Fed Study Finds Fannie, Freddie Don't Boost Home-Buying

DOW JONES NEWSWIRES ^ | December 22,2003 | Dawn Kopecki

[AdamSelene235]

Ping!

Upon being proclaimed useless by the Fed, Fannie and Fred rallied nearly 2%. I think Greenie broke the market. It makes no sense.

[JohnGalt]

Yet another gubmint boondoggle.

I am sure their War on Some Terror will go much better.

[bmwcyle]

The only thing the government does right is go home for the holiday.

[ikka]

Upon being proclaimed useless by the Fed, Fannie and Fred rallied nearly 2%.

It makes perfect sense. The report states that the subsidy is worth much more than previously thought, and that the effect on rates is minimal. Thus, since Fannie and Freddie are in effect massively subsidized at no cost to them, the stock is worth more.

Imagine if a study showed that IBM's physical buildings were worth 3 times what they are listed on the books... IBM's stock would go up.

[AdamSelene235]

Yet another gubmint boondoggle.

Franklin Delano II says its for the children. I'm sure he donates all his stock option profits to charity.

I am sure their War on Some Terror will go much better.

We've got the killing people/breaking things bit down pat.

[AdamSelene235]

It makes perfect sense. The report states that the subsidy is worth much more than previously thought, and that the effect on rates is minimal. Thus, since Fannie and Freddie are in effect massively subsidized at no cost to them, the stock is worth more.

Er, they are making a case to end the subsidy.

[Dems_R_Losers]

Fannie Mae lobbied furiously to prevent the release of this report. Its star is fading fast.

[meenie]

Freddie and Fannie are in direct competition to the Fed regarding the issuance of new debt. For this reason, I imagine Sir Alan resents them infringing on his turf. Between the three of them, they have done a beautiful job of destroying any semblance of fiscal or monetary integrity.

[imawit]

Fannie & Freddie are a major boon to Mtg Banks. Where else could you get someone to buy bad low profit loans and then charge them back to service them.

[Starwind]

I've been searching for a copy of this study, but can't find it posted anywhere (yet).

Anyone who finds it or knows where it is, please post a link?

[ikka]

Er, they are making a case to end the subsidy.

Chances of this happening are ... ?

[FirstPrinciple]

Upon being proclaimed useless by the Fed, Fannie and Fred rallied nearly 2%.

Makes perfect sense. The only way the stock will collapse after this report is if the market interpreted this as bad news for Fannie and Fred because the government will stop subsidizing then. The market knows full well that not a dime of subsidy will be reduced because of this, just like no government welfare program has ever been cut. Don't hold your breath for Bush to defund Fred and Fannie. He hasn't ever seen a welfare program he doesn't like. BTW, I know Wayne. He is a top class economist.

[AdamSelene235]

Chances of this happening are ... ?

Congress had a chance to pass feel-good reform last session but the Treasury and the Bush admin. called them on it. OFHEO has stipulated several criteria for radical reform of the GSEs. OFHEO's criteria has been met IMO.

I'd say odds are 50-50.

[ikka]

I'd say odds are 50-50.

I will wait and see. When you poke Fannie/Freddie you are stirring some powerful behind-the-scenes forces... I would expect that if they get reorg'ed, we will see the NY Times et al. claim that minorities will be hardest hit by the changes, etc.

[AdamSelene235]

The NYT ran an anti-GSE piece a while back based on an insider who leaked their proprietary trading programs. The WSJ has been on a GSE jihad for the last 1.5 years. Somethings up.

[AdamSelene235]

I've been searching for a copy of this study, but can't find it posted anywhere (yet). Anyone who finds it or knows where it is, please post a link?

Here you go

Finally took a vacation! Killed a dozen quail today but missed a boar who caught wind of me at a pathetic 70 meters....arrghh....

[Starwind]

Duh!

I don't how I missed it. Thanks.

missed a boar who caught wind of me at a pathetic 70 meters....

Always a problem with bikers. They never bathe.

[lainde]

Ping!

[AdamSelene235]

would expect that if they get reorg'ed, we will see the NY Times et al. claim that minorities will be hardest hit by the changes, etc.

Housing inflation hurts the poor the most.

Mortgage Giants Faulted on Not Passing on Gains - NY Times  (12/23/2003 4:38 AM)