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The Water Cooler
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Only 47% Of Working Age Americans Have Full Time Jobs
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<blockquote data-quote="Billybob" data-source="post: 1462776" data-attributes="member: 1294"><p>Banks Want Pieces of Fannie-Freddie Pie</p><p></p><p> As the Obama administration prepares a report on the future of Fannie Mae and Freddie Mac, some of the nations largest banks are offering a few suggestions. Wells Fargo and some other large banks would like private companies, perhaps even themselves, to become the new housing finance giants helping to bundle individual mortgages into securities that would be stamped with a government guarantee.</p><p></p><p> The banks have presented their ideas publicly through trade groups. Housing industry consultants and people familiar with recent meetings at the Treasury Department say these banks view the governments overhaul of the mortgage market as a potential profit opportunity. Treasury officials have met with executives from several institutions, including Wells Fargo, Morgan Stanley, Goldman Sachs and Credit Suisse, according to a public listing of the meetings.</p><p></p><p> The administrations report, to be released later this month, is expected to be sweeping and could address basic questions like whether a government guarantee is needed at all for middle-class homeowners. While other arms of the government are dedicated to making loans available to lower-income borrowers, Fannie and Freddie have helped lower rates for the bulk of homeowners. Some Republicans are trying to narrow this broad role, and on Thursday, several conservative researchers released a proposal on how to do so.</p><p></p><p> But banks, for their part, have told the administration that removing the guarantee would wipe out the widespread availability of the 30-year mortgage, fundamentally reshaping the American housing market. Though some other countries do not promote long mortgages, some analysts warn that such a change would be devastating to the market here. At firms like Goldman, analysts are predicting that a government guarantee on a broad swath of mortgage securities will survive in some form.[..]</p><p></p><p> Even if large banks are not allowed to give a government guarantee, they might have control over the private companies by investing in them or by placing representatives on their boards</p><p></p><p>Yes, I know, solving Fannie and Freddie is a Herculean task. Nobody wants to shake the housing market any more than it already has been. That is, of course, nobody except for potential homebuyers. And yes, dissolving Fannie and Freddie will greatly increase the "official" US debt. It will also mean the end of the major Wall Street banks.</p><p></p><p>But if the only alternative is to give those banks, who would long be broke and live on only as zombies and even that only because of accounting tricks, the ability to hand out loans and invest in securities (and potentially other derivatives) backed by a 100% US government guarantee (how thick can you lay on moral hazard?), you will be directly responsible for destroying your grandchildren's America.</p><p></p><p>Yes, the demise of Wall Street, and of housing prices, will mean a tough time ahead for everyone. But at least youll still have such items as pride and honor and dignity and patriotism and an American Dream left. Giving in to the model of Wall Street as government backed lenders, investors and speculators, while the dangers of doing so are plain for everyone to see, just to a gain a little bit of time, would rob you of all of these items. Your grandchildren would spit on your graves. Is it worth it?</p><p></p><p>Read more: <a href="http://www.businessinsider.com/real-employment-rate-47-percent-2011-1#ixzz1CDyLS8xP" target="_blank">http://www.businessinsider.com/real-employment-rate-47-percent-2011-1#ixzz1CDyLS8xP</a></p></blockquote><p></p>
[QUOTE="Billybob, post: 1462776, member: 1294"] Banks Want Pieces of Fannie-Freddie Pie As the Obama administration prepares a report on the future of Fannie Mae and Freddie Mac, some of the nations largest banks are offering a few suggestions. Wells Fargo and some other large banks would like private companies, perhaps even themselves, to become the new housing finance giants helping to bundle individual mortgages into securities that would be stamped with a government guarantee. The banks have presented their ideas publicly through trade groups. Housing industry consultants and people familiar with recent meetings at the Treasury Department say these banks view the governments overhaul of the mortgage market as a potential profit opportunity. Treasury officials have met with executives from several institutions, including Wells Fargo, Morgan Stanley, Goldman Sachs and Credit Suisse, according to a public listing of the meetings. The administrations report, to be released later this month, is expected to be sweeping and could address basic questions like whether a government guarantee is needed at all for middle-class homeowners. While other arms of the government are dedicated to making loans available to lower-income borrowers, Fannie and Freddie have helped lower rates for the bulk of homeowners. Some Republicans are trying to narrow this broad role, and on Thursday, several conservative researchers released a proposal on how to do so. But banks, for their part, have told the administration that removing the guarantee would wipe out the widespread availability of the 30-year mortgage, fundamentally reshaping the American housing market. Though some other countries do not promote long mortgages, some analysts warn that such a change would be devastating to the market here. At firms like Goldman, analysts are predicting that a government guarantee on a broad swath of mortgage securities will survive in some form.[..] Even if large banks are not allowed to give a government guarantee, they might have control over the private companies by investing in them or by placing representatives on their boards Yes, I know, solving Fannie and Freddie is a Herculean task. Nobody wants to shake the housing market any more than it already has been. That is, of course, nobody except for potential homebuyers. And yes, dissolving Fannie and Freddie will greatly increase the "official" US debt. It will also mean the end of the major Wall Street banks. But if the only alternative is to give those banks, who would long be broke and live on only as zombies and even that only because of accounting tricks, the ability to hand out loans and invest in securities (and potentially other derivatives) backed by a 100% US government guarantee (how thick can you lay on moral hazard?), you will be directly responsible for destroying your grandchildren's America. Yes, the demise of Wall Street, and of housing prices, will mean a tough time ahead for everyone. But at least youll still have such items as pride and honor and dignity and patriotism and an American Dream left. Giving in to the model of Wall Street as government backed lenders, investors and speculators, while the dangers of doing so are plain for everyone to see, just to a gain a little bit of time, would rob you of all of these items. Your grandchildren would spit on your graves. Is it worth it? Read more: [url]http://www.businessinsider.com/real-employment-rate-47-percent-2011-1#ixzz1CDyLS8xP[/url] [/QUOTE]
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