Housing Finance Kabuki: Moving from an ‘implicit’ to an ‘explicit’ government guarantee, taxpayers last in line and holding the bag (again)

10:39am EST- Geithner panel done, Donovan panel beginning.

ZeroHedge notes the ELEPHANT- if Gross wants to nationalize FAN FRED we have to take that second set of books into account…

In fact, Gross urged a move one step further, with the full nationalization of the GSEs – as the GSEs are nationalized now in all but writing, this would be logical. Alas, the fact that US Debt to GDP would jump from 90% to 140% may make this proposal a little difficult to implement.

It is incredibly obvious, to me anyway, that the plan is to convert all those foreclosures to GSE Section 8 rentals with taxpayer subsidized guarantees and payments. And to think all those people didn’t want to help the homeowners. HA!! Now we will help renters instead. PS I dont see Mark Zandi…..good, he has been WRONG, wrong on the spendulus, wrong on the recovery, wrong, wrong, wrong.

and Bill Gross keeps calling Geithner, Tim, which reminds me of Sen Tester calling Chairman Bernanke, Ben, during the last Humprhey Hawkins testimony. I find it very disconcerting. PRETEND you dont own these people mkay? sheesh.

Update 4: Bill Gross says let me address reality. It is an 11 trillion dollar market and a large place for private entities here is unrealistic.

Update 3: LiveStream from Treasury here, list of panelists at bottom of this post. Oh look it has occurred to Mark Morial-one of the panelists that this would create a ‘class of Section 8 renters’. Yep. Timmeh says, well Marc, if we maintain the FHA giving generous subsisdies to people who buy a more modest house would that address your concerns? Yes says Marc,

Pfft! Require housing counseling, etc. Oh here we go BACK TO CRA good grief. As long as everyone gets ‘theirs’ frak the taxpayers right people? Jeebus! Marc says as long as Main St and Back St get covered we are aall good. O..M…G… Main St is PAYING FOR ALL THIS SHXT!!!!!

Update 2: I knew it I frakking knew it!! these frakkers are going to turn this into Section 8 rentals nationwide, arrrrgle- and see this as well

The government should create an apartment real estate investment trust (REIT) to rent out foreclosed properties — a method that would avoid flooding the housing market with foreclosed properties, a real estate consultant said as President Obama’s “Future of Housing Finance Conference” kicked off Tuesday.

John Burns, CEO of John Burns Real Estate Consulting, said the government-created REIT would be self-sustaining via rental fees. The government-sponsored enterprises, Fannie Mae and Freddie Mac, would hire outside property-management firms to manage the rental properties, Burns said….

and another update from Jimmy P, Gross is throwing his CONSIDERABLE weight around (biggest bond playahs worldwide!)

JimPethokoukis

Housing Conf. Bill Gross: Comes out for a Giant Refinancing Plan for America. 1 minute ago via web

JimPethokoukis

Housing Conf. Pimco’s Bill Gross: Too many homeowners, houses – more renters; 1 giant GNMA replacing Fannie, Freddie; Need govt guarantee;

Update: Follow JimmyPethokoukis on Twitter for updates from the conference!!~

Housing Secretary Sean Donovan: Being a homeowner not the right option for everyone

ZeroHedge has a nice write up. Geithner is on record indicating the implicit guarantee needs to be explicit, and PIMCO’s Bill Gross is REALLY CLEAR they will NOT be buying any mortgage securities unless we move back to a 30% down model. Since the government will not ‘take the pain’, pain we taxpayers KNOW is ALREADY coming for US BTW, they need to reflate the bubble, so Bill gets what Bill wants, an explicit guarantee…guaranteed!

ZeroHedge (go read the whole thing!):

Tomorrow, a variety of luminaries, such as Bill Gross and Mark Zandi, will be panelists in a worthless and futile spectacle titled “Conference on the Future of Housing Finance ” which has the aim of doing something or another to extend and pretend the ticking timebomb that are the bankrupt GSEs. It will most certainly succeed in that regard. What it will definitely fail at, is to provide some resolution to the $7 trillion mortgage “holding” problem, which incidentally was the first domino to fall in 2008, which just so happened nearly took down western-style capitalism with it (and morbidly, it should have: the result would have been a system infinitely better).

Yet as we prepare for this hearing (and try to track down Mr. Gross’ testimony to validate his previous statement that absent an implicit government guarantee he would buy MBS/Agency securities only with 30% down), here is another view, this one from none other than Edward Pinto, who himself was an executive vice president and chief credit officer at Fannie Mae in the late 1980s. As Pinto says, echoing the previous high dB statements by Rick Santelli, “We’ll never get a rational mortgage system until the government’s affordable housing mandates are ended.” We couldn’t agree more….

From Pinto, the BAD news for taxpayers:

…A consensus is building around a three-part grand bargain:

• An explicit federal guarantee of a large portion of the mortgage-backed securities created to finance American’s home mortgages;
• A tax on these securities to fund low-income housing initiatives; and
• A requirement that issuers of securities meet affordable housing mandates.

This is a dead end for two reasons. First, while supporters of an explicit federal guarantee tell us it will never be called upon, Americans have read this book before and know how it ends….

Panelists:

Diana Farrell, NEC Deputy Director

Treasury Secretary Geithner

HUD Secretary Donovan

Barbara J. Desoer, President of Bank of America Home Loans

Ingrid Gould Ellen, Professor of Urban Planning and Public Policy at New York University’s Wagner Graduate School of Public Service and Co-Director of the Furman Center for Real Estate and Urban Policy

Bill Gross, Co-founder and Co-chief Investment Officer of PIMCO

Mike Heid, Co-president of Wells Fargo Home Mortgage

S.A. Ibrahim, Chief Executive Officer of Radian Group Inc.

Marc H. Morial, President and Chief Executive Officer of the National Urban League

Alex Pollock, Resident Fellow at the American Enterprise Institute

Lewis Ranieri, Chairman of Ranieri and Company, Inc.

Ellen Seidman, Executive Vice President for Mission and Strategy, at ShoreBank Corporation, and Chair of the Board of Directors at the Center for Financial Services Innovation

Michael A. Stegman, Director of Policy and Housing for the Program on Human and Community Development of the John D. and Catherine T. MacArthur Foundation

Susan Wachter, Richard B. Worley Professor of Financial Management, Professor of Real Estate, Finance and City and Regional Planning at the University of Pennsylvania’s Wharton School

Mark Zandi, Chief Economist of Moody’s Analytics

August 17, 2010. Tags: , , , , , , , , , , . Economy, Finance, Foreclosures, Housing, Obama Administration, Politics, Popular Culture, TARP, Taxes, Unemployment Statistics, Wall St. 1 comment.

Bill Gross: ‘this recovery will be different’

Bill Gross, PIMCO, reiterates the new normal, the recovery, the end of stimulus, the consumer continuing to deleverage and the impact on the American economy

Vodpod videos no longer available.

CNBC:

…Speaking just after the government said January saw the loss of another 20,000 jobs even as the unemployment rate fell to 9.7 percent, the Pimco co-CIO said the jobs weakness will make for a difficult transition to prosperity.

“We think that it’s substantially different this time, based upon the fact that instead of levering we’re delevering and instead of deregulating we’re regulating,” Gross said. “Both of those conditions in combination produce a very weak economy, very slow growth and ultimately have effects on asset markets that depend on asset appreciation.”

…”Four percent growth in the first quarter is probably a reasonable expectation,” he said. “But the unemployment is a long-term structural problem.”…

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February 5, 2010. Tags: , , , , , , , , , . Economy, Finance, Labor Department, Obama Administration, Politics, TARP, Taxes, Unemployment Statistics, Wall St. Comments off.

More happy talk from Bill Gross: “The standard of living in the US is likely to go down with the dollar, as “we’ve spent too much” over the past 20 years…

(more…)

October 28, 2009. Tags: , , , , , , , , , , , , , , . Economy, Finance, Housing, Obama Administration, Politics, Unemployment Statistics, Wall St. Comments off.

Market Mover Tuesday: Home prices rise 1.2% m/m, Consumer Confidence drops sharply shocks forecasters…

wall_st_bear_small

They are SHOCKED, SHOCKED I say that we consumers are not feeling the happy happy joy joy. WE HAVE NO JOBS YOU NITWITS!!!!

They feel we should be excited about a 1.2% m/m home price increase, even though we are still dropping y/y. Face it, NO housing value increases to write home about (pardon the pun) while unemployment and thus foreclosures are rising….In other scary news PIMCO’s Bill Gross is warning about pressure on credit.

CNBC:

Consumers’ confidence about the U.S. economy fell unexpectedly in October as job prospects remained bleak. The Conference Board’s Consumer Confidence Index shows Americans are as worried about the economy’s current state as they’ve been in nearly three decades.

They also have a grim outlook for the future, expecting a worsening business climate, fewer jobs and lower salaries.

That sentiment drove Tuesday’s results, which showed the index falling to 47.7 in October. Analysts surveyed by Thomson Reuters expected a reading of 53.1.

A reading above 90 means the economy is on solid footing. Above 100 signals strong growth…

October 27, 2009. Tags: , , , , , . Economy, Finance, Foreclosures, Housing, Obama Administration, Politics, Popular Culture, Unemployment Statistics. Comments off.

‘Barney Fife’ Stock Market Ready for a pullback: Bill Gross

LOL, Axelrasputin and TOTUS practice the preamble? BWAAAHAAAAAA!!!

When PIMCO speaks, the Fed listen, lol. ‘With nearly $1 trillion assets under management, Gross runs the largest bond fund in the world at Pimco.’

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William Gross, of Pimco; Robert Doll, of BlackRock; and Daniel Tishman, of Tishman Construction, share their market insight.

“We’ve got a Barney Fife market. Not sure what Barney would say about the market—you could imagine some sort of goofy, speculative market running far too high,” Gross said in a live interview. “We think the market…is due for a pullback or setback only because it’s gone so far and economic growth cannot go so far.”

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Andy Griffith Show courtesy of hd95

September 22, 2009. Tags: , , , , , , , , . Economy, Finance, Obama Administration, Politics, Unemployment Statistics, Wall St. 2 comments.

Stiglitz agrees with MiM ‘W’ economic forecast…

Hey let’s put on some Ritz MiM style, the grand chief poohbah high muckety mucks of the ivy league intelligentsia Feldstein, Stiglitz, Krugman, Gross you know their names…and they all loved them some Obama…Well now Stiglitz is the latest to go on record echoing MiM’s position which we took here on the blog lo these many moons ago…the flat L leading to the double dip….

CNBC:

Nobel laureate economist Joseph Stiglitz on Thursday gave a gloomy assessment of a rebound in the U.S. economy, saying he does not see a resurgence in the strong consumer spending that has been a key driver of growth.

poohbah…But Stiglitz said the U.S. economy faces the possibility of low economic growth over a long-term period or the possibility of a “double-dip” recession whereby a recovery is not sustained.

It is not possible to predict whether we have a malaise or a W (shaped growth pattern). But there is a significant chance of a W,” he said. “It is not as if the second dip is going to be as bad as the first dip,” he said. Instead, it could mean the economy rotates through a process of low growth followed by contraction.

“We are not seeing a recovery of sustained consumption,” in the United States, said Stiglitz, who said he has been consulted on an informal basis by the Obama Administration to talk about the major economic issues….

Gee I wonder why, ‘we are not seeing a recovery of SUSTAINED CONSUMPTION’?? Could it be because THE FRAKKIN IDIOTS IN DC ARE SCARING THE EVER LOVIN CRXP OUT OF WE CONSUMERS WITH THEIR HARE BRAINED SPENDING AND TAX PLANS??!! HMMMMNNN? Could be rabbit, could be!!! Is TOTUS doing bugs? Would I add this gigantic spending plan if the economy was about to collapse in a second leg down? You might TOTUS you might!

Have said it before, will say it again- What a bunch of maroons. For a group of the ‘Smartest People Evah’ they are awfully dense about how their ‘visionary changes’ impact real world consumers. Their pie in the sky ideas of de-industrializing the US and slowing population growth and greening everything and the greater good, cap and trade, change housing codes nationwide, pay cash for clunkers, take over car companies, then health care, they are really SHOCKED that 21 Century Americans do not want to go all ‘neo socialist Luddite’ with them…

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They can claim anything they want, but they pixxed away 800 billion in ways that do not help the consumer feel safe and spend, have jobs and spend, pay off some debt and spend. There is no THERE there in that spendulus. All it did was ADD to consumers low expectations and high deficit concerns. The S & P financials are headed for a second crash IMO, commercial RE is about to hit the FDIC in a wave of bank failures and the end of 2010-11 will see a tripling of the current residential foreclosure wave as we have discussed here before.

They are SOL in the 2010 elections, they simply don’t have the money to fix what they have done with the spent bullets of the spendulus and TARP bazooka, they are out of ammo, the FED is making noises that they are split on continued quantitative easing and MBS purchases. Bill Gross at PIMCO says they will have to stay loose and keep buying to keep rates low or send housing off the second cliff. This is precisely why Krugman was suddenly pro giant deficit and Gross is making noises about the end of stimulus being a problem.

News flash geniuses Americans will not support ANY MORE GIANT SPENDULUS bills. That ship sailed baby, and sunk. It was overloaded with ‘interest group’ payoffs…I heard an analyst on Caterpillar CAT today talking about how the spendulus was less than 3% infrastructure and CAT will not have a bump in 2010. Remember TOTUS in Elkhart and talking with CAT workers? How awful. And now Pete Stark D-outoftouch is talking about laying a tax on all Wall St stock transactions to pay for billions in what? You guessed it INFRASTRUCTURE. Fuggedaboudit.

Treasury is out talking up additional mortgage help for homeowners as they see all this coming, and yet in the face of all this Team TOTUS is STILL going to attempt a 1 trillion dollar health care bill? The Administration needs to find religion and go moderate or 2/3 of Congress can go home in 2010…

Young Frankenstein courtesy of cristiancd

Bugs Bunny courtesy of chrispdx

September 3, 2009. Tags: , , , , , , , , , , , , , , , , , , , , , . Economy, FDIC, Finance, Foreclosures, Healthcare, Housing, Obama Administration, Politics, Taxes, Unemployment Statistics, Wall St. 3 comments.

Housing and the Federal Reserve….

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Bill Gross at Pimco is saying the Fed needs to let the 10 yr float above 4% to attract private investors like himself, while Mark Zandee notes the Fed needs to increase MBS purchases to drive the 10 yr back down and keep boosting refis….dueling economists baby

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May 29, 2009. Tags: , , , , , , , . Economy, Finance, Housing. Comments off.

Outlook From the Bond King – CNBC.com

Mohamed El-Erian of Pimco on the future of the economy….

a PRIVATE SECTOR LED ECONOMY to reduce unemployment he advises, gee what a novel idea!! Notice the yields on the 10 yr Mohamed references….

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May 27, 2009. Tags: , , , , , , , , , , , , , , , , , , , , , , . Economy, Finance, Labor Department, Obama Administration, Politics, Taxes, Uncategorized, Unemployment Statistics, Wall St. Comments off.

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