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So While Every Bank Is Defending PrimeX, Here Is What Fannie Mae Really Thinks
Remember when it was your job to be cheerful and optimistic if creating forecasts for insolvent and nationalized entities, whose entire pseudo-business model is predicated upon the return of the housing bubble and the overall Ponzi resuming? Apparently not, especially if one has read the following forecast from none other than Fannie Mae. So while we have Barclays, Deutsche, JPM, TCW, and any other axed bank , you name it, defending PrimeX which is nothing more or less than a bet on the "safe" tranche of US home price prospects and housing overall, here is the one entity with more mortgages on its books than any other organization, telling us how it really feels.
Summary:
- Projecting 10yr treasuries to plunge to 1.90% by 4Q11
- Median New / Existing home prices will fall 7.1% / 7.7% respectively by mid 2012
- Purchase Mortgage Origination will decline 21.5% from 2Q11 levels
- Total Single family mortgage debt will decline 3.0% by 4Q12
- First Lien single family mortgage debt will decline 2.3%
- The imputed (based on reported first lien & total) 2nd lien mortgage debt will plunge 10.2% vs. 2Q11 levels (hmm why W
- Would somebody with a first lien allow a junior creditor to get paid off first?)
Full breakdown
Source: Fannie Mae
h/t John Poehling
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we're doomed.
What's this 'we' pale face, as Tonto said to the Lone Ranger.
You're doomed. I don't live there...
To stay solvent, the two firms together have needed about $169 billion in taxpayer bailout funds,
$160 million. That's how much U.S. taxpayers have spent on legal fees to defend the firms and their former executives against pending lawsuits.
"The U.S. government has trillions of dollars of debt outstanding. With the takeover of Fannie and Freddie, the government will add trillions more to the burden, because the Treasury will, in fact, guarantee all the Fannie and Freddie debt,"
Republicans, Hank Paulson, George Bush, John McCain all supported the nationalization (read: the real socialism) of Fannie an Freddie.
China was also the top holder of the bonds issued by Fannie Mae and Freddie Mac.
U.S. government's decision to take control of foundering mortgage giants Fannie Mae (FNM) and Freddie Mac (FRE) was driven not by worries about the fading U.S. housing market, but by concerns that foreign central banks in China, Japan, Europe, the Middle East and Russia might stop buying our bonds.
More than $1.3 trillion worth of Fannie Mae and Freddie Mac debt currently held by the central banks and other investors in those regions will be guaranteed by the U.S. government – even if one or both of the two government-sponsored enterprises (GSEs) were to fail. That means that U.S. taxpayers will ultimately foot a big part of the bill for making sure those foreign bondholders are "made whole."
US government sold your children out so they can bail out foreign central banks.
If you boomers still don't understand what Occupy Wall St. is about then perhaps your children do deserve the enslavement.
Ha... watched any interviews of the protesters? They don't understand what Occupy Wall St. should be about.
Fan/Fred failure is all libs, and to blame conservatives is revisionist. Conservatives tried for years to reign in the GSEs, lest the gubmint's implicit backing of them one day become explicit. Which it has. Blame Bawney and Dodd for preventing Dubya and Cong. Richard Baker of La. from stopping libs Frank Raines and James Johnson from handing taxpayer this huge 1/2 trillion $ bill. OWS protestors ought to be standing out side the condo building that Johnson, Raines and Harry Reid live in - that should be ground zero of OWS.
Don't forget to get the big fraudulent bonuses back from Clinton appointees, Frank Raines and Jamie Gorelic. He was forced to disgorge some of that loot already. Oh, and shouldn't we prosecute notorious liars who stated Fannie was just the best ever. I mean people like Bawney Fwank, pockets fat with Fannie contributions, telling us how great things were? And Pelosi and Waters and Obama? All paid shills they were. You forgot them somehow... They all resisted and defeated The Bush Admin efforts to get some regulatory control over these fraudsters. The money was just too good for Democrats to put taxpayer interests ahead of their own.
not just the pockets fat w/"contributions."
that explains the strength in banks and homebuilders today. [/sarcasm]
the market is efficient. proof here - http://hedge.ly/q2k4d6 - ha nope. we are indeed doomed.. insider information runs this market.
According to Nassim Taleb
Freddie & Fannie should have been placed into BK. Their assets could have been sold instead of pumping more money into them for no good reason. Had the government had the good sense to offer the borrowers an option of paying 50% of principal to buy their own mortgage it would have created more new loans and gotten rid of bad ones and not cost the tax payers anything. Instead the government squandered hundreds of billions of dollars and did not solve one single problem relative to housing.
How can anyone persist in trying to argue what should or shouldn't have been done or should be done in the future?
THE SYSTEM IS A FRAUD. ALL DECISIONS FLOW FROM THAT FACT.
In 1913, the Federal Reserve was created to skim money from the people. Just like the cartoon two nights ago predicted. A fiat, debt-based system REQUIRES constant debt growth. Government and bankers were BOTH in on the scam. Everything they have done, and will do, will be to protect this fraud and the fraudulent system. They will stop at NOTHING. They will corrupt the educational system. They will corrupt the nutritional system. They will send young men and women to die in foreign wars. They do not care.
The system is a fraud. Stop pretending there is ever an ounce of humanity in it.
My exact thoughts traderjoe.
"They will corrupt the educational system. They will corrupt the nutritional system"
"will" shit, they are, they do and they continue.
So look at half of what you possess is created from all the ponzi. Most people don't give a shit about others and want to keep on, keeping on the game. "I earned all the stuff I got." Like hell you did.
"I earned all the stuff I got." Like hell you did.
Right. It really belongs to you because you earned it. Where do I send the check?
Absolutely!! The game is rigged and a fraud from 1913 on. They steal from us every single day by taxation (federal income tax on gold and silver was ruled unconstitutional in 1895, but taxation on private credit is ok) and inflation. Then they still need their fucking bailouts on top of that. Get back to gold and silver and the rest fixes itself. Who the hell would have ever loaned the U.S. 14 trillion in gold??
"Would you like a mint with that fraud sir?"
"Yes, I would thank you very much."
"Your welcome and your $5,000 used BMW 7 hundred series "ultimate driving machine" is out back all washed and ready to go."
"Thank you!"
Yes. I know. It's like shouting into a well. Nevertheless, there is always the outside chance that it might do some good.
Ah feel yur pain.
--Bill Clinton
Three words...Credit Default Swaps
Perhaps the projected plunge in second mortgage debt reflects bank charge-offs / write-offs rather than loan payoffs. A high % of subordinate SF debt today is effectively unsecured due to declines in collateral values and is often charged-off in full...
no, the loan in first position will not allow the loan in second position to get paid first, which is why the loan in second position often ends up buying the property, provided the property is "worth" more than is owed on the first
so the second tends to disappear one way or another in a distressed situ: either thru taking over the first, or getting wiped out b/c there is more debt than equity on the property @ sale price
and the bonds are in even more senior position, but, well... Ruth Ginzberg says: "Oh, what the heck..."
- Ned
{got property rights?}
2nd lien = home equity draw downs?
2nd lien = home equity draw downs?
I love that the sychophants are turning on one another: but I hate the false precision in FNM's guesswork......1.9% 10 year by end of quarter. Etc.
What a joke.
And people would listen to FNM... why? What next, Barney Frank joins CBO as Director?
I never understood what was so hard to understand about the phrase "housing crash" and the fact that when 33% of the people with prime notes are underwater, odds are at least 20-30% of them (at a minimum) will walk away.
We've sanctioned the abandonment and entitlment mentality by bailing out banksters and subprime/Alt-A borrowers so why shouldn't the prime borrowers expect the same?
This shit will not end until we see home prices down another 10-20% nationwide and foreclosures jacked up by at least 2-4 million over current projections.
And the banksters know it.
Actually it's worse than that.
The great Baby-Boomer die-off begins in earnest in just a few years.
Demographically this will be profound.
Consider these two facts:
1) Statistically, the vast majority of inherited homes are resold.
2) 80% of real estate value is owned by boomers.
The flood of real estate waiting to return to the market is going to be epic.
Then again, the kids may not own homes of their own and may decide to live in those houses or at least rent them out for the income. Inheritance may become a prime means of home ownership.
The strategic defaults that will occur as a result of another 7+% loss in home values...this will lead to continued deterioration in home prices which in turn will lead to more strategic defaults and so forth until the housing market implodes. One of three things will happen: 1. The banks will own all the homes and be propped up by the government and will 'control' supply thereby pushing up prices over time (as long as there is someone who can buy the house), 2. The rich will buy all the homes through insider deals with the government, 3. There will be a rebellion and as Jefferson once put it, "the tree of liberty must be replenished from time to time with the blood of patriots and tyrants".
I guess only time will tell...
We all vote for #3 ...
... with extra tryant blood.
That Talib interview above is like some kind of spam. It took forever to make it stop replaying.
NEW YORK - The following is a letter released today by Lloyd Blankfein, the chairman of banking giant Goldman Sachs:
Dear Investor:
Up until now, Goldman Sachs has been silent on the subject of the protest movement known as Occupy Wall Street. That does not mean, however, that it has not been very much on our minds. As thousands have gathered in Lower Manhattan, passionately expressing their deep discontent with the status quo, we have taken note of these protests.
And we have asked ourselves this question:
How can we make money off them?
The answer is the newly launched Goldman Sachs Global Rage Fund, whose investment objective is to monetize the Occupy Wall Street protests as they spread around the world. At Goldman, we recognize that the capitalist system as we know it is circling the drain - but there's plenty of money to be made on the way down.
The Rage Fund will seek out opportunities to invest in products that are poised to benefit from the spreading protests, from police batons and barricades to stun guns and forehead bandages. Furthermore, as clashes between police and protesters turn ever more violent, we are making significant bets on companies that manufacture replacements for broken windows and overturned cars, as well as the raw materials necessary for the construction and incineration of effigies.
It would be tempting, at a time like this, to say "Let them eat cake." But at Goldman, we are actively seeking to corner the market in cake futures. We project that through our aggressive market manipulation, the price of a piece of cake will quadruple by the end of 2011.
Please contact your Goldman representative for a full prospectus. As the world descends into a Darwinian free-for-all, the Goldman Sachs Rage Fund is a great way to tell the protesters, "Occupy this."
Sincerely,
Lloyd Blankfein
Chairman, Goldman Sachs
Gold man!
Haha terrible pun! Also, this is the first time I've seen his name written. I had always heard it as Lord Blankfine which, much like the names of US politicians(Weiner anyone?), seemed to fit nicely with his job of essentially fining people vast (blank cheque) sums of money.
Lord Blank-Fine. If the hat fits...
"therefore we would like to announce our OWS(tm) line! (Now officer please start arresting those people...they're PLAGIARIZING!"
awesome
not good for bac and wfc, among others
well we all know the government lies. i mean their statistics are all made up... and shit.
5:01pm Hawaii time this Friday would be a fine time for the FDIC to shut down B of A, don't you think?
I vote "yes".
And the pronouncements, predictions and forecasts of FNMA are worth . . . . ?
Two words the TBTF banks and TPTB fear the most (Geithner and the Bernank wake up in cold sweats after nightmares about these words)...Strategic Default!
Can you say, "It's over!" I have a buddy whose parents are both retired teachers. They asked their financial planner where they should invest their retirement funds in the current environment. He told them to go buy canned food (lot's of it) and ammo for their guns and told them if they didn't have guns to go out and buy some. It may be awhile off yet, but the day of reckoning is getting closer.
So.... What is PrimeX, and where can I look at its value?
when were these forecasts published? 10 Y T Yield have actually overshot their forcast to the downside before bouncing
I apologize in advance for the length of this, but it's not really available for me to link to.
Bakunin predicted all of this, Wal-Mart, Wall Street, 240 years ago.
Read on:
Let us even suppose, as it is being maintained by the bourgeois economists and with them all the
lawyers, all the worshippers and believers in the juridical right, all the priests of the civil and
criminal code - let us suppose that this economic relationship between the exploiter and the
exploited is altogether legitimate, that it is the inevitable consequence, the product of an eternal,
indestructible social law, yet still it will always be true that exploitation precludes brotherhood and
equality. It goes without saying that it precludes economic equality. Suppose I am your worker and
you are my employer. If I offer my labor at the lowest price, if I consent to have you live off my
labor, it is certainly not because of devotion or brotherly love for you. And no bourgeois economist
would dare to say that it was, however idyllic and naive their reasoning becomes when they begin to
speak about reciprocal affections and mutual relations which should exist between employers and employees. No, I do it because my family and I would starve to death if I did not work for an
employer. Thus I am forced to sell you my labor at the lowest possible price, and I am forced to do
it by the threat of hunger.
But - the economists tell us - the property owners, the capitalists, the employers, are likewise
forced to seek out and purchase the labor of the proletariat. Yes, it is true, they are forced to do it,
but not in the same measure. Had there been equality between those who offer their labor and those
who purchase it, between the necessity of selling one's labor and the necessity of buying it, the
slavery and misery of the proletariat would not exist. But then there would be neither capitalists, nor
property owners, nor the proletariat, nor rich, nor poor: there would only be workers. It is precisely
because such equality does not exist that we have and are bound to have exploiters.
This equality does not exist because in modern society where wealth is produced by the
intervention of capital paying wages to labor, the growth of the population outstrips the growth of
production, which results in the supply of labor necessarily surpassing the demand and leading to a
relative sinking of the level of wages. Production thus constituted, monopolized, exploited by
bourgeois capital, is pushed on the one hand by the mutual competition of the capitalists to
concentrate evermore in the hands of an ever diminishing number of powerful capitalists, or in the
hands of joint-stock companies which, owing to the merging of their capital, are more powerful
than the biggest isolated capitalists. (And the small and medium-sized capitalists, not being able to
produce at the same price as the big capitalists, naturally succumb in the deadly struggle.) On the
other hand, all enterprises are forced by the same competition to sell their products at the lowest
possible price. It [capitalist monopoly] can attain this two-fold result only by forcing out an ever-
growing number of small or medium-sized capitalists, speculators, merchants, or industrialists, from
the world of exploiters into the world of the exploited proletariat, and at the same time squeezing
out ever greater savings from the wages of the same proletariat.
On the other hand, the mass of the proletariat, growing as a result of the general increase of the
population - which, as we know, not even poverty can stop effectively - and through the increasing
proletarianization of the petty-bourgeoisie, ex-owners, capitalists, merchants, and industrialists -
growing, as I have said, at a much more rapid rate than the productive capacities of an economy that
is exploited by bourgeois capital - this growing mass of the proletariat is placed in a condition
wherein the workers are forced into disastrous competition against one another.
For since they possess no other means of existence but their own manual labor, they are driven,
by the fear of seeing themselves replaced by others, to sell it at the lowest price. This tendency of
the workers, or rather the necessity to which they are condemned by their own poverty, combined
with the tendency of the employers to sell the products of their workers, and consequently buy their
labor, at the lowest price, constantly reproduces and consolidates the poverty of the proletariat.
Since he finds himself in a state of poverty, the worker is compelled to sell his labor for almost
nothing, and because he sells that product for almost nothing, he sinks into ever greater poverty.
+1