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Post a Comment On: Steve Sailer: iSteve

"Treasury announces bailout plan for Fannie Mae and Freddie Mac"

23 Comments -

1 – 23 of 23
Anonymous Anonymous said...

I kept tripping over the word 'underserved', it's so easy to take it to be 'undeserved'.

7/14/08, 2:45 AM

Anonymous halfbreed said...

Surrising that this angle hasn't been covered by the NY Times yet.

7/14/08, 2:57 AM

Anonymous CJ said...

Here's a rare example of an analysis of the mortgage meltdown that deals with both coerced preferential lending to "minorities" and ACORN.

Viewpoint: Mortgage Mess Generates War of Entitlement
Short, succinct, and I wonder if this guy is one of your readers. Definitely RTWT.

7/14/08, 3:52 AM

Anonymous Anonymous said...

This may be the next Federal agency in crisis -- FHA. Last week my wife sold the house she has been trying to unload for fourteen months. We reduced the price three times and only then received an offer. The buyers -- an unmarried college couple who needed us to chip in $5K to buy points on their FHA loan which has a first year rate of 3.8%, moving to 7.8% in the third year. And they had to take second mortgage to make their down payment. My wife and I were stunned that the Govt is still underwriting loans like this.

7/14/08, 6:52 AM

Anonymous headache said...

halfbreed said...

Surprising that this angle hasn't been covered by the NY Times yet.

Yeah, they're hacking out something as we read, for sure. They just have to find that typical NYT angle again. Even though it’s so obvious you would walk into it if you were looking the other way, trust the NYT to create an unexpected angle on it. Probably something to do with those pesky white racists.

7/14/08, 7:18 AM

Anonymous Anonymous said...

Why does Krugman say this?

"Also, they didn’t do any subprime lending, because they can’t: the definition of a subprime loan is precisely a loan that doesn’t meet the requirement, imposed by law, that Fannie and Freddie buy only mortgages issued to borrowers who made substantial down payments and carefully documented their income.

"So whatever bad incentives the implicit federal guarantee creates have been offset by the fact that Fannie and Freddie were and are tightly regulated with regard to the risks they can take. You could say that the Fannie-Freddie experience shows that regulation works.

"In that case, however, how did they end up in trouble?

"Part of the answer is the sheer scale of the housing bubble, and the size of the price declines taking place now that the bubble has burst. In Los Angeles, Miami and other places, anyone who borrowed to buy a house at the peak of the market probably has negative equity at this point, even if he or she originally put 20 percent down. The result is a rising rate of delinquency even on loans that meet Fannie-Freddie guidelines."


I have also read that this is all the Republicans' fault because they are the sorts who push for "less red tape" and less regulation of mortgage lenders.

It's confusing to follow these complicated issues because people just seem to say whatever they want.

7/14/08, 8:22 AM

Anonymous David said...

Combining this with the earlier story about black crime spreading to the suburbs, we get a possible back story for my anecdote. I got a starter house in a starter North Florida neighborhood in 99. Over the next two years, as my first neighbors flipped upward and onward, an amazing cohort moved in. Section 8 types replaced my money-conscious but peaceful and notable-for-their-probity former neighbors. Motorcycles, loud hip-hop, gangs of urchins playing in the street and refusing to move aside for cars, my wife's morning walks curtailed because of dangerous dirty looks from ghetto types...In short, there goes the neighborhood. No place to raise a child. I sold just in time ('03). Oy, wonder who has their houses now? Thanks, Freddie and Fannie!

7/14/08, 8:48 AM

Blogger kurt said...

You hear all the time how this problem is impacting the Hispanic and African-American communities. However, one does not hear a peep about how this is affecting the Asian-American or Asian immigrant communities.

Has anyone else here noticed this difference? I'm certain that is is most politically incorrect to point this out.

7/14/08, 9:32 AM

Anonymous none of the above said...

Damn.

That's so evil, it's a thing of (repugnant) beauty. Make a bunch of money by convincing poor people to screw themselves out of what savings and credit they have. And then, leave a hell of a mess for the taxpayers to clean up.

Wow. How the hell are we ever going to find enough tar and feathers to clean up this mess?

7/14/08, 10:49 AM

Anonymous Anonymous said...

Part of the answer is the sheer scale of the housing bubble, and the size of the price declines taking place now that the bubble has burst

One can imagine the lump forming in Krugman's throat as he pictures his heroic government regulators confronted by the sheer scale of this bubble and the size of the price declines. Oh the humanity...

Where then did this bubble come from? What forces could possibly drive prices up a curve with no rational basis? As somebody might say, it's a mystery, a conundrum, a puzzlement ... If even the brilliant Krugman cannot figure it out, then we should just leave these questions be.

--Senor Doug

7/14/08, 3:05 PM

Anonymous anony-mouse said...

Perhaps it would make for a shorter article to list who wasn't part of this mess.

Maybe seniors, children, and the homeless?

7/14/08, 4:05 PM

Anonymous Roger Chaillet said...

Too bad Steve didn't cite money manager Marc Faber (Swiss national educated in Switzerland) and his comments from the Barron's round table discussions earlier this year.

He said that never before in history has someone been able to get 100% financing with no credit check, but with just a signature on a loan application.

I know this as I used to work in the mortgage business. In order to rent an apartment you must have one month's worth of rent for the deposit, plus the first month's rent in advance. During the home ownership boom you could get 100% financing; in some cases it was as high as 100+%!

This boom and subsequent bust will rank up there with tulipmania and the South Sea Bubble.

7/14/08, 5:50 PM

Anonymous Anonymous said...

Steve, shut the fuck up about the Bubble.

YOU DO NOT UNDERSTAND THIS TOPIC.

You are so far off the mark, its not even worth trying to point out where you are wrong.

Go talk about "Big Men" or something.

7/14/08, 7:47 PM

Blogger RobertHume said...

Steve,

I understand that there is a gigantic bubble in England also. Is there a similar "lending to minorities" cause there?

I hear there is a bubble in Spain also. There there are also lots of immigrants from Mexico and South. And lots from North Africa. So that may be the same cause there.

7/14/08, 8:10 PM

Anonymous travis said...

How this for a hard luck real estate story? In 1916 Vladimir Nabokov inherited this estate from his uncle, only to lose it in the Russian Revolution the next year. He never owned property again.

He set much of his novel Lolita in hotels rather than homes to suggest, I think, our rootlessness, displacement and, ultimately, our vulnerability.

7/14/08, 8:22 PM

Anonymous AllanF said...

One subtle point of clarification: the bubble and aftermath was not directly and exclusively from affirmative action lending. Rather, like grade inflation at the Ivy's it was from lowering the standard for purposes of AA, and then using the lowered standard across the board.

And this touches on the under-lying point Steve has made many times: if we as a society could be honest about race and IQ we could debate whether we want to maintain the two sets of standards AA practically requires. Instead we lower a standard across the board, then are shocked, shocked! when it gets gamed.

Again, blacks are 13% of the population. Doubling the home-ownership rate among that small cohert in and of itself would not have created the bubble of epic proportions we now see popping. It took a confluence of many factors. Lowered underwriting standards for AA lending seem the start of the snowball, but by the bottom of the hill, there was alot more snow on the ball.

7/14/08, 9:59 PM

Blogger Steve Sailer said...

Nabokov was also the heir to his mother's bachelor brother, who had an even vaster estate. (Plus they had townhouses in St. Petersburg.)

Besides being driven out of Russia, the Nabokovs were driven out of Germany in 1936 and France in 1940.

He never wanted to buy any property after that because he feared it would interfere with his memories of his childhood homes. So, when he taught at Cornell, he and his wife house-sat each year in the home of a professor on sabbatical.

Mrs. Nabokov must have been a saint. She put up with this kind of lifestyle for decades, confident that her husband was a genius. Finally, in 1958, when he was 59 years old, the world agreed.

7/14/08, 10:10 PM

Anonymous Anonymous said...

"I understand that there is a gigantic bubble in England also. Is there a similar "lending to minorities" cause there?"

Probably not, our minorities usually live in subsidized slums and we have less of them. I would suggest the overvaluation of housing stock is the result of certain economic policies (money supply, planning permission, capital gains tax) that encourage investment in these particular assets.

We do have our sharp practises mind, brokers suggesting that borrowers should invent a second income and such.

7/15/08, 6:21 AM

Anonymous headache said...

Interesting how "truth" is AWOL on these boards where the storyline is so obvious even he cannot fiegn it without looking like an ass.

7/15/08, 6:58 AM

Anonymous Anonymous said...

Fannie and Freddie were hijacked by Congress for political purposes and crashed into the ground. The pilots were Barney Frank, Chris Dodd, Chuck Schumer and the Congressional Black Caucus. This has happened before. Congressional incompetence caused the last economic debacle in the S&L crisis when over a thousand banks failed in the early 1990's.

7/15/08, 11:43 AM

Anonymous JeremiahJohnbalaya said...

Anonymous said...
Why does Krugman say this?

Over at Heritage, they ask Who Does Paul Krugman Think He’s Fooling?

Where to begin? First let’s stipulate that Fannie and Freddie never did “any subprime lending” … but not for the reason Krugman states. Freddie and Fannie never do any lending: They buy mortgages from lenders only, so that those lenders have more cash to make other loans (like subprime ones). But Krugman is either lying or being intentionally obtuse when he says “Fannie and Freddie buy only mortgages issued to borrowers who made substantial down payments and carefully documented their income.” The Washington Post reports: ... In 2003, the two bought $81 billion in subprime securities. In 2004, they purchased $175 billion — 44 percent of the market. In 2005, they bought $169 billion, or 33 percent. In 2006, they cut back to $90 billion, or 20 percent. Generally, Freddie purchased more than Fannie and relied more heavily on the securities to meet goals.

Let’s review that last paragraph again. Krugman is trying to convince his readers that Freddie and Fannie are only innocent bystanders in the housing bubble. Fannie and Freddie purchased 44 percent of the subprime securities in 2004. Does that sound like the behavior of an innocent bystander to you?

7/15/08, 1:12 PM

Blogger Truth said...

"Interesting how "truth" is AWOL on these boards where the storyline is so obvious even he cannot fiegn it without looking like an ass."

Youuuu Rannnngg?

Actually, headache, there's where you're wrong; even when I will look like an ass, I have no problem faking it.

Being requested by name does make a ni... all misty inside though.

Actually my friend, here's some asprin for you:

http://www.overseaspropertymall.
com/trends/the-big-global-bubble-
has-burst/

This is an article about how the housing bubble is a GLOBAL phenomenon. Here are a few excerpts:

"An Irish couple bought their one bedroom apartment in Dublin in 2006 at the peak of the local market for $575,00. This very same apartment is now worth around $100,000 less than then."

But how can this be, headache, there is practically no black population in Ireland, and what is there came from Africa five years ago, ergo; not qualifying for home loans.

Another excerpt:

"World real estate bubbles are showing cracks right now everywhere we look. The NY Times posted the ugly truth the other day on how the U.S housing market collapse is slowly but surely affecting worldwide markets such as Spain, Britain, Ireland, China, Hong Kong, as well as in eastern Europe."

Hummmmm; the black gang bangers in Hong Kong, Shanghai, Barcelona, Bratislava, and Wausau must have had a field day throwing hip-hop in those medieval castles and pagadodas.

So, it looks like you're going to have to increase the horsepower on that Caddy Eldorado, Boss Hogg, or else Luke and I will keep running circles around you and Roscoe in t he General Lee every week. Of course at the end of the hour you are guaranteed to end up with your face, and your pretty white suit, in a pile of shit.

7/16/08, 8:24 AM

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7/16/08, 8:29 AM

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