pom-poms cheering for this debacle.

You're certainly right that both parties cheered on home ownership.

But it was the idiots in finance who though that they could derivative/hedge/insure (whatever term you wish to use) their way to protect absurd amounts of leverage. They thought that they had invented a new way to eliminate risk. Morons. No one forced them to do that. The private market failed....no one to blame but themselves.

Not quite. Fannie and Freddie failed and our shrugged shoulder implicit gty became explicit - this goes back to a number of items including SOME pieces of the expansion of HUD. Check out what Mark Calabria has to say about the FHA/HUD.

Saying the crisis was caused by Wall Street after 50yrs of political subsidiaries and increasing support for home ownership, both tangible and intangible, at the expense of a renter class that learned other ways to build wealth which would be useful today as that lever isn’t available anymore (wealth accumulation through home ownership), is like saying Enron failed because of a liquidity run/squeeze….

The govt and pols and most citizens have been balls out long real estate and supportive of high prices and higher velocity of transactions (price higher with more trades as a general rule plus increase liqudity).

Your type of thinking is how we don’t get real structural change that’s needed but instead a lot of superficial and cosmetic frictions like a cheap coat of paint over it.

[Farfromgeneva]

For the leftward folks who aren’t bomb tossing cartoons:

(Money and politics question):

How do you square George Soros making $1Bn inflicting me sinful pain on many people(Brits, I know who gives a sh*t, but reportedly they are still human beings), due to poor incentive structures set up

AND

Angst towards wall st bankers for arbitrating poor/misaligned incentive structures.

Is it just a matter of tossing money at the right causes later in life like buying your way out? Or maybe the Wall Street folks are just filling a vacuum that always required being filled?

[PizzaSnake]

For the leftward folks who aren’t bomb tossing cartoons:

(Money and politics question):

How do you square George Soros making $1Bn inflicting me sinful pain on many people(Brits, I know who gives a sh*t, but reportedly they are still human beings), due to poor incentive structures set up

AND

Angst towards wall st bankers for arbitrating poor/misaligned incentive structures.

Is it just a matter of tossing money at the right causes later in life like buying your way out? Or maybe the Wall Street folks are just filling a vacuum that always required being filled?

No, money doesn't expiate sin. As far as the financiers, I'd say they, like water, seek their own level.

[a fan]

And when has the market tanked? In 2008, when the Bush/Cheney administration brought about the "Great Recession;" in 2020, during the early Covid days when Tronald Dump was Prresident; and in 1988, during Reagan-Bush years. I guess we could also mention Herbert Hoover, who was a Republican. Yep, Republicans have quite a record of wealth destruction.

2008-10 was sparked by the sub-prime mortgage crisis. I don't think lending people significant money who would not ordinarily qualify was good for them or for underpinning our financial foundation. Both political parties had their pom-poms cheering for this debacle.

You're certainly right that both parties cheered on home ownership.

But it was the idiots in finance who though that they could derivative/hedge/insure (whatever term you wish to use) their way to protect absurd amounts of leverage. They thought that they had invented a new way to eliminate risk. Morons. No one forced them to do that. The private market failed....no one to blame but themselves.

Not quite. Fannie and Freddie failed and our shrugged shoulder implicit gty became explicit - this goes back to a number of items including SOME pieces of the expansion of HUD. Check out what Mark Calabria has to say about the FHA/HUD.

Saying the crisis was caused by Wall Street after 50yrs of political subsidiaries and increasing support for home ownership, both tangible and intangible, at the expense of a renter class that learned other ways to build wealth which would be useful today as that lever isn’t available anymore (wealth accumulation through home ownership), is like saying Enron failed because of a liquidity run/squeeze….

The govt and pols and most citizens have been balls out long real estate and supportive of high prices and higher velocity of transactions (price higher with more trades as a general rule plus increase liqudity).

Your type of thinking is how we don’t get real structural change that’s needed but instead a lot of superficial and cosmetic frictions like a cheap coat of paint over it.

Except Fannie and Freddie didn't fail. Private companies did. No one told them to do what they did, FFG.

You're making it sound like Fan and Fred collapsed, and no one else. That's not what happened.

We've discussed this before...if we did what you want, either home values would fall off a cliff as no one could afford a home....or, corporations (mostly foreign) would own all the homes and rent them out.

And you'd clip the ONLY means of economic mobility for easily half our country. Which is why they will NEVER cut these subsidies.

I'd be willing to give it a try, but I think it wouldn't land in a place that you'd like.

[Farfromgeneva]

For the leftward folks who aren’t bomb tossing cartoons:

(Money and politics question):

How do you square George Soros making $1Bn inflicting me sinful pain on many people(Brits, I know who gives a sh*t, but reportedly they are still human beings), due to poor incentive structures set up

AND

Angst towards wall st bankers for arbitrating poor/misaligned incentive structures.

Is it just a matter of tossing money at the right causes later in life like buying your way out? Or maybe the Wall Street folks are just filling a vacuum that always required being filled?

No, money doesn't expiate sin. As far as the financiers, I'd say they, like water, seek their own level.

Just pointing out an incongruity in many folks approach.

[Farfromgeneva]

And when has the market tanked? In 2008, when the Bush/Cheney administration brought about the "Great Recession;" in 2020, during the early Covid days when Tronald Dump was Prresident; and in 1988, during Reagan-Bush years. I guess we could also mention Herbert Hoover, who was a Republican. Yep, Republicans have quite a record of wealth destruction.

2008-10 was sparked by the sub-prime mortgage crisis. I don't think lending people significant money who would not ordinarily qualify was good for them or for underpinning our financial foundation. Both political parties had their pom-poms cheering for this debacle.

You're certainly right that both parties cheered on home ownership.

But it was the idiots in finance who though that they could derivative/hedge/insure (whatever term you wish to use) their way to protect absurd amounts of leverage. They thought that they had invented a new way to eliminate risk. Morons. No one forced them to do that. The private market failed....no one to blame but themselves.

Not quite. Fannie and Freddie failed and our shrugged shoulder implicit gty became explicit - this goes back to a number of items including SOME pieces of the expansion of HUD. Check out what Mark Calabria has to say about the FHA/HUD.

Saying the crisis was caused by Wall Street after 50yrs of political subsidiaries and increasing support for home ownership, both tangible and intangible, at the expense of a renter class that learned other ways to build wealth which would be useful today as that lever isn’t available anymore (wealth accumulation through home ownership), is like saying Enron failed because of a liquidity run/squeeze….

The govt and pols and most citizens have been balls out long real estate and supportive of high prices and higher velocity of transactions (price higher with more trades as a general rule plus increase liqudity).

Your type of thinking is how we don’t get real structural change that’s needed but instead a lot of superficial and cosmetic frictions like a cheap coat of paint over it.

Except Fannie and Freddie didn't fail. Private companies did. No one told them to do what they did, FFG.

You're making it sound like Fan and Fred collapsed, and no one else. That's not what happened.

We've discussed this before...if we did what you want, either home values would fall off a cliff as no one could afford a home....or, corporations (mostly foreign) would own all the homes and rent them out.

And you'd clip the ONLY means of economic mobility for easily half our country. Which is why they will NEVER cut these subsidies.

I'd be willing to give it a try, but I think it wouldn't land in a place that you'd like.

They failed. Don’t make any mistake those entities were entirely insolvent by a “country mile”.

Your jumping all around getting into what was done, it was done because they failed should be obvious as a matter of fact. I can parse the technicalities with you but they flat out failed. My simple point is blaming some bankers in a 5yr window blaming after a half century of gross market distortion and price manipulation by our govt, who oh by the way created the 30yr fixed mortgage out of thin air, to sell this myth that rock Moranis sings about to his hoe here: Is quite the narrow view of the problem. Do a genealogy of FHFA, VA , HUD, FNMA/FHLMC, etc. overlay all the subsides and transfers for homeowners over that same period. And tell me in 80yrs of our fictitious fixed rate mortgage market and make believe implicit guarantee that we wouldn’t have one meltdown? It’s a 100yr flood and focusing on the bankers is wildly myopic as it was in 2011z

By the way your scenario, you’re not seriously incorporating PPP, FX or IR changes that would occur at all are you?

The whole site one on home prices collapsing is fear mongering. I’m selling pragmatism and long term robustness by taking our medicine and finding real clearing prices. You’re talking about just protecting people from themselves at any cost here.

There’s no mobility how as homeowners are locked into their low rate mortgages. Financialization of RE (rally pushee over the top by treasury programs coming out of the crisis subsidizing the mass acquisition of homes in the sunbelt and elsewhere and it was applauded by the administrating supporters at the times. How’s everyone like getting squeeze ins decaying and undermaitainwd affordable and workforces Single Family homes. Because why???? We have to support home prices….how’d you like Colony, American homes for rent praetium etc hoarding and squeezing the mobility out of hair lower middle and upper lower class. That’s what we all got for the scary need to support home prices in the GFC. A big fu**inf transfwr of wealth to guys including TOM BARRACK.

[a fan]

They failed. Don’t make any mistake those entities were entirely insolvent by a “country mile”.

They're literally operational this very day.

Your jumping all around getting into what was done, it was done because they failed should be obvious as a matter of fact. I can parse the technicalities with you but they flat out failed. My simple point is blaming some bankers in a 5yr window blaming after a half century of gross market distortion and price manipulation by our govt, who oh by the way created the 30yr fixed mortgage out of thin air, to sell this myth that rock Moranis sings about to his hoe here: Is quite the narrow view of the problem. Do a genealogy of FHFA, VA , HUD, FNMA/FHLMC, etc. overlay all the subsides and transfers for homeowners over that same period. And tell me in 80yrs of our fictitious fixed rate mortgage market and make believe implicit guarantee that we wouldn’t have one meltdown? It’s a 100yr flood and focusing on the bankers is wildly myopic as it was in 2011z

There isn't a first world country that doesn't have major involvement in the housing market.

All I'm saying is: picture what your path would look like. The bulk of American's net worth and spending power is built into their home value increasing. What happens when you cut demand for home purchases in half? What happens?

I don't disagree at all with your assessment of the negative consequences of government housing programs. All I ask is: what are the negative consequences for pulling the .gov help away?

As I said: I'm willing to give it a try!

[Farfromgeneva]

They failed. Don’t make any mistake those entities were entirely insolvent by a “country mile”.

They're literally operational this very day.

Your jumping all around getting into what was done, it was done because they failed should be obvious as a matter of fact. I can parse the technicalities with you but they flat out failed. My simple point is blaming some bankers in a 5yr window blaming after a half century of gross market distortion and price manipulation by our govt, who oh by the way created the 30yr fixed mortgage out of thin air, to sell this myth that rock Moranis sings about to his hoe here: Is quite the narrow view of the problem. Do a genealogy of FHFA, VA , HUD, FNMA/FHLMC, etc. overlay all the subsides and transfers for homeowners over that same period. And tell me in 80yrs of our fictitious fixed rate mortgage market and make believe implicit guarantee that we wouldn’t have one meltdown? It’s a 100yr flood and focusing on the bankers is wildly myopic as it was in 2011z

There isn't a first world country that doesn't have major involvement in the housing market.

All I'm saying is: picture what your path would look like. The bulk of American's net worth and spending power is built into their home value increasing. What happens when you cut demand for home purchases in half? What happens?

I don't disagree at all with your assessment of the negative consequences of government housing programs. All I ask is: what are the negative consequences for pulling the .gov help away?

As I said: I'm willing to give it a try!

Every bankruptcy is a failure it’s called reorganization. They were in conservation-that’s failure. Bankruptcy is failure. Conservatorship is failure-you lost the right to your own independence by failing in performance. That they operate today doesn’t mean they didn’t fail. Fail doesn’t mean extinction so I don’t Know why that would be any type of arguable point. Shareholders were quoted out preferred holders have lottery ticket today though many think the govt would stiff arm them anyway and have the right to do so.

Let’s just first have everyone acknowledge the extreme and perverse singled efforts to stabilize society through the American dream meant to drop this earlier - https://youtu.be/9DD7VIKZnGA?si=reI16ea3VuxOQFK9.

The wealth creation option for most is done in housing. Why keep subsidizing this. Why do I have to point out the gross transfers to owners over renters and changes in behavior because of these distortions? Why are people always talking about the need to support housing? It’s all one way and it’s time to at least acknowledge the mess we’ve created with it. Lots of time to push against taking any transfer away form a homeowner, it’s the ultimate nimby play in a grand scale. But let’s start with all the sanities that have come and seriously acknowledge the bankers only took the cherry and some whipped cream off the top but are hardly the reason for a singular housing crash in 65-80yrs of highly subsidized and distorted market for real estate.

Let’s give it a try at least let some air out in some places. We’ve done only the opposite for many generations and it’s gotten us here…

[a fan]

Every bankruptcy is a failure it’s called reorganization. They were in conservation-that’s failure. Bankruptcy is failure. Conservatorship is failure-you lost the right to your own independence by failing in performance. That they operate today doesn’t mean they didn’t fail. Fail doesn’t mean extinction so I don’t Know why that would be any type of arguable point. Shareholders were quoted out preferred holders have lottery ticket today though many think the govt would stiff arm them anyway and have the right to do so.

It's a .quasi-gov organization that doesn't operate by the same principles as NGO's. They didn't fail. They were a mess, sure. But our entire .gov has been operating at a massive "loss" for decades now....so, it's hard to throw stones.

Let’s just first have everyone acknowledge the extreme and perverse singled efforts to stabilize society through the American dream meant to drop this earlier - https://youtu.be/9DD7VIKZnGA?si=reI16ea3VuxOQFK9.

Again, i completely agree there are downsides. But there are upsides, too.

The wealth creation option for most is done in housing. Why keep subsidizing this. Why do I have to point out the gross transfers to owners over renters and changes in behavior because of these distortions? Why are people always talking about the need to support housing? It’s all one way and it’s time to at least acknowledge the mess we’ve created with it. Lots of time to push against taking any transfer away form a homeowner, it’s the ultimate nimby play in a grand scale. But let’s start with all the sanities that have come and seriously acknowledge the bankers only took the cherry and some whipped cream off the top but are hardly the reason for a singular housing crash in 65-80yrs of highly subsidized and distorted market for real estate.

Let’s give it a try at least let some air out in some places. We’ve done only the opposite for many generations and it’s gotten us here…

Well, if you look, these programs went hand-in-hand with the formation of a middle class. Do you think this is a coincidence? I don't.

But again, I'm game to try your path. I don't know of any leader in either party who's advocating this....do you?

[Farfromgeneva]

Every bankruptcy is a failure it’s called reorganization. They were in conservation-that’s failure. Bankruptcy is failure. Conservatorship is failure-you lost the right to your own independence by failing in performance. That they operate today doesn’t mean they didn’t fail. Fail doesn’t mean extinction so I don’t Know why that would be any type of arguable point. Shareholders were quoted out preferred holders have lottery ticket today though many think the govt would stiff arm them anyway and have the right to do so.

It's a .quasi-gov organization that doesn't operate by the same principles as NGO's. They didn't fail. They were a mess, sure. But our entire .gov has been operating at a massive "loss" for decades now....so, it's hard to throw stones.

Let’s just first have everyone acknowledge the extreme and perverse singled efforts to stabilize society through the American dream meant to drop this earlier - https://youtu.be/9DD7VIKZnGA?si=reI16ea3VuxOQFK9.

Again, i completely agree there are downsides. But there are upsides, too.

The wealth creation option for most is done in housing. Why keep subsidizing this. Why do I have to point out the gross transfers to owners over renters and changes in behavior because of these distortions? Why are people always talking about the need to support housing? It’s all one way and it’s time to at least acknowledge the mess we’ve created with it. Lots of time to push against taking any transfer away form a homeowner, it’s the ultimate nimby play in a grand scale. But let’s start with all the sanities that have come and seriously acknowledge the bankers only took the cherry and some whipped cream off the top but are hardly the reason for a singular housing crash in 65-80yrs of highly subsidized and distorted market for real estate.

Let’s give it a try at least let some air out in some places. We’ve done only the opposite for many generations and it’s gotten us here…

Well, if you look, these programs went hand-in-hand with the formation of a middle class. Do you think this is a coincidence? I don't.

But again, I'm game to try your path. I don't know of any leader in either party who's advocating this....do you?

I don’t think you understand how the stock and preferred were treated or how the employees behaved. They were all wholes who acted like they were on a mission firm god but pretending to be wall st guys. It below my mind when I lived in DC how cultish they were. And a lot do folks used them as back doors to the street like the ratings agencies. Fannie and Freddie were considered private effectively and ran/ reported a profitable business for ages. Don’t confuse Fan/fred w FHFA/HUD/VA - very different.


https://finance.yahoo.com/quote/FNMA/

https://www.anderson.ucla.edu/sites/def ... erlund.pdf

GSEs, G-SIBs, and Systemic Risk Capital Surcharges
By Wayne Passmore1
Board of Governors of the Federal Reserve System
and
Shane M. Sherlund
Board of Governors of the Federal Reserve System
February 2023
Abstract
Fannie Mae and Freddie Mac are government-sponsored enterprises (GSEs) that are global systemically
important financial institutions. The GSEs are unique institutions because the U.S. government chartered
them for a particular public purpose, but they have private shareholders. After their failure in 2008, the
federal government has held the GSEs in conservatorship for over 13 years. Ending the conservatorships
has been difficult, partly because of disputes concerning the amount of private capital the GSEs need to
hold.

https://www.reuters.com/article/busines ... WAT014283/

Ex-GSE regulator blames hybrid status for failure

-

Yes I find the correlation you are tossing out there uninteresting even if it actually lines up and I’m not sure it does nearly as nearly as you present it given the middle class was stronger in the 60s & 70s and housing really took off with the advent of securitization and tax code changes in the mid 80s. But it’s only a correlation when you layer in the relative landscapes and environments at those periods in time. So no I don’t find that argument compelling, any overlap or correlation you suggest to be compelling and truly related. Middle class story has many other much more significant drivers. Organic ones as well.

No pint in an aback and forth but I’m talking about where we are today, posting strongly that it’s a result of mass distortions many of which will have negative lifetime values to them I am certain for the public writ large. Nobody is able to utilize their homes as a wealth accumulation vehicle for the foreseeable future given demographics, rates and certain market conditions for inventory. Why continue the charade? What’s it going to benefit us vs f**k us up I’ve the next 25yrs not whatever you beloved it was worth in the past to do so. Nothing is forever and if someone tells me they do something evacsue that’s how it’s always end done either I leave or throw the other cat out

Again though my original objection was this near absolute layering of blame for the housing /GFC on bankers. What world and fragility are we living with that ent seeking intermediaries can do that much damage on their own? Surely the vast govt activities around housing and many other issues and distortions contributed something. Reality once emotions go down is it’s like 15% bankers / 86% govt/society. No defense of bankers broadly huh let’s be more thoughtful about how we arrived at that point than just “those fng bankers”.

[OCanada]

Let us not forget states and local government in the class labeled government.

[Farfromgeneva]

Let us not forget states and local government in the class labeled government.

All political subdivisions which have influence or can change, alter or transfer real property rights should be included.

Growing up in Binghamton was such a good experience living with the long term costs/obligations of “inhfrastructure” (human capital or other). Beautiful Victorians sell on long cycles for like $200-!250m because the taxes are like $15k on it

[a fan]

I don’t think you understand how the stock and preferred were treated or how the employees behaved. They were all wholes who acted like they were on a mission firm god but pretending to be wall st guys. It below my mind when I lived in DC how cultish they were. And a lot do folks used them as back doors to the street like the ratings agencies. Fannie and Freddie were considered private effectively and ran/ reported a profitable business for ages. Don’t confuse Fan/fred w FHFA/HUD/VA - very different.


https://finance.yahoo.com/quote/FNMA/

https://www.anderson.ucla.edu/sites/def ... erlund.pdf

GSEs, G-SIBs, and Systemic Risk Capital Surcharges
By Wayne Passmore1
Board of Governors of the Federal Reserve System
and
Shane M. Sherlund
Board of Governors of the Federal Reserve System
February 2023
Abstract
Fannie Mae and Freddie Mac are government-sponsored enterprises (GSEs) that are global systemically
important financial institutions. The GSEs are unique institutions because the U.S. government chartered
them for a particular public purpose, but they have private shareholders. After their failure in 2008, the
federal government has held the GSEs in conservatorship for over 13 years. Ending the conservatorships
has been difficult, partly because of disputes concerning the amount of private capital the GSEs need to
hold.

https://www.reuters.com/article/busines ... WAT014283/

Ex-GSE regulator blames hybrid status for failure

I truly appreciate your insight and explanations, thank you....I'm learning.

-

Yes I find the correlation you are tossing out there uninteresting even if it actually lines up and I’m not sure it does nearly as nearly as you present it given the middle class was stronger in the 60s & 70s and housing really took off with the advent of securitization and tax code changes in the mid 80s. But it’s only a correlation when you layer in the relative landscapes and environments at those periods in time. So no I don’t find that argument compelling, any overlap or correlation you suggest to be compelling and truly related. Middle class story has many other much more significant drivers. Organic ones as well.

For me, it's simple: ask any American if they've ever used their home equity to buy something....including a bigger house. When almost everyone says "yes", then you know how critical it is to the American economy.


No pint in an aback and forth but I’m talking about where we are today, posting strongly that it’s a result of mass distortions many of which will have negative lifetime values to them I am certain for the public writ large. Nobody is able to utilize their homes as a wealth accumulation vehicle for the foreseeable future given demographics, rates and certain market conditions for inventory. Why continue the charade? What’s it going to benefit us vs f**k us up I’ve the next 25yrs not whatever you beloved it was worth in the past to do so. Nothing is forever and if someone tells me they do something evacsue that’s how it’s always end done either I leave or throw the other cat out

Again though my original objection was this near absolute layering of blame for the housing /GFC on bankers. What world and fragility are we living with that ent seeking intermediaries can do that much damage on their own? Surely the vast govt activities around housing and many other issues and distortions contributed something. Reality once emotions go down is it’s like 15% bankers / 86% govt/society. No defense of bankers broadly huh let’s be more thoughtful about how we arrived at that point than just “those fng bankers”.
[/quote]Again: to me, it's simple. In the end, Fannie and Freddie and USDA et. al. are directed by Congress. That can even mean, obviously, that Congress let them do stupid things.

Bankers and Investment houses have free will. Some, as you know, famously avoided getting into risky derivatives and NINJA loans. If they can do it? Why couldn't the others?

And the answer is: greed and bonus structures incentivizing risky behavior. The .gov didn't FORCE them to make those choices. So I don't get how you think they're not responsible for their independent decisions. Same goes for the corrupt ratings agencies who didn't do an ounce of the actual due diligence they are PAID to do .....for YEARS.

[OCanada]

Housing is very important in growth of wealth snd as a factor in black white wealth disparities. Multigenerational transferrals

[Farfromgeneva]

I don’t think you understand how the stock and preferred were treated or how the employees behaved. They were all wholes who acted like they were on a mission firm god but pretending to be wall st guys. It below my mind when I lived in DC how cultish they were. And a lot do folks used them as back doors to the street like the ratings agencies. Fannie and Freddie were considered private effectively and ran/ reported a profitable business for ages. Don’t confuse Fan/fred w FHFA/HUD/VA - very different.


https://finance.yahoo.com/quote/FNMA/

https://www.anderson.ucla.edu/sites/def ... erlund.pdf

GSEs, G-SIBs, and Systemic Risk Capital Surcharges
By Wayne Passmore1
Board of Governors of the Federal Reserve System
and
Shane M. Sherlund
Board of Governors of the Federal Reserve System
February 2023
Abstract
Fannie Mae and Freddie Mac are government-sponsored enterprises (GSEs) that are global systemically
important financial institutions. The GSEs are unique institutions because the U.S. government chartered
them for a particular public purpose, but they have private shareholders. After their failure in 2008, the
federal government has held the GSEs in conservatorship for over 13 years. Ending the conservatorships
has been difficult, partly because of disputes concerning the amount of private capital the GSEs need to
hold.

https://www.reuters.com/article/busines ... WAT014283/

Ex-GSE regulator blames hybrid status for failure

I truly appreciate your insight and explanations, thank you....I'm learning.

-

Yes I find the correlation you are tossing out there uninteresting even if it actually lines up and I’m not sure it does nearly as nearly as you present it given the middle class was stronger in the 60s & 70s and housing really took off with the advent of securitization and tax code changes in the mid 80s. But it’s only a correlation when you layer in the relative landscapes and environments at those periods in time. So no I don’t find that argument compelling, any overlap or correlation you suggest to be compelling and truly related. Middle class story has many other much more significant drivers. Organic ones as well.

For me, it's simple: ask any American if they've ever used their home equity to buy something....including a bigger house. When almost everyone says "yes", then you know how critical it is to the American economy.


No pint in an aback and forth but I’m talking about where we are today, posting strongly that it’s a result of mass distortions many of which will have negative lifetime values to them I am certain for the public writ large. Nobody is able to utilize their homes as a wealth accumulation vehicle for the foreseeable future given demographics, rates and certain market conditions for inventory. Why continue the charade? What’s it going to benefit us vs f**k us up I’ve the next 25yrs not whatever you beloved it was worth in the past to do so. Nothing is forever and if someone tells me they do something evacsue that’s how it’s always end done either I leave or throw the other cat out

Again though my original objection was this near absolute layering of blame for the housing /GFC on bankers. What world and fragility are we living with that ent seeking intermediaries can do that much damage on their own? Surely the vast govt activities around housing and many other issues and distortions contributed something. Reality once emotions go down is it’s like 15% bankers / 86% govt/society. No defense of bankers broadly huh let’s be more thoughtful about how we arrived at that point than just “those fng bankers”.

Again: to me, it's simple. In the end, Fannie and Freddie and USDA et. al. are directed by Congress. That can even mean, obviously, that Congress let them do stupid things.

Bankers and Investment houses have free will. Some, as you know, famously avoided getting into risky derivatives and NINJA loans. If they can do it? Why couldn't the others?

And the answer is: greed and bonus structures incentivizing risky behavior. The .gov didn't FORCE them to make those choices. So I don't get how you think they're not responsible for their independent decisions. Same goes for the corrupt ratings agencies who didn't do an ounce of the actual due diligence they are PAID to do .....for YEARS.
[/quote]

Yeah what I'm saying is there are very dsitinct differences between USDA/FHA and FNMA/FHLMC - in their charters and otherwise. Fan and Fred were private companies with a govt backstop nothing more. One way to tell the difference? When a bank own a bond backed by a pool of FHA gtd mortgages is counts in weighted assets the regulators calculate as 0% (not an asset in the numerator which ends up in aggregate being divided by the total regulatory capital of the bank), Fan/Fred bonds are 20% risk weighted. NOT and explicit and direct gaurantee of the govt. It would be a mistake to think of Fan/Fred folks being govt workers.

[Farfromgeneva]

Housing is very important in growth of wealth snd as a factor in black white wealth disparities. Multigenerational transferrals

Was, turn out the lights the party is over.

Check this out

https://www.visualcapitalist.com/median ... income-us/

then this; you didn't have institutional investors aggregating affodable single family homes like this ever in the history of this country.

Researchers Find Three Companies Own More than 19,000 Rental Houses in Metro Atlanta
Researchers Find Three Companies Own More than 19,000 Rental Houses in Metro Atlanta
February 26, 2024

For rent sign in front of a house
Media Contact
Amanda Head
Manager, Marketing and Public Relations
College of Arts & Sciences

404-954-0220
[email protected]
ATLANTA — Three corporate landlords control nearly 11 percent of the single-family homes available for rent in metro Atlanta’s core counties, according to a new analysis led by Taylor Shelton, a geographer at Georgia State University.

Shelton, an assistant professor in the Department of Geosciences at Georgia State, along with his collaborator Eric Seymour of Rutgers University, investigated the ownership of rental homes in metro Atlanta and found that more than 19,000 were owned by just three companies — Invitation Homes, Pretium Partners and Amherst Holdings. The findings were published recently in the article “Horizontal Holdings: Untangling the Networks of Corporate Landlords” in the Annals of the American Association of Geographers, the discipline’s flagship journal.

“These companies own tens of thousands of properties in a relatively select set of neighborhoods, which allows them to exercise really significant market power over tenants and renters because they have such a large concentration of holdings in those neighborhoods,” Shelton said.

Metro Atlanta is facing an affordable housing crisis, and corporate landlords may be one of the reasons for that, according to a book by fellow GSU researcher Dan Immergluck. Beginning with the 2007 foreclosure crisis and continuing in the wake of the COVID-19 pandemic, many local landlords and homeowners were forced or decided to sell their properties, enabling companies that purchase buildings and rent them out for a profit, called corporate landlords, to snap up large numbers of homes.

In this new landscape, figuring out exactly who owns each property can be incredibly complicated.

Many large companies in the United States operate through smaller companies called limited liability companies, or LLCs for short. In the case of corporate landlord companies, these LLCs help protect the larger parent companies from liability or legal action that tenants might take.

“If a tenant is able to sue an LLC and win — they receive some level of damages and compensation for whatever harm they experience — the structure in place means that only the assets held by the LLC are used in calculating the appropriate level of damages,” Shelton said.

Shelton said corporate landlords tend to have a lot of LLCs to protect themselves. In the core metro Atlanta counties in his study — Fulton, Clayton, DeKalb, Gwinnett and Cobb — the three largest landlord companies have more than 190 LLCs between them.

These LLCs usually have multiple addresses, making it difficult to trace the ties between their locations and their parent companies.

To make things even more complex, many of these large companies are not traded publicly on the stock market, meaning their total number of holdings is not easily available to the public. Because Invitation Homes is publicly traded, the total number of properties it owns is available to the public through documents it is required to file with the U.S. Securities and Exchange Commission.

“The other two we analyze in this paper, Pretium Partners and Amherst Holdings, are backed by private equity and not publicly traded,” Shelton said. “So, there is no way to ever know what the full scope of their holdings are without a method like the one we used.”

Tenants find themselves with few options when they have a problem with their corporate landlord.

“Layers of interaction that have to happen before you get to the person who’s ultimately making decisions are increased. You have to talk to your property manager,” Shelton said. “Then, the property manager has to talk to their supervisor, who talks to the local or regional manager. Then they have to run things up. It creates this distance where you don’t actually know who your landlord is, so you don’t actually know who to make demands of.”

This is particularly relevant for Atlanta, which is the largest market for this kind of corporate landlord activity in the country, according to another study byShelton and Seymour.

“You have to add up the next two or three largest markets in the U.S. together to have the same amount of corporate landlord investment that Atlanta has,” Shelton said.

Shelton said metro Atlanta is one of the largest markets for this kind of activity for a few reasons.

“Corporate landlords like places that are growing, and they like places where housing is relatively cheap,” Shelton said. “But the other box that Atlanta checks is that we have very lax tenant protections.”

To address the situation, Shelton and his fellow researchers decided to make their methods of investigation available to the public.

“The hope is that anybody can take this method and replicate it even if you don’t have significant technical skills,” Shelton said. “We wanted to get to the skeleton of the logic of this process so that anyone can do it for anywhere and any company. All you need to have is the right data and then you can go from there.”

—By Katherine Duplessis

Featured Researcher