President Obama: Wind Down Fannie & Freddie

[NightFox]

Source: U.S. Housing Finance News | HousingWire
Date: 8/6/2013
Link: President Obama reveals housing plan | 2013-08-06 | HousingWire

Excerpt:
"Moving forward, the president believes it is imperative that Fannie Mae and Freddie Mac start to wind down. “The good news is, right now there’s a bipartisan group of senators working to end Fannie and Freddie as we knot it,” said Obama, who noted he supports a limited government role."

On the surface this is an idea that should have been implemented a LONG time ago, the laying off of mortgage origination risk unto entities implicitly back stopped with tax payer money was a big factor in turning the housing market into a giant casino.

As always with Washington the devil is in the details, anybody want to take bets that congress will take a good, straightforward win-win idea and fill it full of special interest "sweeteners", pork and other market manipulating nonsense? not to mention abrogating their Constitutional responsibilities and leaving it up to unelected bureaucrats in the Executive Branch to actually write all the rules.

I'll give the President credit, this is an idea that has the potential to make important positive structural reforms to our financial system, however I think there's little doubt that Congress will turn it into a "I have to win, so you must lose" scenario and the implementation will be far from optimal.

 

[Rct_Tsoul]

Yea ............ unfortunately the upper 1% will be going for a helicopter ride very soon if we can't find a way to get control of things again.

 

[editec]

Oddly enough (or perhaps predictably enough, given who and what I am) I'd have gone is exactly the opposite direction.

I'd have gotten private banks out of lending on homes in the USA entirely, and left that task the FED.

Of course so much else would have to change with our banking system to make sense of the above, that it's never gonna happen.

 

[NightFox]

Oddly enough (or perhaps predictably enough, given who and what I am) I'd have gone is exactly the opposite direction.

I'd have gotten private banks out of lending on homes in the USA entirely, and left that task the FED.

Of course so much else would have to change with our banking system to make sense of the above, that it's never gonna happen.

Leave it up the Fed? MORE central planning to address a problem caused by central planning? not to mention handing off yet another contradictory mandate onto the shoulders of the central bank.

The Fed already has principle influence on the credit markets and the Fed already demonstrated that it's judgement is suspect given it's starring role in the "sub-prime" crisis and the direct and indirect bail-outs without legislation it authored in the aftermath. I for one don't even trust the Fed to perform what should be it's principle and only mandate (currency stability) let alone inviting it to be the only arbiter of mortgage origination, the interlock between risk and reward was made weak enough by the creation of Fannie & Freddie, giving it to the folks with the printing presses would just make it disappear altogether.

You'll have to explain your rational in detail for that one since on the surface it points to a singularly counter-productive strategy.

 

[Rct_Tsoul]

I'd have gotten private banks out of lending on homes in the USA entirely, and left that task the FED.

Since the US Federal Government will soon control all liquid cash and resources on the face of the earth, combined with its political clout & backed by the armed registered voting sheeple America that is protected by the Mighty American War Machine ........... sadly .......that is what will happen.

The tyranny of the armed registered voters of America has lasted for over 200 years ........ and it is time for it to end NOW.
If the American gun clinging sheeple hold out to the end of this year ......... all will be lost, their tyranny will endure into the ages of ages.

It time to Move Forward, and bring the sheeple to their knees and make them REPENT for their tyrannical ways.