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It Turns Out Lenders Aren’t Your Friends

A weekend topic starting with Housing Wire. “This week, FHFA Director Mark Calabria and the GSEs have rolled out an across-the-board 50 bp delivery fee on all refinances. Since the onset of COVID-19, and despite heroic efforts by the Fed and Congress with the most extraordinary intervention, the FHFA has simply shown the proverbial middle finger to the housing finance system, to consumers, and especially to nonbank lenders who have been critical to credit availability in creating home ownership. The profits posted by both GSEs in their recent earnings are only because the of the quantitative easing from the Federal Reserve. Powell is the hero here.”

From National Mortgage News. “The ill-considered action by the FHFA shows just how deep is the potential capital deficit to support losses lurking inside Fannie Mae and Freddie Mac. Perhaps more ominously, the FHFA action is directly in conflict with the policy of the FOMC, which is deliberately using low interest rates and high volumes of loan refinancing in all sectors to reflate the crippled U.S. economy. ‘The FHFA could have at least made the change effective Oct. 1,’ one angry issuer told NMN. ‘This change will cost me millions of dollars on loans in pipeline that did not price in this loan-level pricing adjustment.'”

From CNBC. “There are currently just under 4 million borrowers in government and private sector mortgage forbearance programs. These allow them to delay their monthly payments for up to a year. ‘Rates are higher for refinances,’ noted Matthew Graham, COO of Mortgage News Daily. ‘FHFA sees that and concludes lenders have money to give on refis. It’s a tax based on jealousy, greed, and probably more than a little bit of disdain.'”

From a press release. “‘These FHFA-directed price adjustments do more than work against the hopeful economic rebound and the original agency charters, they undermine trust and spur uncertainty at a crucial time. Who knows where the next no-warning directive will strike? Non-owner-occupied loans? High loan-to-value?’ commented Phil Rasori, COO of Mortgage Capital Trading, Inc., a leading mortgage hedge advisory firm. ‘The only way lenders can protect themselves from these risks is to increase margins across the board, according to our analysis on the order of seventy-five to one hundred basis points in total.'”

An email I received from Edward J. Pinto, Director, AEI Housing Center. “The Housing Lobby has described the GSEs’ imposition of a new 1/2 point market adjustment fee to offset risk on refinance loans as: ‘outrageous,’ ‘a cash grab,’ and ‘based on jealousy, greed, and disdain.’ Nothing could be further from reality.”

“First, a few facts based on our Nowcast rate lock data from Optimal Blue: The GSEs’ share of the entire cash out refinance market is now at 90%, up from about 75% at the beginning of 2020. The GSEs’ share of the entire rate and term refinance market is now at 80%, up from about 63% at the beginning of 2020. Recently the combined volume of cash out and rate and term refinance rate locks has been more than double the level a year earlier.”

“To put the new 1/2 point upfront fee in perspective, mortgage rates on refinance loans have dropped nearly 100 basis points since early January 2020. The new 1/2 point fee is equal to about 13 basis points in rate, a minor impact compared to the massive drop in rates just since early January.”

“The FHA, VA, and private sector refinance shares are down because the agencies and lenders have appropriately tightened credit standards. While the GSE’ standards have also tightened, it has not been enough to slow their massive share and volume increases. Mortgage lending history teaches us that lending into a vacuum is dangerous and nothing indicates that more than a massive increase in share compared to ones competitors.”

“Finally, it is worth noting that a 30 year fixed rate, fully documented 65% loan-to-value cash-out refinance loan has default proclivity under stress that is the same as a 91-95% loan-to-value purchase loans with the same metrics. And the GSEs’ currently guarantee cash out loans up to 80% loan-to-value.”

“There are many reasons refinance loans are so risky, but first and foremost is that, unlike purchase transactions, there is no arm’s length purchase price to benchmark to. Thus it is all too easy to ask: ‘what do you need the value to be?'”

“The new 1/2 point market adjustment fee is not only appropriate, but it would have been a dereliction of regulatory oversight not to have taken action.”

From Reuters. “The head of Canada’s mortgage agency urged lenders to avoid offering home loans to riskier borrowers insured by its private rivals warning that excessive household borrowing will make the ‘pain of the deferred COVID-19 economic adjustment worse.’ Canada Mortgage and Housing Corp (CMHC) has lost mortgage insurance market share to private insurers after the government-backed agency tightened underwriting standards from July 1 as it forecast home price declines of as much as 18% over the next 12 months.”

“‘While we would prefer our competitors followed our lead for the good of our economy, they nevertheless remain free to offer insurance for those whom we would not,’ CMHC Chief Executive Evan Siddall said in the letter to lenders dated Aug. 10 and made public on Wednesday. ‘We don’t think our national mortgage insurance regime should be used to help people buy homes with negative equity.'”

The Globe and Mail. “Siddall’s letter chastises a long list of prominent mortgage lenders for helping heavily indebted borrowers buy homes, which he argues could harm economic growth. The pointed arguments and blunt tone of the letter, which asks mortgage lenders to ‘put our country’s long-term outlook ahead of short-term profitability’ and cites a ‘dark economic underbelly to this business,’ arrived without warning.”

“Far from having its intended effect, it left some senior bankers puzzled and others bristling, according to multiple sources familiar with the response within the financial sector. The new rules made it harder for some borrowers to get CMHC mortgage insurance, and disqualified as much as 30 per cent of the agency’s usual applicant pool, three sources said.”

“Before announcing stricter standards, CMHC held a conference call to brief mortgage lenders and federal Department of Finance officials. The plan was greeted as unorthodox, because it restricted access to mortgages at a moment when governments were pumping tens of billions of dollars into stimulus programs designed to keep credit flowing amid a global public-health crisis.”

“Dan Eisner, CEO of Calgary-based mortgage brokerage True North Mortgage, said both Genworth MI and Canada Guaranty ‘promptly’ contacted him after CMHC announced its new criteria and urged him to ‘send us a complete package of deals,’ and not only those that CMHC would no longer approve. He likened the rationale to other types of insurers that take on both riskier and more stable clients. ‘They don’t want all the drunk drivers for car insurance,’ he said.”

From Better Dwelling. “Canada’s national housing agency discreetly asked lenders to curb risky lending. Evan Siddall, the head of the Canada Mortgage and Housing Corporation (CMHC) sent a confidential memo to lenders this week, requesting they tighten lending. Instead of taking the advice, the industry leaked parts of the memo. The CMHC has responded by releasing the whole memo, including their rationale for the request. It turns out lenders aren’t your friends. Surprising, I know.”

“The letter requests banks curb risky loans, but not because they’re worried about banks. Siddall starts with a request to ‘… continue to support CMHC’s mortgage insurance activity in preserving a healthy mortgage sector in Canada.’ He follows with policy changes they’ve made, as well as the negative consequences Canadians would be exposed to if they didn’t.”

“For those that need a recap, the CMHC tightened the criteria for mortgage insurance. Starting in July, credit scores were limited to a hard minimum of 680. A hard minimum meaning there’s no room for flexibility, as previously accepted. The agency also won’t insure properties bought with borrowed down payments, and removed exceptions to debt service ratios. Generally, just promoting sound underwriting policy at a time where there’s increased risk. They can only suggest their competitors do the same.”

“In Siddall’s own words, ‘borrowing creates a very significant economic drag on our outlook.’ Since debt is future income used today, expansion of household debt will slow future economic activity. The memo warns the slow economic growth going into the future can be an issue. A particularly worrisome one, considering this implies a longer recovery from the current recession.”

“A significant number of homebuyers think housing risk disappeared, because defaults haven’t jumped. Defaults can’t rise right now, because lenders stopped collecting payments from almost a fifth of mortgages. The CMHC reminded lenders they ‘always anticipated a delayed impact: weakening in late 2020 and 2021 once government income supports unwind, bankruptcies increase and unemployment starts to bite.’ A sentiment also reflected by the Bank of Canada, which also expects defaults to rise next year. This isn’t new information to lenders. They know this, despite aggressively chasing first-time buyers.”

“Why Banks Don’t Give A Sh*t. A lot of lenders learned the wrong lessons from the US housing bubble, and one is on negative equity. After the US bubble popped, defaults soared because of investors, not first-time homebuyers. Investors with great credit scores strategically disposed of assets, to lower liabilities. Actual homes occupied by families, paid bills right through negative equity.”

“These negative equity homeowners were the biggest losers in the whole transaction. They would have to pay to sell, and a lot didn’t have the money to do that. First-time buyers aren’t known for sitting on huge capital reserves. Instead, when they get hit with negative equity, they attempt to ride it out. In the US, there’s millions of people still paying off their 2008 purchase, that haven’t accumulated any wealth. Lenders on the other hand, racked up all of those interest and principal payments.”

“The government has created so much moral hazard, there’s no reason for lenders to act responsibly. The government pumped the gas on mortgage growth, even as home sales reached new highs… during the greatest period of unemployment in Canadian history. If that’s not a sign the government is telling banks to proceed with risky lending, I don’t know what is.”

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  1. ‘FHFA has simply shown the proverbial middle finger to the housing finance system, to consumers, and especially to nonbank lenders who have been critical to credit availability in creating home ownership’

    Ahem…

    March 26, 2020

    “As America heads into a deep recession, the $11 trillion residential-mortgage market is in crisis. Investors who buy home loans packaged into bonds are dumping even those with federal backing because of panic that millions might not make their payments. Yet one risky sector had started to show cracks long before the coronavirus pandemic sparked the worst financial meltdown in 12 years: the federal government’s largest affordable-housing program, whose lenient terms are geared toward marginal borrowers.”

    “As real estate prices soared in recent years, working-class adults everywhere have increasingly relied on mortgages backed by the Federal Housing Administration — and U.S. taxpayers. Since 2007, the FHA’s portfolio has tripled in value to more than $1.2 trillion, almost 11% of the market. While private lenders make these loans, they are packaged into Ginnie Mae bonds, common in mutual funds and pensions.”

    “Before Covid-19 started roiling China, a November FHA report found that 27% of borrowers last year spent more than half their incomes on debt, a level it describes as ‘unprecedented.’ The share of FHA loans souring in their first six months has doubled over the last three years to almost 1%.”

    “Not long ago, Alex Castillo drove his shiny black Infiniti SUV through an office park north of the San Antonio airport, along a busy seven-mile stretch of highway that loan officers call ‘Mortgage Row’ because of its abundance of small independent mortgage companies that dominate FHA lending. Castillo, who has the words ‘The Dream Starts Here’ stitched into his jacket, works for Pennsylvania-based American Residential Lending. Oddly, amid the pandemic, his business is booming. His customers locked in FHA mortgages after interest rates plunged this month — adding to federally backed mortgage debt.”

    “‘If the government tells me you’re good enough to get a loan, I have to trust and believe in the government,’ Castillo said. ‘Then we just hope and pray that the client doesn’t get foreclosed on.’”

    “In downtown San Antonio, scores of investors stood on a parched lawn beside the city’s historic granite-and-red-sandstone courthouse. It was the first Tuesday of February, the day of the foreclosure auction. Matt Badders, a San Antonio lawyer who represents lenders, auctioned off two houses. The failed mortgages remind him of the run-up to the financial crisis 12 years ago, when lending to customers with spotty credit nearly brought down the world’s financial system. ‘We’re almost back to 2007, when mortgage originators are waking people up on park benches, saying sign here,’ Badders said.”

    “At the auction, the crowd bid on 338 homes, a third with FHA mortgages, according to Roddy’s Foreclosure Listing Service. One house had dual master bedrooms, a game room and granite kitchen counters. It sold for $202,000 — $52,000 less than the homeowner borrowed only two years ago. The taxpayer-backed FHA insurance fund will take a loss.”

    “Dave Stevens, FHA commissioner under President Barack Obama and former chief executive officer of the Mortgage Bankers Association, said a recession will expose hidden risks in home lending. ‘This should be an alarm bell to policymakers,’ Stevens said. ‘Sometimes you get blinded by a good economy and suddenly look at it and see a bubble of defaults coming.’”

    “The federal government has decided it doesn’t want to pursue — and has asked a judge to dismiss — a lawsuit against Utah-based Academy Mortgage Corp. The judge refused. The suit claims the company’s staff would repeatedly feed information into an automated federal underwriting system, manipulating it until the computer gave the green light. ‘Decline is a curse word,’ Plaintiff Gwen Thrower, a former underwriter, quoted a manager as saying. ‘We don’t use it.’”

    http://housingbubble.blog/?p=3070

  2. May 25, 2018

    “In his corner of American finance, where hard selling meets hard luck, Angelo Christian is a star. Each time Christian sells a home loan, the company he works for, American Financial Network Inc., takes as much as 5 percent. Many of Christian’s customers have no savings, poor credit, or low income—sometimes all three. Some are like Joseph Taylor, a corrections officer who saw Christian’s roadside billboard touting zero-down mortgages. Taylor had recently filed for bankruptcy because of his $25,000 in credit card debt. But he just bought his first home for $120,000 with a zero-down loan from Christian’s company. Monthly debt payments now eat up half his take-home pay. ‘If he can help me, he can help anyone,’ Taylor says. ‘My credit history was just horrible.’”

    “Christian can do this kind of deal because he is, in effect, making the loan on behalf of the federal government through its most important affordable housing program. It’s a sweet deal: He gets his nearly risk-free commission. Taylor puts no money down. If things go south, the government ultimately bears the risk. Many borrowers ‘are living paycheck to paycheck and, if they lose their jobs, they go into default immediately,’ says John Burns, a housing consultant.”

    “One reason more borrowers may be stretching: Real estate prices are soaring again.”

    http://thehousingbubbleblog.com/?p=10443

  3. ‘These FHFA-directed price adjustments do more than work against the hopeful economic rebound and the original agency charters, they undermine trust and spur uncertainty at a crucial time. Who knows where the next no-warning directive will strike? Non-owner-occupied loans? High loan-to-value?’ commented Phil Rasori, COO of Mortgage Capital Trading, Inc., a leading mortgage hedge advisory firm. ‘The only way lenders can protect themselves from these risks is to increase margins across the board, according to our analysis on the order of seventy-five to one hundred basis points in total.’

    Oh dear…

  4. ‘the FHFA has simply shown the proverbial middle finger to the housing finance system’

    That’s right Dean, and here’s a big F YOU from the HBB!

    ‘one angry issuer told NMN. ‘This change will cost me millions of dollars on loans in pipeline’

    Millions that otherwise you would have stuffed in your pocket – risk free. F YOU too angry issuer!

    1. They’ll still make money on those loans. If not, they would find “underwriting issues” to kill them off.

  5. ‘The ill-considered action by the FHFA shows just how deep is the potential capital deficit to support losses lurking inside Fannie Mae and Freddie Mac’

    You don’t say.

    ‘Perhaps more ominously, the FHFA action is directly in conflict with the policy of the FOMC, which is deliberately using low interest rates and high volumes of loan refinancing in all sectors to reflate the crippled U.S. economy’

    Yeah, the REIC says Powell is a hero. Kiss my grits REIC. Nothing shows what a cartel this is like this dog pile from the corrupt media. Your shameless FOMO campaign will blow up, but not in your faces. But the weak-minded people who buy into your horsesh$t.

    ‘Why Banks Don’t Give A Sh*t. A lot of lenders learned the wrong lessons from the US housing bubble, and one is on negative equity. After the US bubble popped, defaults soared because of investors, not first-time homebuyers. Investors with great credit scores strategically disposed of assets, to lower liabilities. Actual homes occupied by families, paid bills right through negative equity’

    ‘These negative equity homeowners were the biggest losers in the whole transaction. They would have to pay to sell, and a lot didn’t have the money to do that. First-time buyers aren’t known for sitting on huge capital reserves. Instead, when they get hit with negative equity, they attempt to ride it out. In the US, there’s millions of people still paying off their 2008 purchase, that haven’t accumulated any wealth. Lenders on the other hand, racked up all of those interest and principal payments’

    1. I have in mortgage lending for years/decades.
      To charge a premium on refis is not a totally unique idea as several times in the past lenders would lower rates on purchase loans as purchase loans are sometimes viewed as more valuable than refis. (if purchase loans are down 25 bps refis are essentially up 25 bps)
      Many years ago someone on HBB asked why Fannie/Freddie even bought cash out refinances since cash out refis would more likely lead to the person losing the house and the taxpayer having to eat the lose. And since Fannie/Freddie were in the business of getting people into houses why would they guarantee loans that did the exact opposite of their charter. I can’t remember who posted it but I think they were exactly correct.

  6. Since the onset of COVID-19, and despite heroic efforts by the Fed and Congress with the most extraordinary intervention, the FHFA has simply shown the proverbial middle finger to the housing finance system, to consumers, and especially to nonbank lenders who have been critical to credit availability in creating home ownership.

    “Heroic efforts of the Fed”? You’d have to read a North Korean press release on Kim Jung-Un’s latest feat to get a more fawning (and false) picture of the Fed’s incessant meddling in the housing markets.

    2. Where in the Fed’s mandate do they get the authority to use their printing press technology to manipulate housing prices? It’s always seemed to me that Bernochio went way outside of his lane when he used QE3 to reflate the Housing Bubble. And the complicit MSM was asleep at the wheel and completely missed the story.

      1. Not only that, there’s the issue that the housing market ends up right back in the precarious position that crashed before.

        Again, we have to consider the possibility that central bankers are mostly idiots.

        June 18, 2016

        “A bridge that relies on wealth effects, you better hope that you got enough growth to justify the asset price increase which created the wealth effect in the first place.” — Raghuram Rajan

        https://www.marketwatch.com/story/in-interview-indias-rajan-says-monetary-policy-has-run-its-course-2016-04-15?siteid=yhoof2&yptr=yahoo

        1. Sorry Ben, Gotta disagree with you on this one. Central Bankers “may” appear as idiots to more sentient students of economics. However, i subscribe to a much more sinister theory. They know exactly what they’re doing, and they own their domain. They are serving their true masters, and it ain’t you, me, the public, nor Congress.

      2. “It’s always seemed to me that Bernochio went way outside of his lane when he used QE3 to reflate the Housing Bubble.”

        Poor Treasury yields have led insurance companies, public pension funds, etc., to chase returns where they have too much exposure to the vagaries of the markets.

        1. When and if the Fed’s current plunge protection measures fail, there may be no place for risk asset HODLers to hide.

      3. Where in the Fed’s mandate do they get the authority to use their printing press technology to manipulate housing prices?

        “Asset price deflation”-protection. Remember Irving Fisher’s “Debt deflation” theory as being behind the Great Depression? https://www.theatlantic.com/business/archive/2012/03/what-gop-economists-dont-understand-about-milton-friedman/254405/

        Milton Friedman believed in it. Bernanke was Friedman’s acolyte: https://www.federalreserve.gov/BOARDDOCS/SPEECHES/2002/20021108/

        So, basically, anything to prevent deflation – lower prices – in general, of anything, especially assets is the goal. Particularly assets linked to debt.

        The intellectual cover for asset price protection is Fischer and Friedman. And now Bernanke, as QE “saved” the economy, at least the top tiers of it.

        The Fed is a tool created by the government and Wall Street. It is still exploring its limits. It will find it when – if – something breaks. The people in charge know the game very well. The question is whether their greed and appetites will get the better of them, and they lose control of the system.

        How many iterations of purchasing power redistribution can we get before something breaks? There was the Greenspan low interest rate regime, combined with other government policies (capital gains tax eliminated in 1997 on gains of up to 500K on home sales: https://www.ncbi.nlm.nih.gov/pmc/articles/PMC3002430/ ); A few years later, QE after the GFC. QE in September 2019 when the repo market started showing cracks; then with covid, the current round of QE.

        Haiti can’t print its way to prosperity obviously. Can the US? Can Russia? Or is that too simple a way to look at it? Can putting it behind levels of obfuscation (“buying government debt”, “buying corporate debt” all with printed money) successfully achieve the ends of policy makers and politicians and Wall Street executives (Yellen wasn’t piping the tune Dimon and Blankfein and Trump danced to – it was the other way around most likely).

        But back around to “The Fed is a tool created by the government and Wall Street” – the meta-analysis and the technical analysis. In the technical analysis, we look at social utility and stated goals and debt deflation. In the meta-analysis, we look at who benefits.

        Who dos high house prices benefit? Property taxes benefit state and local governments. 65 percent of people have houses or mortgages and they want stable or increasing house prices. It’s also a massive transfer of wealth to people who bought before the bubble.

        So, being the Fed is a tool of its makers, it is going to keep doing what benefits them until something forces it to stop. The system may be able to continue indefinitely. It seems top heavy but as long as the plebs have their bread and circuses, that allows the elites in this system to accrue ever more. Until the system becomes intolerable for the plebs.

        1. From the birthday/Fed link: ” A statistician studying data from the Great Depression would notice the basic fact that the money stock, output, and prices in the United States went down together in 1929 through 1933 and up together in subsequent years. But these correlations cannot answer the crucial questions: What is causing what?”

          Today, prices go up with the money stock (https://fred.stlouisfed.org/series/M1 and https://www.investopedia.com/terms/m/moneysupply.asp ). I mean, I don’t know the correlation coefficients between the two ( https://www.researchgate.net/post/Which_correlation_coefficient_is_better_to_use_Spearman_or_Pearson ) to show how closely they move together.

          Money stock has been going up (we don’t know about M3 anymore). MIT’s billion prices project showed a pretty consistent climb in prices. An interesting analysis would be rate of change of money stock (I guess M2 since it’s all we have) and rate of change of prices.

          Real rates are already negative ( https://www.google.com/search?q=real+rates+are+negative&tbm=nws ). The housing bubble was a massive transfer of wealth from younger to older, and to government and Wall Street. Now, the narrative is those wealthy oldsters sitting on piles of cash are going to give back through the further redistribution of purchasing power, back to debtors (who absent wage inflation, are still going to get poorer anyway due to inflation, but maybe that will be offset by the reduction in the value of their debt).

          The policy makers loudly wail that they cannot spark inflation but the BPP and money stock increases seem to tell a different tale.

  7. ‘The GSEs’ share of the entire cash out refinance market is now at 90%, up from about 75% at the beginning of 2020. The GSEs’ share of the entire rate and term refinance market is now at 80%, up from about 63% at the beginning of 2020. Recently the combined volume of cash out and rate and term refinance rate locks has been more than double the level a year earlier’

    ‘To put the new 1/2 point upfront fee in perspective, mortgage rates on refinance loans have dropped nearly 100 basis points since early January 2020. The new 1/2 point fee is equal to about 13 basis points in rate, a minor impact compared to the massive drop in rates just since early January’

    ‘The FHA, VA, and private sector refinance shares are down because the agencies and lenders have appropriately tightened credit standards. While the GSE’ standards have also tightened, it has not been enough to slow their massive share and volume increases. Mortgage lending history teaches us that lending into a vacuum is dangerous and nothing indicates that more than a massive increase in share compared to ones competitors’

    So we see that Fannie and Freddie have gone on a lending spree. Somebody tries to rein that in – just a little – and pandemonium. Oh, and this:

    ‘There are many reasons refinance loans are so risky, but first and foremost is that, unlike purchase transactions, there is no arm’s length purchase price to benchmark to. Thus it is all too easy to ask: ‘what do you need the value to be?’

    I look at title info on many defaulted loans. A common element is cash out refis. Why would the guberment guarantee that at all? Much less most of it. It is well established that cash out refis are seriously subprime, with no real basis in reality. Talk about greed. And they face no risk – early in a recession! They have the nerve to pretend to be sanctimonious? You people are dogs.

    1. “I look at title info on many defaulted loans. A common element is cash out refis. Why would the guberment guarantee that at all?”

      The cash taken out is immediately spent and this spending is what keeps our stupid consumer-based economy functioning.

      “Much less most of it. It is well established that cash out refis are seriously subprime, with no real basis in reality.”

      What is this reality thingy you speak of and why should I care about a whit about it?

      “Talk about greed.”

      My favorite subject.

      “And they face no risk – early in a recession!”

      😁

      “They have the nerve to pretend to be sanctimonious? You people are dogs.”

      Lazy, well fed and pampered ones at that.

      I like it, I love it, I want some more of it.

    2. ‘The GSEs’ share of the entire cash out refinance market is now at 90%, up from about 75% at the beginning of 2020. The GSEs’ share of the entire rate and term refinance market is now at 80%, up from about 63% at the beginning of 2020. Recently the combined volume of cash out and rate and term refinance rate locks has been more than double the level a year earlier’

      So we see that Fannie and Freddie have gone on a lending spree. Somebody tries to rein that in – just a little – and pandemonium. Oh, and this:

      Now it’s abundantly clear where the money for all those new houses and toys came from. Unfawkingbelievable.

    3. I look at title info on many defaulted loans. A common element is cash out refis. Why would the guberment guarantee that at all?

      How else can the middle class buy $50K+ SUVs?

      It is mind blowing to meet people who make half of what I do, yet they have cars I would never consider buying due to their prices. Ask them how much they save each month into their 401K and you will get blank stares.

      1. ClownWorld gonna clown.

        I’m buying new tires for my Subaru with 108K miles on it. Bought it with 78K on the odometer, gonna drive it into the ground, and most importantly, it’s too ugly and dirty to steal.

        1. “…and most importantly, it’s too ugly and dirty to steal.”

          Haha…I should upload a few images of my POS.

      2. “How else can the middle class buy $50K+ SUVs?”

        Do people who can’t afford those without a subprime auto loan really need them?

        1. Do people who can’t afford those without a subprime auto loan really need them?

          YOLO, right?

          Like the old saying goes: spending money you don’t have, to buy things you don’t need, to impress people you don’t know.

      3. You must have very good friends to ask them money questions like that. Then again, my coworkers are mostly pretty frugal. Hey, it’s the boring ol’ government.

        1. You don’t have to ask them how much they make. I know what they do for a living and what their professions pay. Not to mention that the median paycheck in my little burg is less than half of what I make, yet the roads are clogged with $50K vehicles.

          As for frugal .gov workers, I know someone who works at the USDA with the title of “Chief”. She drives a Tesla model S. Those can cost as much as $100K.

          1. I just like to look the part in my 5-series wagon.

            Total for purchase price and 8 years of operation+service is still no where near the original sticker price, per quicken. Figure to keep it another 5-7 years.

  8. Perhaps more ominously, the FHFA action is directly in conflict with the policy of the FOMC, which is deliberately using low interest rates and high volumes of loan refinancing in all sectors to reflate the crippled U.S. economy.

    The FOMC asshats should be on trial for the huge systemic risks they’ve created to the U.S. and global financial systems. It’s about time some responsible adults acted to curb this insane clown posse (apologies to the rock band) and their manic asset bubble inflation.

  9. ‘The FHFA could have at least made the change effective Oct. 1,’ one angry issuer told NMN. ‘This change will cost me millions of dollars on loans in pipeline that did not price in this loan-level pricing adjustment.’”

    This is why God gave you little feet, angry issuer. Stamp ’em! Stamp ’em real hard!

  10. Who knows where the next no-warning directive will strike? Non-owner-occupied loans? High loan-to-value?’ commented Phil Rasori, COO of Mortgage Capital Trading, Inc., a leading mortgage hedge advisory firm.

    These grifters remind me of a pack of Howler monkeys as they shriek over their free bananas being taken away. As a taxpayer, Phil, let me just convey to you and your ilk a heartfelt “F**k you” for the staggering risks and liabilities you piled onto taxpayers while making housing unaffordable for the prudent and responsible.

    1. I usually don’t post press releases, but this guy took the cake. Plus his suggestion that they have to tighten everything in case the FHFA gives them more meddlefangers is huge. Here’s another:

      ‘The CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.) today issued the following statement regarding the Federal Housing Finance Agency’s (FHFA) announcement to implement a new 0.5% fee on the loan amount for the majority of Fannie Mae and Freddie Mac refinance loans. “FHFA’s new fee on refinance loans is an attempt by the Enterprises to take advantage of the current economic crisis to raise additional revenue, which is consistent with its past actions to increase fees during this pandemic,” said C.A.R. President Jeanne Radsick. “Lenders have already begun to rework their rate sheets and are passing the higher costs onto borrowers.”

      “To restrict access to one’s equity today when families are struggling with the COVID-19 pandemic and its related economic impacts is extraordinarily poor timing and demonstrates that the FHFA’s singular focus of expediting Fannie Mae’s and Freddie Mac’s removal from conservatorship has taken priority over their role and mission of providing affordable mortgage capital to the housing market,” said Radsick.’

      https://www.prnewswire.com/news-releases/car-statement-on-new-fhfa-refinance-fee-that-increases-costs-for-borrowers-301112131.html

      This isn’t political. Everybody, especially Maxine, will wail and moan when these corrupt GSE’s go begging for a bail out. But let one tiny step be made to head that off and all hell breaks loose.

      Here’s the facts: credit is tightening almost everywhere. US, Canada, UK, Australia. Where were the tears when Wells Fargo and Chase said “no FHA/jumbo for you”? There was none. So private companies can tighten at will, with ZERO notice BTW, but let unca sugar pull back and we are strangling kittens!

        1. Neo.American $ociali$t $tephan Munchin’$ x9++ Trillion ‘💲💰💲💰💲💰💲💰💲💰💲💰💲💰💲💰💲💰 … i$ a $tarting point.

          Pu$h.over Powell, @ Thee.Federal.Re$erve, has Treasury’$ back$ide, “UNLIMITED+ly!”

  11. “The new 1/2 point market adjustment fee is not only appropriate, but it would have been a dereliction of regulatory oversight not to have taken action.”

    It’s mind-boggling that it’s taken 11 years for “regulatory oversight” to re-assert itself even minimally after being the parrot on the Fed’s and REIC’s shoulder in enabling dangerously unsustainable housing bubbles and “home ownership” by the manifestly non-creditworthy.

    1. October 4, 2019

      “The federal government has dramatically expanded its exposure to risky mortgages. In 2019, there is more government-backed housing debt than at any other point in U.S. history, according to the Urban Institute. A growing number of homeowners faces debt payments that amount to nearly half of their monthly income.”

      “‘There is a point here where, in an effort to create access to homeownership, you may actually be doing it in a manner that isn’t sustainable and it’s putting more people at risk,’ said David Stevens, a former commissioner of the Federal Housing Administration. ‘Competition, particularly in certain market conditions, can lead to a false narrative, like ‘housing will never go down’ or ‘you will never lose on mortgages.’”

      “The Federal Housing Finance Agency, at the time under Director Mel Watt, began working on plans to direct Fannie Mae to purchase loans with higher debt-to-income thresholds, Watt said. ‘It is intuitive – you think the higher somebody’s debt-to-income ratio, the more problems they are going to have,’ he said from his home in North Carolina, where he is now retired. ‘But that’s just not the best criteria to apply to be quite honest.’”

      http://housingbubble.blog/?p=2452

      There it is, right out in the open.

  12. “Siddall’s letter chastises a long list of prominent mortgage lenders for helping heavily indebted borrowers buy homes, which he argues could harm economic growth.

    “Harm economic growth”? Try bringing down the financial system. The results of this unchecked speculation with central bank funny money is going to be nothing less than cataclysmic when the financial house of cards built on fraud and fictitious valuations comes crashing down.

  15. Drop in price finds buyer for small Toronto condo

    231 Fort York Blvd., No. 2210, Toronto

    Asking price: $464,900 (May, 2020)

    Previous asking price: $475,000 (March, 2020)

    Selling price: $458,900

    Previous selling price: $407,000 (May, 2019); $144,300 (2007)

    ‘What they got: This 350-square-foot unit is completely open concept with nine-foot ceilings, full-height windows and a galley kitchen along one wall. The space comes with stacked laundry appliances. A monthly fee of $252 covers the cost of water and heating, as well as the upkeep of the pool, gym and rooftop terrace.’

    ‘The agent’s take: “This was one of the smallest ones there in the complex,” Mr. Dhawan said. “It was essentially like a small hotel room.”

    https://www.theglobeandmail.com/real-estate/toronto/article-drop-in-price-finds-buyer-for-small-toronto-urban-condo/

    Take a look at the photos. Motel 6 has bigger rooms. 458,900 Canadian pesos for that? The bubble up there is enormous.

    1. Most of the Turkish people have no money for gold, they need what little they have to eat and care for themselves. The same goes for most people in all countries – there’s no disposable income to buy gold, and if they did they’d have to sell it quickly to pay for life’s essentials.

  17. I won’t be happy until a shack is just a place to live that affordable.

    As far as I’m concerned these housing prices along with fake monopolies pricing are just looting. it’s all looting.

    1. The FED and .gov are feverishly working in concert to maintain high and increasing prices on all assets, because they have been sold off to investors as AAA securities, etc. If prices fall, then the people who matter have to take massive haircuts on their net worths. Can’t have that.

      1. If nominal asset prices rose by a large enough amount, wouldn’t that have the same effect as a cancellation of government debt?

    2. “I won’t be happy until a shack is just a place to live that affordable.”

      Yeah? Well even then you won’t be happy because part of the job of the PTB is to keep you unhappy and regarding this task they are exceeding all expectations.

      This is only part of their job, the other part is offering up solutions to your unhappiness situation, all of which entails the spending of large amounts of money – money that hopefully you do not have.

      And this, introduced as your latest Best Friend, is where I get to enter your life – hopefully forever.

    1. Snowden

      Shiny object amplified by Hollywood: focus on the NSA and ignore the CIA and Obama administration scandals. Side note: Ari Emanuel, Rahm’s brother, is a big Hollywood power player.

  19. A banker is a fellow who lends you his umbrella when the sun is shining, but wants it back the minute it begins to rain.

    — Mark Twain

    1. Instead of storing the umbrella himself the banker arranges for a schmuck to store it for him and charges the schmuck a hefty fee for doing so. When it rains the banker arranges for the schmuck to return the umbrella to him – opened, of course.

      The next feat the banker needs to work on is arranging for the schmuck to willingly hold the umbrella over the banker while the banker edures the downpour and charging the schmuck a fee for the privilege of doing so.

  21. Wha…no more free goodies
    for subprime borrowers and mortgage lenders
    from Aunt Fannie and Uncle Freddie? Unfair!!!!

      1. Critics of the move say it will cost homeowners thousands of dollars

        As if refi’s aren’t already saddled with thousands in closing costs and other junk fees. Will anothe $1-2K make any difference?

    2. Uh, oh … thee.🍊jesus & hi$ minion$, ain’t a “higher fee’$+” $upporter!!
      ($ad)

      Home > MBA Newslinks > MBA NewsLink Friday, Aug. 14, 2020:

      Trump Admini$tration Criticize$ New Fannie Mae, Freddie Mac Mortgage Fee$
      August 14, 2020

      Wall Street Journal, Aug. 13, 2020–Andrew Ackerman (subscription)

      The Trump admini$tration criticized a move by mortgage-finance companies Fannie Mae and Freddie Mac to charge a new fee on certain mortgages, saying it would harm consumers.

      “The White House has $erious concern$ with this action, and is reviewing it,” a senior White House official said in a written statement late Thursday. “It appears only to help Fannie and Freddie and not the American con$umer.”

      1. I’m beginning to look at this through the lens of Clarke’s Three Laws.

        I’ve got a good handle an application of the 3rd law:

        “Any sufficiently advanced velocity of money is indistinguishable from growth”

      2. I don’t guess anyone has explained to him how, like the Fed Chairman, the FHFA director acts independently, and doesn’t take orders from the President?

        The situation reminds me of my college Russian teacher’s American education. When I first studied with her, she was “just off the boat”, and ecstatic over her first taste of American freedom.

        A few months later, her attitude had changed completely: “There’s no difference between America and Russia. Except that in Russia, we only have one dictator, but America has a whole bunch of dictators!”

          1. Could the SCOTUS ruling on this case have implications for Fed independence?

            July 27, 2020
            Supreme Court Will Review Constitutionality of FHFA’s Single-Director Structure
            Weiner Brodsky Kider PC

            The Supreme Court recently granted certiorari to determine whether the single-director structure of the Federal Housing Finance Agency (FHFA) violates the Constitution’s separation-of-powers principles.

            The FHFA is headed by a single Director, appointed by the President with the Senate’s consent, who is removable only for cause. In its 2020 term, the Court will review the Fifth Circuit’s holding that the FHFA’s for-cause removal policy unconstitutionally insulates the FHFA Director from presidential oversight. This case comes on the heels of the Supreme Court’s recent holding that a nearly identical single-director structure at the Consumer Financial Protection Bureau (CFPB) violated the Constitution. The Fifth Circuit opinion at issue here was decided before the Supreme Court ruled in the CFPB case that the Constitution prohibits independent agencies with a single director who is not removable at the President’s discretion.

            If the Court applies the logic of its CFPB ruling to find the FHFA structure unconstitutional, it will also decide whether courts must “set aside a final agency action that FHFA took when it was unconstitutionally structured.”
            …

          2. Dumb question of the day: Where in the Constitution does it say that the Fed is politically independent and can do whatever it chooses to reallocate wealth across different American political constituencies?

          3. Periodic reminder, not necessarily for PB: the Federal Reserve is neither federal nor a reserve.

          4. Is the FHFA federal?

            Apparently having “Federal” in an organisation’s name doesn’t mean it is actually federal.

          6. The b!tch!ng over single-head agency status is just a smoke screen for foot stamping over the end of government gravy to the REIC.

            I wonder if the SCOTUS might be able to see through the smoke?

        2. “I don’t gue$$ anyone has explained to him how, like the Fed Chairman, the FHFA director act$ independently, and doe$n’t take order$ from the President?”

          dtRumpsis Choastic Tantrumeois: “Lower the Federal fund$ to Zero (0) Now!”

          Rate watch Prime rate, federal funds rate, COFI Fed Funds Rate
          Fed Fund$ Rate
          Prime rate, federal funds rate, COFIUPDATED: 08/11/2020

          THIS WEEK MONTH AGO YEAR AGO
          … 0.25 ………….. 0.25 …………….. 2.25t

          circum$tantial evidence$, like when ye find a trout.in.yer.milk.

        3. Trump managed to jawbone rates down a couple years ago didn’t he? or a year ago? Just when you could get 2% in mmkt funds.

          Only thing I don’t like about him.

        4. A few months later, her attitude had changed completely: “There’s no difference between America and Russia. Except that in Russia, we only have one dictator, but America has a whole bunch of dictators!”

          Over there, it’s man against man.

          Here, it’s the other way around.

  22. “While the GSE’ standards have also tightened, it has not been enough to slow their massive share and volume increases. Mortgage lending history teaches us that lending into a vacuum is dangerous and nothing indicates that more than a massive increase in share compared to ones competitors.”

    I love that quote, and will be interested to hear more from Mr. Pinto as the coronavirus housing meltdown plays out.

    I am pretty sure I attended a seminar he gave about 20 years ago when I was a graduate student. IIRC he used data analysis to show that after accounting for differential credit risk, there is no discernible racial discrimination in recent mortgage lending practice.

  23. The REIC is a hoping and praying for a Biden victory in November, in order to fully resume the Democrat’s subprime lending subsidization scheme.

    Jul 24, 2020, 8:56pm EDT
    The New FHFA Capital Rule Is A Great First Step Toward Financial Sanity For Fannie And Freddie
    Norbert Michel, Contributor
    Policy
    I follow the evolution and devolution of monetary and financial policy
    US-POLITICS-HOUSING-HEARING
    Mark Calabria (R), Director of the Federal Housing [+]
    POOL/AFP via Getty Images
    More From Forbes

    In March, the Federal Housing Finance Agency (FHFA) announced their intention to propose a new set of capital requirements for Fannie Mae and Freddie Mac. The federal register published the proposed new FHFA capital rule on June 30, and the very next day, 17 trade groups released a letter asking the agency to extend the comment period for two additional months.

    This extension would push the deadline to the end of October, just a few days before the 2020 presidential election.

    A cynical person might think that these groups – including the American Bankers Association, the Center for Responsible Lending, the Mortgage Bankers Association, the Housing Policy Council, and the National Association of Realtors – want to delay the new rule as long as possible while hoping for a favorable outcome in the election (one that ensures the higher capital requirements are never implemented). This is Washington, D.C., after all.

    Does anyone – much less these particular lobbyists – really need another 60 days to comment on the proposal? Everyone has known that the new rule was coming since at least November 2019. Another poorly kept secret was that the FHFA was going to base the new rule on the one they released in 2018. (The rule was proposed in 2018, but the capital framework itself was released in 2017).

    Sure enough, the new FHFA rule is based on the 2018 version, and it would require Fannie Mae and Freddie Mac (combined) to carry close to $200 billion in equity capital.

    This new proposal is a great start because the amount required is approximately equal to the companies’ cumulative losses during the 2008 financial crisis. Those losses would have been much worse, of course, had the federal government not stepped in and placed the companies in conservatorship. So the FHFA should increase the required amount.

    On the other hand, it is possible that those losses would not have been so bad – or so devastating in terms of costs to taxpayers – had the GSEs been held to higher capital requirements in the first place. Historically, though, the lack of any meaningful capital rules fueled the companies’ abnormal growth and, therefore, the outsize risk they posed to the housing finance system, borrowers, and taxpayers.
    …

    1. is ye inferring that Bolshevist$.Biden & thee.🍊.jesus are holding hand$ together on this $helter.$hack.loan.lender$ i$$ue?

      1. It’s an election year. What matters is the big picture, and FHFA has been rolling back the GSE monsters for well over a year.

        1. “It’s an election year.”

          Cui bono
          Cui bono? (/kwiː ˈboʊnoʊ/), in English “to whom i$ it a benefit?”, is a Latin phrase about identifying crime $uspect$.

          It expre$$es the view that crime$ are often committed to benefit their perpetrator$, e$pecially financially. Which party benefit$ may not be obviou$, and there may be a … $capegoat.

          & Forget thee.knot, “Thee.UNLIMITED++ ” Federal.Reserve PIMP$ are “Indemnified!”

        2. If the REIC lobbyists are smart, and I know they are, they will hedge their bets by courting the Republican and Democratic candidates to back their war on FHFA independence. If the strategy succeeds, the November election outcome won’t matter.

          1. Neo.American $ocialist Munchin’$ Ob$cured x$9++ Trillion$ 💲💰💲💰💲💰💲💰💲💰💲💰💲💰 + “UNLIMITED++” di$tribution$ have already rendered “outcome$” as: “Burdened” & “forward.looking”

            👾… munch, munch, munch … $till.$preading …

  24. Given how fast the stock market has gone up since the pandemic meltdown earlier this year, and the Fed’s implicit support through Unlimited QE2Infinity, is there any better investment strategy now than to buy and HODL stocks until making a profitable future sale?

    2. ‘Known in investing circles as the “Buffett Indicator,” the measure is simply the total market cap of all U.S. stocks relative to the country’s GDP. When it’s in the 70% to 80% range, it’s time to throw cash at the market. When it moves above 100%, it’s time to lean toward risk-off.

      Apply that yardstick worldwide, and, as you can see by this chart from Die Welt market analyst Holger Zschaepitz, a sell signal is flashing. In fact, the indicator just broke through a 30-month high…’

      Sounds pretty simple. Do you think the Millennial day traders will take heed and stand clear for the upcoming stock market reset?

  25. After seeing what actually happened since Covid started vs. what I expected to happen and it made clear who has what dog inw hat race, I’ve swung my opinion around a bit.

    I think the PTB are going to do everything possible to ensure that the economy, stock market and Housing sectors are going to stay afloat and inflating until the end of the year. The we’ll see things crash next year. That’s year #1 of a new administration, no matter which party is in charge. It buys them time to ride it out and get things into recovery by year #3-#4 of their administration. A crash and the accompanying panic, doom and gloom just before the election doesn’t benefit those in charge – if anything it hurts them, so kick the can down the road to a point in time where by the next election they can go “See! We pulled the economy up and made it much better” betting on the short attention span and memories of the masses.

    1. War$.a$.foreign.”Nation.building” $ubscriber, W.Bu$h’$ Oct 2008 Mega.Collap$e/Implosion$ kinda blow$ yer $afe after.thee.Nov.Election$ outta.thee.water$ … $omeone here on the HB.B often offer$ a direct W. Quote about this $orta $it.you.a.$hun.

    2. “…Housing sectors are going to stay afloat and inflating until the end of the year.”

      So far they are failing.

      1. These current articles are hidden behind paywall$. News of cratering rents doesn’t come for free like the REIC’$ ever-rising prices narrative does.

        L.A. rent is falling with some big drops in luxury buildings
        6 days ago ·
        Rents are declining in Los Angeles County, with the largest decreases seen in luxury properties, according to …

        San Diego rents down for the first time since Great Recession
        3 days ago · Rent in San Diego County is down very slightly, about 0.3 percent, but expected to drop more.
        …

      2. Like Ben is fond of reminding us, there’s too much cratering to document it in real time.

        Tech
        Published 2 hours ago
        Remote work is reshaping San Francisco, as tech workers flee and rents fall
        By giving their employees the freedom to work from anywhere, Bay Area tech companies appear to have touched off an exodus. ‘Why do we even want to be here?’
        …
        Rents are falling fast at LA’s priciest apartments
        Newer properties in Mid-Wilshire, Downtown have seen sharpest reductions, but neighborhood perks have also disappeared
        TRD LOS ANGELES
        Aug. 11, 2020 10:04 AM
        …
        Jul 17, 2020, 6:07pm EDT
        Manhattan Rents Drop To Record Lows As Demand Plummets
        Lisa ChamoffContributor
        Real Estate
        I tell stories about real estate with a focus on the New York market.

        With demand falling during the coronavirus pandemic, rents in Manhattan fell for the first time since the Great Recession during the last quarter, according to an analysis from New York City listing site StreetEasy.

        Nearly 35% of Manhattan rentals were discounted, with the median rent falling nearly 7%, or $221 per month, the report found. The Zillow Z +3%-owned company’s Manhattan Rent Index fell 0.9% to $3,236, the first year-over-year drop in more than a decade.

        “The sizable rental discounts seen during the second quarter are a very strong indication that demand for rentals in NYC is declining overall,” says StreetEasy economist Nancy Wu. “This demand will continue to remain low as new hires, interns and students start their jobs and school remotely rather than in NYC, and as many New Yorkers escape the city temporarily for the summer, or permanently due to job loss or interest in relocating. These factors will all lead to inventory piling up, and landlords will need to make more markdowns to meet demand.”
        …

      3. We know what to look at to see the rot spreading, but a lot of people aren’t seeing it yet – right now houses around here and many places are still selling like hotcakes to people who are relocating, and others who are trying to convert helicopter bucks/stock gains into something more tangible.

        All they have to do is keep the froth frothing (is that a word?) for about 4 more months r so, and since both parties would see that as beneficial to them, they’ll pull out all the tricks they have – rates, stimulus, leaning on the MSM, etc to push things out just a bit longer.

        2. “…many places are still selling like hotcakes…”

          Apparently not all of the government-sponsored subprime gravy has dried up, just yet.

          1. not yet. I mean, it’s not inconsistent with a looming crash. Just burning out the core ever hotter and faster.

          2. They must be buying their houses before selling their current homes, using savings or HELOCs for the down payment and overlapping mortgage payments. What will happen if they have to take a loss on their current homes? Or maybe they think they’re going to rent out their city home?

    3. Ruh roh…did Uncle Warren decide to go short on U.S. Inc.? What next…dogs sleeping with cats?

        1. Selling banks and buying gold miners is a no-brainer when you look at where the wrecking crew at the Fed is taking us.

        2. Newsletters
          The Ledger
          Is this the currency collapse Bitcoiners warned about?
          By David Z. Morris
          August 5, 2020 7:51 AM PDT

          Nearly three months ago, as America’s first huge coronavirus relief packages reached full swing, Bitcoin advocates struck on one of the most resonant memes in the cryptocurrency’s already meme-heavy history: Money printer go brrr. The meme is a concise summation of the ‘sound money’ thesis, which holds that the post-Breton Woods detachment of the global monetary system from the gold standard creates inevitable temptation for governments to debase their currency by, in technical terms … letting the money printer go brrr.

          There is now what could be taken as evidence that the memers had it right: the U.S. dollar has been slumping on foreign exchange markets. It had its biggest monthly drop in a decade in July, with one index measuring a nearly 5% decline. In trading terms, the dollar in July dropped 1.6% against a basket of currencies, and has lost a staggering 7.5% against the Euro since March. (The dollar saw a slight rebound in early August). On the other side of the equation, both Bitcoin and gold are surging, reflecting lack of market trust in fiat currency globally.

          So, blame the money printer?

          Maybe not. Bitcoiners and other hard money advocates are laser-focused on domestic inflation, not foreign exchange rates. The most cited examples of inflation-driven currency collapse include Weimar Germany and Zimbabwe. (Also worth noting: Those flailing states literally printed unbacked money. The U.S. Fed doesn’t do that – it issues redeemable debt. Not the same thing.)

          The distinction between forex and inflation is key. According to traditional economics, domestic inflation is driven by relatively straightforward supply and demand – inflation means too many dollars are chasing a fixed supply of goods. And domestic U.S. consumer inflation has stayed relatively in check, with the latest data showing the consumer price index growing just 0.6% in June. That was held down in part by of a lack of demand, particularly for energy, amid the coronavirus lockdown. One motivator of the U.S. relief programs that made the money printer go brrr was old-fashioned Keynesianism, an attempt to increase the money supply through debt-funded government spending, in hopes of replacing that missing demand and staving off a fate vastly scarier than inflation: domestic deflation.

          Foreign exchange markets have a different, more complex logic than domestic consumer prices, taking into account not just monetary supply, but broader measures of national economic strength and leadership – factors domestic spenders can’t fully take into account at the grocery store. Much of the dollar’s historic strength is based on its status as a ‘safe haven’ currency, which actually helped the dollar surge against other currencies in March, driven by early virus fears.

          So more than fear of the money printer, the dollar’s drop can be read as the expiration of early hopes that the U.S., and its financial system, would weather the pandemic better than other countries. Instead, the U.S. has by many metrics done worse than nearly any developed country. That health failure is now turning into a dramatic economic failure, especially with the U.S. legislature so far failing to extend pandemic relief measures. That failure unfolded at the same time as much of the dollar’s late-July forex slump – and at the same time that the E.U. approved a huge financial recovery package.
          …

        3. “Don’t fight the Fed, Uncle Warren!”

          ” … with a $135+ Billion$ in ca$h, “thee.Uncle” I$ having an ince$tuous$ fight with him.$elf” … $ad, dtRumpsis @ $969 Billion & going lower day.bye.day (-300+ million$) $ad, inheritance fer his off.$pring $ad. Yuge.ly $ad …

          65 year$ & No WWlll to harm inve$tments, & now Thee.Uncle bet$ again$t ‘Merika. Wow$ers, … Lincoln … To … dtRumpsis … 155 years … What a matching pair of Repubican book.End$

  26. Eye’m $till awaitin’ the “Trade.War$.i$.Ea$y!” Pha$e1, v7.6 Du$t to $ettle, let alone for $helter.$hack.price$.implo$ions & cra$hin’ U$.Dollar$ & China.Yougone$ to $lide.a$$under.

    Market$
    China’$ Banking Watchdog Warn$ U$ Fed Ea$ing Risk$ Financial Cri$i$

    Bloomberg News / August 15, 2020

    Chairman Guo also cites ri$ing bad debt$ at Chinese bank$
    Guo’s warning$ is the $econd in recent days on Covid
    The Federal Reserve’s unparalleled stimulus risks plunging the world into financial crisis, according to the chairman of China’s banking watchdog, who also warned that bad debts at Chinese financial institutions could balloon significantly this year due to the impact of Covid-19.

    “In an international monetary system dominated by the U.S. dollar, the unprecedented, unlimited quantitative easing policy of the U.S. actually consumes the creditworthiness of the dollar and erodes the foundation of global financial stability, said China Banking Regulatory Commission Chairman Guo Shuqing.

    “The world may once again be pushed to the verge of a global financial crisis,” he wrote in an article published in the Communist Party’s Qiushi magazine on Sunday.

    For China’s financial $ector, “after the Black $wan of the viru$ pandemic, a$$et quality will inevitably deteriorate,” Guo said.

    The article comes on the heels of a similar warning from Guo in an interview with Xinhua, where he cautioned that easy access to funding could spark a reemergence of financial irregularitie$, and that China should make preparation$ to deal with a rise in non-performing a$$et$.

    (— With assistance by Yuan Gao, and Sharon Chen)

    1. The Chairman is saying that too much lending leads to cascading defaults.

      Well Guo, only by those who borrowed too much.

      1. “only by those who borrowed too much.”

        “it’$ a wonderful thang that thee.china.government doe$’t borrow to buy U.$ National Debt$!”

    2. Is the China bubble too big to fail?

      The Financial Times
      Coronavirus business update 30 days complimentary
      Government of China
      China: The Bubble That Never Pops, by Thomas Orlik
      Beijing is neither about to collapse nor take over the world
      China’s president Xi Jinping. Orlik suggests the country’s leaders are more ‘imaginative and flexible than their critics give them credit for’
      © Thomas Peter/AFP/Getty
      Thomas Hale August 9 2020

      Xi Jinping’s Belt and Road Initiative — launched in 2013 with the prosaic ambition of funding infrastructure projects within and outside of China — has attracted two main critiques.

      Some saw it as an attempt to build neocolonial influence across emerging markets as US power waned. Others saw the failure of specific projects as further evidence of economic over-reach, already widely associated with Chinese ghost towns and bridges to nowhere.

      To Thomas Orlik, chief economist at Bloomberg Economics, these responses amount to an acute case of what he calls “sinophrenia” — a condition of modern commentary that combines the belief that China will imminently collapse with the belief that it is taking over the world. It may be the sign of a first-rate intelligence to hold two contradictory ideas in your mind at the same time. But Orlik argues that both views focus so intently on their own version of the future that they miss what exactly is happening in the present.
      …

      1. Thi$, coming from the bigge$t moneie$ printer$ of them all.

        (Yous forgot to mention/blame it on the non.American/Kenyan O’bammy)

          1. Thee. “Kenyan” was de$troying America for 8 years!. … 8 i$ thee $in.bull for Eternity. Geez, ya think eye could get hired bye $teve.Bannon or Faux.New$ with such non.$ense?, … oh wait, gue$$ eye’$ have to $tand.in.line$ …

    1. Love how the Narrative insists that the rats are fleeing COVID and not the crime and lawlessness. We have COVID here too in my little burg, but no one is fleeing. What we don’t have is DeBlasio or Cuomo.

      1. NYC moms fleeing Upper West Side amid crime and chaos
        By Doree Lewak
        August 8, 2020 | 10:20am
        A shirtless man carrying a bottle of vodka cries out on the street as children pass by at West 79th and Broadway. Helayne Seidman

        Start spreadin’ the news, they’re leavin’ today!

        However, the people packing their bags are not coming to New York City — they’re fleeing it for good.

        Due to increasingly squalid conditions on the Upper West Side, including two new homeless shelters packed with junkies and registered sex offenders, longtime dwellers are departing the Big Apple with no plans to ever return.

        One of the Escape from New Yorkers is Elizabeth Carr, one of the area’s most vocal leaders in combating mounting crime in the well-heeled ‘hood. She was an administrator of the Facebook group NYC Moms for Safer Streets, and the face of a public-safety movement that has attracted thousands to demand better policing and city services.

        “In the best of times, NYC is a hard place to live,” said Carr. “Now you have all this other stuff. It’s a question for families … to have to see a guy masturbating on the corner or explain to my kids while I’m buying diapers at Duane Reade why this guy wearing no shoes is collapsed on the floor and they’re doing CPR on him.”
        …

      3. True, they aren’t fleeing COVID. COVID is everywhere. It’s not like they can party safely maskless in Westchester County or Montauk. But it was COVID that enabled them to work from home, which enabled them to flee the crime, lawlessness, and high taxes.

  28. The Financial Times
    George Russell 2 hours ago
    Covid PTSD rates ‘worse than after terror attacks’: study

    The rates of post-traumatic stress disorder in Covid-19 patients appear higher compared with those of emergency service staff after a terrorist attack, according to a new paper.

    The survey, of 60 patients admitted to University Hospital of Essen in Germany between March and May, showed a prevalence of significant post-traumatic stress symptoms of 37.9 per cent in all patients and 42.1 per cent in the subgroup of patients with later confirmation of Covid-19.

    “Thereby, the rates for PTSD in Covid-19-affected patients appear higher when compared to PTSD rates in the general population (11 per cent) or in emergency service staff after terrorist attacks (25 per cent),” they said.

    The researchers, led by Ulrich Wesemann of the Bundeswehr Hospital in Berlin, said they could not replicate the findings of an earlier Chinese study that indicated prevalence rates of “significant post-traumatic stress symptoms” far above 90 per cent.

    The German study was published in Psychological Medicine on Friday.
    …

    1. Just so we are clear, the PTSD is from media and government responses to the said ‘pandemic’.

  31. I just can’t wrap my mind around all the money sloshing around out there, in supposedly the worst economic downturn since the Great Depression.

    Used car prices are spiking during the coronavirus pandemic

    Buyers are flooding the used-car market, looking for deals amid high prices for new vehicles, low interest rates and a shortage of new-vehicle inventory, according to car-research site Edmunds.

    The average listing price of used vehicles was $21,558 in July, up $708 from June.

    “This is an unprecedented historical shift in the used vehicle market, where listing prices typically decrease during this time period due to depreciation,” Edmunds said.

    https://www.poynter.org/reporting-editing/2020/used-car-prices-are-spiking-during-the-coronavirus-pandemic/

    1. a shortage of new-vehicle inventory

      I just took a look at the local dealerships online. All have tons of new vehicles available.

      1. “just took a look at the local dealership$ online. All have ton$ of new vehicle$ available”

        Doe$ Ok.Toyota.Corolla $ell more vehicle$ in ‘Mericka, or $lanty.eye.ville, China?

        Joe.Friday: “Ju$t.thee.fact$.mame!”

      2. “I just took a look at the local dealerships online. All have tons of new vehicles available.”

        This weekend I went out for my bicycle exercise right around 0600, and my warm-up takes me through a variety of working-class neighborhoods where I couldn’t keep count of the new pickup trucks still sporting the dealer cardboard in the license plate frame. They’re blindly heading into the “lost decade” in style!

    2. “Used car prices are spiking during the coronavirus pandemic”

      dtRumpsis Chaositic Tantrumeois, think$ thi$ i$ $pectacular for American$!

      Oddly, $o do Argentinean’$, they e$pecially find particular value in a 1957 Chevy Bel.Aire, & even more oddly, $o do Cuban$!

    3. Think financial churn to hide an epic financial collapse. As long as the balls keep flying back up into the air, it’s all good.

      1. “financial churn to hide an epic financial collap$e”

        Thee.🍊.jesus: “Greatest e.CON.omy Ever!” = “Hollow.Man who $peak$ with twi$ted fork.tongue! … By Chief “grab$.’em.in.thee.crotch!

      2. “Think financial churn to hide an epic financial collapse.”

        These tough guys here in Truck Country are probably trading-in their high unpaid balance 3-yr old trucks for new and getting lower monthly payments!

    4. That would explain why they called me up yesterday and tried to sweet-talk me into trading in my Camry. For giggles I looked it up on KBB. Trade in value is ~$15500.

      $21550 is a lot for a used car. I bought my Camry — new — for only $2K more. (Dave Ramsey still thinks we can buy a beater for $1500.)

      1. The $21K number is probably colored by used SUV’s. The new ones keep getting more expensive, so the used prices ride on its coattails.

        When I go out I would say that 2/3+ of the vehicles on the road are either trucks or SUV’s. There’s a reason why GM and Ford have basically cancelled all their sedans.

  32. The g-fee increase is curious. If the GSEs implode, they’ll just get bailed out: https://projects.propublica.org/bailout/ – the advocates state that they’ve returned 100 billion more than they received.

    The Fed, proxy for the government and Wall Street, is trying to spark another bubble with cratering interesting rates and printing money to buy any debt it can: https://www.cnbc.com/2020/06/29/the-fed-is-buying-some-of-the-biggest-companies-bonds-raising-questions-over-why.html

    It’s called the FIRE sector – Finance, Insurance, Real Estate. They all are closely intertwined. Is this a failure of communication between the Fed and the FHFA? Is the FHFA chief trying to put a damper on things (see the very surprising statements coming from the CHMC chief quoted in the original post above).

    GSE finances don’t really matter as far as I can tell, any more than the Navy’s finances matter. You need more cash, you get more cash, no questions asked.

    I doubt it reflects any kind of sea change in the thinking of government or Wall Street but it is a curious dissonance.

      1. Right. They are already crafting the narrative for when they lose – HE STOLE THE ELECTION! I suppose that will go on for the next 4 years.

    2. Republicans got spanked from mail in ballots, and they’re still not sure why ( I mean, how many people can send in a ballot and still go vote – is there any way to counter that? What about duplicate ballots? Changing bar codes can’t be that hard. Other ways to skirt voter authentication? )

      From the Atlantic: “As polling places closed on November 6, 2018, the expected “blue wave” looked more like a ripple. Not only had some of the highest-profile Democratic candidates lost, but the party’s gains in the House and the Senate looked smaller than anticipated.

      The wave, it turned out, simply hadn’t crested yet. Over the ensuing weeks, as more ballots were counted, Democrats kept winning races—eventually netting 41 House seats. In Arizona, the Republican Martha McSally conceded the Senate race to the Democrat Kyrsten Sinema, who picked up more than 70,000 votes in post–Election Day counting. Democrats narrowed deficits in races in Florida and Georgia too. Republicans were stunned.

      “California just defies logic to me,” then-Speaker Paul Ryan said in late November. “We were only down 26 seats the night of the election and three weeks later, we lost basically every contested California race.”

      https://www.theatlantic.com/ideas/archive/2020/08/brace-blue-shift/615097/

      So naturally, they want to close that gate.

      1. A good friend was tasked with doing data analysis on key Florida voting districts and found massive fraud. If you all are not aware of Brenda Snipes and Broward County irregularities this will give you some indication of the level of fraud which can transpire.

        The emphasis on mail in voting to me just means that the dems will continue to ‘find’ boxes of ballots until a particular election is won.

        This isn’t to say that the Republican Neo-Con party members are incapable of such things as evidenced by the Romney campaign against Ron Paul some years back but the Democrat machine is fine stealing an election as the ends always justify the means.

    1. LOL@ so many of these parties in Las Vegas and Los Angeles are Instagram influencers getting paid to be there, Onlyfans girls (i.e. prostitutes), and celebrity DJs who can’s play any instruments, or even physically spin vinyl records.

      ClownWorld gonna clown.

    2. Only the ones that make the news. For every one of these shootings, how many other house parties are going on? No wonder we can’t get a handle on this virus.

      1. No wonder we can’t get a handle on this virus.

        It might also explain why certain minority groups are being hit harder by the virus. But to point out that it might be their own fault is racist. They should get COVID reparations, or something.

  37. ClownWorld Chronicles, Portland edition, August 17, 2020.

    (Graphic video) here a suckerpunch head kick to a man who is left unconscious on the ground while the marxists dig through his pockets:

    https://twitter.com/MrAndyNgo/status/1295237299916038145

    Note that the assailant (attempted murderer) was identified WITHIN HOURS, not by police, not by the media, but by the readers of an anonymous message board doing image searches and scraping social media.

    Regarding this blog, it’s safe to say this is probably a good neighborhood to not buy a house in.

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