The stupidity of not letting home prices fall

[jon_perez]

Weren't Fannie Mae and Freddie Mac created in order to "promote home ownership" among Americans? Wasn't this admirably lofty goal pushed in order to get people to swallow the special privileges conferred on these quasi-private companies?

Well, duh, won't falling home prices exactly promote home ownership by making houses more affordable??!? And now they're trying to artificially support home prices?!??! What gives???

Don't the actions of the government win some kind of award (or multiple awards at that) for colossal stupidity??

 

[Original_Intent]

They were only created to promote home ownership if you believe their press releases.

I started reading the Blue Book again this weekend, I see conspiracy everywhere and am feeling a bit jittery

 

[HOLLYWOOD]

Weren't Fannie Mae and Freddie Mac created in order to "promote home ownership" among Americans? Wasn't this admirably lofty goal pushed in order to get people to swallow the special privileges conferred on these quasi-private companies?

Well, duh, won't falling home prices exactly promote home ownership by making houses more affordable??!? And now they're trying to artificially support home prices?!??! What gives???

Don't the actions of the government win some kind of award (or multiple awards at that) for colossal stupidity??

This is where the conspiring collusion becomes reality for this sector:

Fannie/Freddie: Cheap mortgages, subprime crap, Subsidized unqualified buyers

Banks: More loans, More process fees, more interest, more Profits

Realtors Higher prices on easy money = higher Commissions and Profits

State: More Revenue on more and higher home sales, inflated property vaule - More Tax revenue off of Property Taxes!

Federal: US Treasury and FED RESERVE induced artificially low rates, easy credit, resulting in Tax revenue on increased inflation on Homes/Property values allowing increased sales revenue, Estate Death Tax revenue, additional home owner/2nd loans and induce addition property purchases. More money for the US Treasury!

Insurance Co's: Higher valuations increased inflation, higher insurance premiums!

There's more... but all are guilty... just follow the money trails to the politicians that voted to enable all of this.

The loser on the UPS and DOWNS = the American people/average taxpayers

THIS IS... a well contrived scheme/scam of conspiring entities... but government will just sit back and say it was someone else's fault, when they enabled all of this... all for TAX and Revenue!

Greed at all levels and entities.

 

[jon_perez]

Which blue book is that?

We shouldn't ascribe to conspiracy what stupidity can easily explain.

If people remind their government of how braindead their plans to support home prices are because it actually defeats their whole initial idea of promoting home ownership, we would hope they'd be sane enough to learn to back down when faced with their own absurdities.

Examples of government stupidity abound and it doesn't really take a conspiracy to explain them. Simple politics and the need to pander to get votes (meaning the populace is as much "in" the conspiracy [of stupidity]) are enough reasons.

For example, in a Jim Rogers interview in the book Market Wizards (circa 1990s), he talks about the stupidity of sugar subsidies. "The US spends $5bn a year to keep the price of sugar such that Americans can pay 22 cents a pound wholesale when it is selling for 8 cents a pound in the world market. We'd be better off if the government gave every sugar grower a condominium, a Porsche and USD100,000 for the rest of their lives to stop planting sugar [for a living]. It would save billions of dollars a year and the rest of us would all be paying less for sugar!!


Another funny yet tragic example he gave were US troops in Europe. They have been there for over forty years, doing nothing but "sitting around, drinking beer, getting fat", and costing taxpayers US150bn a year. If you took those troops home, the Europeans would have to defend themselves and they would buy their weapons from the US anyway! (Heck if you gave each of these troops USD100K a year for the rest of their lives as well, the taxpayers would probably *still* stand to save a bundle...)

 

[TheBMT]

It would be nice to have the prices go down to realistic levels so I could buy a house.

 

[Brian4Liberty]

Blame it on greed. If there was no lending to buy houses, what would the prices be?

 

[Isaac Bickerstaff]

Under the Fed system, money can only exist if there is debt. The rich bastards who realize this need to "store" the debt on all the little people. If the value of homes become significantly less than what people still owe, there is a good chance that the little people will allow their mortgages to default. This would ripple through the banking industry and suck precious money out of the spindly white fingers of the bankers.