After a day like yesterday, I guess we have to take our humor where we can find it. I thought the funniest statement to come out of the whole market debacle yesterday was this explanation for financing the homeowner "bailout" just passed by the Senate:
Lawmakers and the Bush administration agree on the central concept behind the housing package: allowing the government to backstop new mortgages for struggling homeowners.
To make it more palatable to Republicans, the Senate measure would take responsibility for any losses away from taxpayers and instead cover them by diverting a newly created affordable housing fund drawn from Fannie Mae and Freddie Mac profits.
What profits?
Northern Virginia Housing Bubble Fallout
Bubble Meter
UK House Bubble
Ohio Fraudclosure
Mish's Global Economic Analysis
Breaking News Relevant Articles© Copyright 2012 Housing Doom | Copyright© 2011, AuthentiCraft, Inc.
and the spin goes on
What profits?
Remember “Gain on Sale” for pooled mortgages that could require replacement? As long as the ‘cash flow’ grows, GAAP can rock what you want. Especially with Fannie and Freddy’s record for bookkeeping. Let the Deep Debt..OOps, I mean Consumer Credit Economy roll on.
Igor says:excess
Well it’s really quite simple…..
- We buy crap at wal mart so China has lots of $$
- They buy real Govt. Debt and mortgage bonds to park the $$
- Now they hear the mortgage bonds aren’t worth much
- So we issue more Govt. Debt (that China buys) so we can cover enough of the mortgage losses
- WHALA!! A $5 Trillion dollar cash out RE-FI so that we can lower the payments and finally afford that pool and granite!!!
You see twist, we’ve been financing everything using debt up until now. But that’s falling apart, so now we’ll finance housing with F&F’s losses. Think of it as paying off a loan with negative money. Or the opposite of money. It’s quite simple really
sandman -
Did you ever read my Jan ’07 post “Quantum Finance and Synchronicity”?
Note to Admin: One of the recent swarm of post spams appears to be still at the bottom of this post.
By the way, there is a “real” theory in academic circles that deals in this stuff.
I’m presently working on a theory of anti-Thought to explain how QSPEs stayed up as long as they did, among other things
“Shocking,” says Igor. I think it’s going to take more than this to shock anyone these days. Consider that yesterday say the third largest bank failure in US history and almost nobody noticed.
Sandman-
It’s too bad I can’t use the same sort of economics with my creditors- no real money- no real utilities or groceries.
twist -
Your quote was edited out of the article yesterday evening.
Tesia-
You are right.
I hate it when they do that.
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