Pumping another 200 billion in Fannie Mae and Freddie Mac

Troglodyte27 said:
The 3% down, no closing cost loans from FHA are STILL available. WTF?

My dumbass nephew just got one of these on a $240,000 property. The monthly PITI is ~$1800/month. That is more than HALF of his GROSS. I told him to not do the deal, and that I figure he won't last 5 years before he's into a foreclosure / bankruptcy. His cash reserves? $3000.
Click to expand...

Ouch.
 
uscitizen said:
The global economy changes things a lot since the great depression. We will survive, yes, but we may just be a shadow of what we were.
Survival can be miserable.
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The "cure" may well cause a worse outcome than the untreated disease...

I mean look at the above post. We can't even muster the will to STOP creating future financial bombs! I don't think shutting down the mortgage market is healthy, but we need to get to some rational underwriting basis. The banks have do so pretty much, but FHA is not a bank...
 
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Topspin, why do you support the manufacture of further credit through borderline off balance sheet (supposedly) government backed enterprises? This is just a massive credit sop that will do nothing to the fundamental credit quality issues underlying the (borderline bankrupt) US (and thus global) financial system.

They think they can pull a Japan and cut rates to zero? That aint happening when you import all your goods from China and oil is at $100+ a barrel, you'll be importing inflation in the same way we all imported deflation throughout most of the nineties and the early millenium. The stats bureaus can carry on fudging the numbers but that can only work for so long. The confidence trick of highly structured finance is unwinding (slowly) and we still have a long way to go.

Selling puts on Citigroup at $10, roll up roll up.
 
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