The Observation Deck

Stephen Calhoun wrote:Charlie, I will present soon some sources of information for those who are willing to invest the time to better inform themselves. I put a lot of stock in people making the behavioral investment in learning. Everybody has to decide for themselves whether such an effort is worthwhile.

For me, reading someone's uninformed opinion begs the question: what would said person opine if they were well informed?

Ask yourself what you would be willing to do to learn about a new subject matter that is--by definition--very complex. Where would you go?

Of course before one can go anywhere seeking information, one has to formulate some sort of crude or better set of questions which, in a sense, admits what is known and what is unknown and needs to be known.

You could do a lot worse than begin to scan the terminology of mortgage finance at Wikipedia. Because certified experts did coursework in finance, there's a huge academic resource available in the form of undergrad and grad level course syllabi. You have google scholar, and, at your world class local library you have at your finger tips enormous research databases.

It should be obvious, also, what are likely to be not very fruitful sources of information and, additionally, what materials CANNOT suffice as a foundation for even a modest 'lay' understanding.

My opinion is: it's a challenge for civic consciousness to become disenchanted with mere opinions, especially your own.

A new study from the widely respected National Bureau of Economic Research released this week has confirmed beyond question that the left's race-baiting attacks on the housing market (the Community Reinvestment Act--enacted under Carter, made shockingly more aggressive under Clinton) is directly responsible for imploding the housing market and destroying the economy.

The study painstakingly sorted through failed home loans that caused the housing market collapse and identified an overwhelming connection between them and CRA mortgages.

Again, let's review:

-President Bush went to Congress repeatedly for years warning them that Fannie Mae and Freddie Mac were going to destroy the economy (17 times in 2008 alone). Democrats continuously ignored him, shut down his proposals along party lines and continued raiding the institutions for campaign contributions on their way down.

Democrats and the media insist the Community Reinvestment Act, the anti-redlining law beefed up by President Clinton, had nothing to do with the subprime mortgage crisis and recession.

But a new study by the respected National Bureau of Economic Research finds, "Yes, it did. We find that adherence to that act led to riskier lending by banks."

Added NBER: "There is a clear pattern of increased defaults for loans made by these banks in quarters around the (CRA) exam. Moreover, the effects are larger for loans made within CRA tracts," or predominantly low-income and minority areas.

To satisfy CRA examiners, "flexible" lending by large banks rose an average 5% and those loans defaulted about 15% more often, the 43-page study found.

Who were the fools that were buying all these bad assets? There is only a lot of supply if there is a lot of demand.

Fannie Mae, Freddie Mac, and the Federal Home Loan Banks (FHLBs) are government-sponsored enterprises (GSEs) that help bring capital to the housing markets. Their regulator is the Federal Housing Finance Agency (FHFA).

HFAs and the Housing GSEs

Fannie Mae and Freddie Mac purchase and securitize loans from HFAs and other lenders who then use the proceeds to finance more mortgages. The FHLBs provide advances and other financial products to support their members’ affordable housing activities. The GSEs are critical in providing liquidity, stability and affordability to the mortgage market, particularly for long-term, fixed-rate mortgages.

Until recent years, Fannie Mae and Freddie Mac were large purchasers of Housing Bonds and Housing Credits. NCSHA is working with the Administration and Congress to encourage Fannie Mae and Freddie Mac to support HFA bond issuance and liquidity needs. NCSHA supports a strong, healthy GSE system in order to ensure stability, liquidity, and affordability in the home mortgage market. One of NCSHA’s Legislative Priorities is to ensure the GSEs support HFAs with liquidity and capital, through the purchase of HFA Bonds and Housing Credits and other means.

Peter Grossetti wrote:"All people are born alike - except Republicans and Democrats." ~Groucho Marx

ryan costa wrote:The United States passed a legal tender act back in the 1860s. they managed it well.

The Confederate States tried a similar act, but they were bad at all forms of management and lawmaking.

the federal deficits are intrinsically tied to Reaganomics and Free Trade.
Under an artificial or legally binding gold standard, we would simply be out of gold, in addition to owing foreign debt holders a lot of numbers on accounts. just like many southern plantation owners owed british merchants. Only nationally.