The unspoken, bottom line: The federal government has already nationalized the housing industry. We’re not just talking about Uncle Sam providing a few subsidies, or even taking over a few of the big players, as they have in the auto industry. This is a complete takeover. Every new mortgage today is a government mortgage.
Over the last two years, government mortgage and mortgage-backed holdings have grown on net by nearly $1 trillion. Private investors and institutions have shed more than $1.5 trillion — through foreclosure losses, pay downs, and by selling to government.
The effective result is a government-run housing market. Barofsky reports that right now, the government is responsible for about 100 percent of all new mortgage activity. You read that correctly. To put it in his own words:
“According to Federal Reserve net borrowings data, the federal government and the organizations it backs now guarantee or issue almost all net new borrowings for mortgages and MBS.”
Al Lorenz says:
This is all far from over. It would be an insult to Charles Ponzi to call this a government ponzi scheme.
February 12, 2010 — 2:33 pm
Robert Kerr says:
RE: “The federal government has already nationalized the housing industry.”
“Nationalized?!”
Sigh. This sort of overly-dramatic rhetoric 1) makes the author look silly and 2) detracts from the important message within the article.
Yes, there’s definitely some furious arm-flapping happening … in the media: “READ ME! READ ME! I’M MORE OUTRAGEOUS THAN THE REST!!”
February 13, 2010 — 9:22 pm