Bill Seidman, former chairman of the Federal Deposit Insurance Corpoation (FDIC), made some real sense today by calling for the break up and privatization of Fannie Mae and Freddie Mac.
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A mysterious Russian billionaire has trumped his big-spending rivals and broken a world record by splashing out €500 million (£392 million or about $750 million US) on one of the most sumptuous villas on the French Riviera.
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Morgan Stanley, the second-biggest U.S. securities firm, told thousands of clients this week that they won’t be allowed to withdraw money on their home-equity credit lines, said an inside source or person familiar with the situation.
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U.S. housing starts unexpectedly surged the most in more than two years in June because of a change in New York City’s building code that overshadowed a slide in single-family home construction.
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The FreddieMac/SallieMae debacle is EXACTLY what you get when an organization is mismanaged.
And you can’t get more mis-managed than the US Government. Too many occasions have shown us the absolute inadequacy governmental agencies have toward keeping budgets, promises and good financial stewardship. Sure, bureaucrats make many promises. And with budgets in the billions, it will take years to burn all the cash. But, if the American People don’t wise-up, then all governmental agencies, offices and government-controlled businesses will sink like a ship made of Swiss cheese. And who has to keep them afloat? Tax Payers.
Historically, the government was brought to bear when the private sector could not provide for the masses. Excuse me, but when was it stated that the masses had to be “taken care of”?
Government should only be involved to make playing fields even for all. As long as opportunity is available with not hidden strings or agendas, it then becomes the personal responsibility of each participant of the masses to achieve their own version of success. When the government is asked to redistribute wealth, manage public well-being or pay for basic necessities, you get Socialism. Plain and simple.
FannieMae/FreddieMac are Government Supported Entities that were charged with providing low-interest mortgages and other such vehicles to individuals who could not compete on their own within the private-sector. Example - If I am denied a particular product by CitiBank or GMAC, a similar product could be presented to me, funded by FreddieMac. As a matter of fact, I once had a student loan through Fannie Mae. It was low-interest and secured by government funds. The problem lies in the macro-economic question of “who pays for this?”. Tax dollars earmarked for military defense, national infrastructure or public sector pensions now have to be diverted to these entities or your taxes will be raised to pay for both. I do not like having my taxes raised when I get no immediate benefit. If the government learned to “do more with less”, then these two GSE’s would not have to be bailed out. Miss Management strikes again.
The New York Times said the administration of President George W. Bush is weighing the possibility of having to place one or both companies (Fannie Mae and Freddie Mac) in a conservatorship to protect them from the snowballing collapse of the US mortgage finance market.
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From the news wire at Marketwatch, an index of sales contracts on previously owned US homes fell 4.7% in May from April 2008 was reported by the National Association of Realtors this morning.
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New investors rarely stop to address the subject of risk tolerance. People who have never done a single real estate deal see others making a lot of money in real estate and want to jump right in. They never stop to understand the true risks of real estate.
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Folks - This one will be very short and sweet.
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The collapse of the housing bubble will likely have drastic implications on the wealth and retirement of certain baby boomers,
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