Congress Sends Housing Legislation To The President
Saturday, 26. July 2008, 22:59:46
In a rare Saturday session, the Senate voted 72-13 to send the legislation that the House passed on Wednesday to the President; it's a combination of the Dodd Frank housing legislation, and legislation granting authority to Federal Reserve Chairman Ben Bernanke to oversee lending to and capitalization of the two US mortgage guarantors Freddie Mac, FRE and Fannie Mae, FNM.
The Dodd Frank housing legislation is a defacto nationalization of the US housing industry where investment risk and real estate property ownership is transferred from the banks to the the tax paying public.
The legislation privatizes gains and socializes losses
The legislation is privitization of gains unto the banks, KBE, and investment bankers, KCE, and socialization of the losses and risk unto the taxpayers of the US and eventually unto the citizens of the world.
The US housing debt is irredeemable
The Liquidation Thesis holds that the the mortgage debt holdings of Fannie Mae and Freddie Mac is going to be liquidated, that is done away with in one way or another; the two GSEs should have been allowed to fail; they are going to fail soon, yes very soon, regardless of the current "so called rescue"; which is really a rescue of the Bank of America, BAC, as research indictes that the legislaion originated from it.
The legislation documents the work of a Plutocracy
The United States does not have representatives in Congress; rather it has rulers.
The legislation that was passed today is an increase of state coporate rule; and is an example of a framework agreement between leaders which provides awesomely greater authority to the Federal Reserve chairman.
Gradually, step by step, we are moving into the vision of New York Federal Reserve president Timothy Geithner who has called for unified regulation of global banking.
The legislation is the tipping event that has sent interest rates on US Government debt higher
Roger Nusbaum relates that the investment market place has effectively terminated the US Treasuries AAA Rating which is confirmed by the interest rate on the US Treasuries rising in breakout on the news of the Fed Chief providing liquidity to the GSEs, as seen in Yahoo Finance ^TYX data beginning July 16, 2008.
The same can be seen in the rise of the interest rate on the 30 year US Treasury Bond, $TYX, in ongoing Yahoo Finance chart, where the interest rate first rose on March 18, 2008 with the announcement of provision of TAF, TSLF, and PDCF facilities.
The $300 Billion of assistance will quickly be marketplace liquidated
Providing $300 Billion of assistance is not a rescue, it is providing capital that will be market place liquidated. This is money that is non existant; it is coming from debt, that is US Treasury Debt that can never be repaid and never will be repaid.
Creating debt that will vaporized by the ongoing Elliott Wave 3 Down in real estate wealth is total insanity.
Wealth and liquidity are now turning down
Bernankeism is a continuation of the flow of liquidity that came by the Purveryor of Credit Liquidy, Allan Greenspan.
However the Federal Reserve spigot of liquidity and well spring of liquidity was turned and ran dry on May 19, 2008, when the Fed assisted rescue of Bear Stearns by JP Morgan rally ended.
The other twin of spigot and well spring liquidity, the yen carry trade, was also turned off and also ran dry on July 25, 2008, when the world passed through Peak Currencies, as Jamie McGee of Bloomberg reported that Canada's dollar, FXC, fell on the decline in the price of oil and falling sales data, and as Robert Gottliebsen of the Business Speculator reported the National Australia Bank decided to write off 90 per cent of its US conduit which caused the Australian Dollar, FXA, to fall.
Jesse in report Bank Credit and Money Supply Growth shows a downturn in the "growth" of Bank Credit, MZM, M2 and M3. This documents that indeed the twin spigots used to generate fiat wealth in stocks and bonds have indeed been turned off.
The "so called" housing rescue legislation has lit the fuse of a systemic risk event
And now through the law of unintended consequence, a systemic risk event is about to break loose caused by the passage of this legislation: this will awesomely reduce US stock market, VTI, world stock market, VEU, US Treasury bond, TLT, Aggregate Bond, AGG, world currency, DBV, and zero coupon mutual bond, BTTRX, values.
The investment application is that wealth can only be grown and preserved by investing in gold.
Numerous authors such as Peter Degraaf relate that negative real interest rates are one of the main factors driving the investment demand for gold higher and higher.
The "so called housing rescue legislation" is going to drive bond marketplace interest rates even higher.
The ongoing MSN chart of gold, GLD, relative to US Stocks, VTI, shows that as unwinding of the yen carry trade, (as seen in EUR/JPY, FXE:FXY, turning lower), in June 2008, with the announcement of the Bank of Japan May meeting that inflation is an investment risk factor, has increased risk aversion to stock investing, resulting in disinvestment in stocks, and investment in gold.
The Housing Legislation is a great coverup of a number of things, and the rating agencies are complicit with the media in a suppression and misrepresentation of the truth
The mortgage backed securities of Fannie Mae, FNM, and Freddie Mac, are one of the roots of the current housing crisis.
The executives at Fannie Mae, Freddie Mac, and the OFHEO, as well as in the Bush Administration Housing Department, should be called to account for their participation in the current housing crisis; but unfortunately, they are being rewarded with $300 Billion to financialize.
The rating agencies should have long ago downgraded not only Freddie Mac, and Fannie Mae, but the banks, KBE, and investment bankers, KCE, for the inflated value of level two assets, and level three assets, and assets kept off balance sheets in qualifying special purpose entities, SPEs, and SIVs. I expect a down grade to be forth coming within days; of course, much, much, much too late; the down grade ls going to be a factor in congealing and coalescing a systemic risk event -- a financial marketplace breakdown.
An example of misreprestention of the truth is found in the provided by the Assoicated Press which relates: that Congress approved mortgage relief for 400,000 struggling homeowners Saturday as part of an election-year housing plan that also aims to calm jittery financial markets and bolster the sagging economy. President Bush said he would sign it promptly, despite reservations.
The measure, regarded as the most significant housing legislation in decades, lets homeowners who cannot afford their payments refinance into more affordable government-backed loans rather than losing their homes.
It offers a temporary financial lifeline to troubled mortgage companies Fannie Mae and Freddie Mac — pillars of the home loan market whose losses have sparked investor fears — and tightens controls over the two government-sponsored businesses.
Democrats won cherished priorities ... a permanent affordable housing fund financed by Fannie Mae and Freddie Mac, and the neighborhood grants.
"This is far more than sending a bill to the president's desk for his signature. It's sending a message to the American people that the Congress of the United States — despite an alternative reputation — can actually get things done, and can work together to achieve a good result," said Sen. Christopher J. Dodd, chairman of the Senate Banking, Housing and Urban Affairs Committee.
The plan also is designed to relieve a broader credit crunch that has taken hold because of rising defaults and falling home values. To free up safer and more affordable mortgage credit, the bill permanently would increase to $625,000 the size of home loans that Fannie Mae and Freddie Mac can buy and the FHA can insure. They also could buy and back mortgages 15 percent higher than the median home price in certain areas.
The measure tries to prevent blight in areas hardest hit by the housing crisis, where waves of foreclosures have left properties sitting abandoned, dragging down property values and ruining neighborhoods. It sends $3.9 billion to such neighborhoods to buy and fix up foreclosed properties.
The Treasury Department gains unlimited power, until the end of 2009, to lend money to Fannie Mae and Freddie Mac or buy their stock should they need it. The Federal Reserve takes on a new "consultative" role overseeing the companies.
The measure includes $15 billion in tax cuts, including a significant expansion of the low-income housing tax credit, and a credit of up to $7,500 for first-time home buyers for houses purchased between April 9, 2008, and July 1, 2009.
Related
Information on the bill, H.R. 3221, can be found at http://thomas.loc.gov/
Barry Grey and Andre Damon of WSWS.org relate that the congressional budget office estimates the homeowner assistance portion of the bill will cost the Federal Government only some $2.5 billion over the course of the next five to seven years. This figure stands in stark contrast to the essentially unlimited government funds being made available to the financial companies, under the sole discretion of the treasury secretary.
The federal government chartered Fannie Mae and Freddie Mac in 1938 and 1970, respectively, to expand financing options for homeowners. In recent years the firms have been partially supplanted as the secondary mortgage market expanded. But Fannie and Freddie retained a competitive advantage because markets assumed that their debt was guaranteed by the government, allowing them to borrow at lower rates. Despite a string of management scandals, the firms retained their privileged position through their formidable lobbying efforts.
Before Paulson’s call for government assistance two years ago, the US government had no expressed commitment to defending Fannie Mae and Freddie Mac. Testifying before Congress in October 2003, former Treasury Secretary John Snow said, “We don’t believe there is any government guarantee” for the two lenders, adding, “It’s not in our view a reality, but it’s a perception of an implied guarantee.” Regardless of this stated position, both parties and all sections of the government have now sprung to the companies’ rescue.
The actions of President Bush underscore the plutocratic reality behind the façade of American democracy. Bush had for months threatened to veto the housing bill, citing a provision allocating $4 billion to states and localities to buy and refurbish foreclosed homes. He reiterated his veto threat earlier last week. But within days, after a discussion with Treasury Secretary Henry Paulson—the former CEO of Goldman Sachs whose net worth is estimated in the hundreds of millions of dollars—Bush reversed himself and said he would sign the combined housing and Fannie Mae/Freddie Mac bailout legislation.
The Dodd Frank housing legislation is a defacto nationalization of the US housing industry where investment risk and real estate property ownership is transferred from the banks to the the tax paying public.
The legislation privatizes gains and socializes losses
The legislation is privitization of gains unto the banks, KBE, and investment bankers, KCE, and socialization of the losses and risk unto the taxpayers of the US and eventually unto the citizens of the world.
The US housing debt is irredeemable
The Liquidation Thesis holds that the the mortgage debt holdings of Fannie Mae and Freddie Mac is going to be liquidated, that is done away with in one way or another; the two GSEs should have been allowed to fail; they are going to fail soon, yes very soon, regardless of the current "so called rescue"; which is really a rescue of the Bank of America, BAC, as research indictes that the legislaion originated from it.
The legislation documents the work of a Plutocracy
The United States does not have representatives in Congress; rather it has rulers.
The legislation that was passed today is an increase of state coporate rule; and is an example of a framework agreement between leaders which provides awesomely greater authority to the Federal Reserve chairman.
Gradually, step by step, we are moving into the vision of New York Federal Reserve president Timothy Geithner who has called for unified regulation of global banking.
The legislation is the tipping event that has sent interest rates on US Government debt higher
Roger Nusbaum relates that the investment market place has effectively terminated the US Treasuries AAA Rating which is confirmed by the interest rate on the US Treasuries rising in breakout on the news of the Fed Chief providing liquidity to the GSEs, as seen in Yahoo Finance ^TYX data beginning July 16, 2008.
The same can be seen in the rise of the interest rate on the 30 year US Treasury Bond, $TYX, in ongoing Yahoo Finance chart, where the interest rate first rose on March 18, 2008 with the announcement of provision of TAF, TSLF, and PDCF facilities.
The $300 Billion of assistance will quickly be marketplace liquidated
Providing $300 Billion of assistance is not a rescue, it is providing capital that will be market place liquidated. This is money that is non existant; it is coming from debt, that is US Treasury Debt that can never be repaid and never will be repaid.
Creating debt that will vaporized by the ongoing Elliott Wave 3 Down in real estate wealth is total insanity.
Wealth and liquidity are now turning down
Bernankeism is a continuation of the flow of liquidity that came by the Purveryor of Credit Liquidy, Allan Greenspan.
However the Federal Reserve spigot of liquidity and well spring of liquidity was turned and ran dry on May 19, 2008, when the Fed assisted rescue of Bear Stearns by JP Morgan rally ended.
The other twin of spigot and well spring liquidity, the yen carry trade, was also turned off and also ran dry on July 25, 2008, when the world passed through Peak Currencies, as Jamie McGee of Bloomberg reported that Canada's dollar, FXC, fell on the decline in the price of oil and falling sales data, and as Robert Gottliebsen of the Business Speculator reported the National Australia Bank decided to write off 90 per cent of its US conduit which caused the Australian Dollar, FXA, to fall.
Jesse in report Bank Credit and Money Supply Growth shows a downturn in the "growth" of Bank Credit, MZM, M2 and M3. This documents that indeed the twin spigots used to generate fiat wealth in stocks and bonds have indeed been turned off.
The "so called" housing rescue legislation has lit the fuse of a systemic risk event
And now through the law of unintended consequence, a systemic risk event is about to break loose caused by the passage of this legislation: this will awesomely reduce US stock market, VTI, world stock market, VEU, US Treasury bond, TLT, Aggregate Bond, AGG, world currency, DBV, and zero coupon mutual bond, BTTRX, values.
The investment application is that wealth can only be grown and preserved by investing in gold.
Numerous authors such as Peter Degraaf relate that negative real interest rates are one of the main factors driving the investment demand for gold higher and higher.
The "so called housing rescue legislation" is going to drive bond marketplace interest rates even higher.
The ongoing MSN chart of gold, GLD, relative to US Stocks, VTI, shows that as unwinding of the yen carry trade, (as seen in EUR/JPY, FXE:FXY, turning lower), in June 2008, with the announcement of the Bank of Japan May meeting that inflation is an investment risk factor, has increased risk aversion to stock investing, resulting in disinvestment in stocks, and investment in gold.
The Housing Legislation is a great coverup of a number of things, and the rating agencies are complicit with the media in a suppression and misrepresentation of the truth
The mortgage backed securities of Fannie Mae, FNM, and Freddie Mac, are one of the roots of the current housing crisis.
The executives at Fannie Mae, Freddie Mac, and the OFHEO, as well as in the Bush Administration Housing Department, should be called to account for their participation in the current housing crisis; but unfortunately, they are being rewarded with $300 Billion to financialize.
The rating agencies should have long ago downgraded not only Freddie Mac, and Fannie Mae, but the banks, KBE, and investment bankers, KCE, for the inflated value of level two assets, and level three assets, and assets kept off balance sheets in qualifying special purpose entities, SPEs, and SIVs. I expect a down grade to be forth coming within days; of course, much, much, much too late; the down grade ls going to be a factor in congealing and coalescing a systemic risk event -- a financial marketplace breakdown.
An example of misreprestention of the truth is found in the provided by the Assoicated Press which relates: that Congress approved mortgage relief for 400,000 struggling homeowners Saturday as part of an election-year housing plan that also aims to calm jittery financial markets and bolster the sagging economy. President Bush said he would sign it promptly, despite reservations.
The measure, regarded as the most significant housing legislation in decades, lets homeowners who cannot afford their payments refinance into more affordable government-backed loans rather than losing their homes.
It offers a temporary financial lifeline to troubled mortgage companies Fannie Mae and Freddie Mac — pillars of the home loan market whose losses have sparked investor fears — and tightens controls over the two government-sponsored businesses.
Democrats won cherished priorities ... a permanent affordable housing fund financed by Fannie Mae and Freddie Mac, and the neighborhood grants.
"This is far more than sending a bill to the president's desk for his signature. It's sending a message to the American people that the Congress of the United States — despite an alternative reputation — can actually get things done, and can work together to achieve a good result," said Sen. Christopher J. Dodd, chairman of the Senate Banking, Housing and Urban Affairs Committee.
The plan also is designed to relieve a broader credit crunch that has taken hold because of rising defaults and falling home values. To free up safer and more affordable mortgage credit, the bill permanently would increase to $625,000 the size of home loans that Fannie Mae and Freddie Mac can buy and the FHA can insure. They also could buy and back mortgages 15 percent higher than the median home price in certain areas.
The measure tries to prevent blight in areas hardest hit by the housing crisis, where waves of foreclosures have left properties sitting abandoned, dragging down property values and ruining neighborhoods. It sends $3.9 billion to such neighborhoods to buy and fix up foreclosed properties.
The Treasury Department gains unlimited power, until the end of 2009, to lend money to Fannie Mae and Freddie Mac or buy their stock should they need it. The Federal Reserve takes on a new "consultative" role overseeing the companies.
The measure includes $15 billion in tax cuts, including a significant expansion of the low-income housing tax credit, and a credit of up to $7,500 for first-time home buyers for houses purchased between April 9, 2008, and July 1, 2009.
Related
Information on the bill, H.R. 3221, can be found at http://thomas.loc.gov/
Barry Grey and Andre Damon of WSWS.org relate that the congressional budget office estimates the homeowner assistance portion of the bill will cost the Federal Government only some $2.5 billion over the course of the next five to seven years. This figure stands in stark contrast to the essentially unlimited government funds being made available to the financial companies, under the sole discretion of the treasury secretary.
The federal government chartered Fannie Mae and Freddie Mac in 1938 and 1970, respectively, to expand financing options for homeowners. In recent years the firms have been partially supplanted as the secondary mortgage market expanded. But Fannie and Freddie retained a competitive advantage because markets assumed that their debt was guaranteed by the government, allowing them to borrow at lower rates. Despite a string of management scandals, the firms retained their privileged position through their formidable lobbying efforts.
Before Paulson’s call for government assistance two years ago, the US government had no expressed commitment to defending Fannie Mae and Freddie Mac. Testifying before Congress in October 2003, former Treasury Secretary John Snow said, “We don’t believe there is any government guarantee” for the two lenders, adding, “It’s not in our view a reality, but it’s a perception of an implied guarantee.” Regardless of this stated position, both parties and all sections of the government have now sprung to the companies’ rescue.
The actions of President Bush underscore the plutocratic reality behind the façade of American democracy. Bush had for months threatened to veto the housing bill, citing a provision allocating $4 billion to states and localities to buy and refurbish foreclosed homes. He reiterated his veto threat earlier last week. But within days, after a discussion with Treasury Secretary Henry Paulson—the former CEO of Goldman Sachs whose net worth is estimated in the hundreds of millions of dollars—Bush reversed himself and said he would sign the combined housing and Fannie Mae/Freddie Mac bailout legislation.
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