• Steve H. Hanke
    05/04/2016 - 08:00
    Authored by Steve H. Hanke of The Johns Hopkins University. Follow him on Twitter @Steve_Hanke. A few weeks ago, the Monetary Authority of Singapore (MAS) sprang a surprise. It announced that a...

Fannie Mae

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The Cult Of Central Banking Is Dead In The Water





So what is to be done, as Lenin once queried? In a word it is this. Fire the Fed. Attend to supply side policy. Let market capitalism do the rest. The cult of central banking is dead in the water.

 
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The Party Is Over: Regulators Propose To Cap, Defer And Clawback Wall Street Bonuses





Coming off a year in which Wall Street experienced the lowest average bonus since 2012, it now has to brace itself for new regulation on incentive compensation. One of the last pieces of Dodd-Frank to be written and implemented, regulators are looking to firm up the rules surrounding incentive pay for banks. The final regulation, once agreed upon, will not just apply to banks, it will also apply to investment advisers, broker dealers, credit unions, and executives at mortgage finance companies Fannie Mae and Freddie Mac according to the Wall Street Journal.

 
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U.S. Home Prices Are 14% Overvalued According To Bank of America





In order to gauge the ‘fair value” of home prices, we typically compare prices to the trend in income. The logic is simple – the more income one earns, the more housing he/she can access. However, prices will occasionally diverge from income, as we are experiencing now and clearly did during the early 2000s. As we have been arguing, home prices are currently overvalued - by our estimates 14% on a national level.

 
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Bernie vs. Ron Paul: There's No Comparison





The comparison of Bernie to Ron goes like this: both launched insurgent, anti-establishment presidential campaigns while in their 70s, shook up their respective party establishments, and attracted large youth followings. But Bernie is no Ron. More importantly, Ron urged his followers to read and learn. Bernie’s platform merely regurgitates the fallacies and prejudices his young followers already imbibed in school. What more is there to read?

 
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The Long History of Government Meddling In The American Marketplace





Attempts to control economic growth through government spending and/or manipulating interest rates (e.g., stimulate growth with low rates) generally leads to more severe crises. None of these things are recent phenomena, but can be found again and again throughout American history. Today, there is no party that favors true privatization or free markets. The solution, however, is simply to take as much power as possible out of the control of corruptible politicians and their special interest supporters.

 
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Freddie Mac, Bank Of America Launch Another 3% Down Mortgage Program





In what looks like a spiteful move designed to undercut the FHA, Bank of America has partnered with Freddie Mac on a new mortgage scheme that will allow borrowers to make down payments as low as 3%. Because that's just what taxpayers need. Fannie and Freddie making more bad loans. 

 
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Fannie, Freddie May Need Another Bailout As Washington Drags Feet On Housing Finance Reform





“The most serious risk and the one that has the most potential for escalating in the future is the enterprises’ lack of capital," Fannie's top regulator, Mel Watt says. The GSEs' capital buffer is being steadily depleted as the government sweeps the entirety of the businesses' profits, putting taxpayers in the absurd position of having to bail out two entities they've already bailed out due to the constraints imposed in an effort to recoup the first bailout.

 
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3% Downpayment FHA Loans Surge As Subprime Buyers Are Back In The Housing Market





Americans across the country have been priced out of the U.S. housing market since the “recovery” began due to a combination of factors; stagnant wages, private equity purchases and money laundering foreigners. As such, many potential first time buyers have been sidelined despite the availability of meager 3% downpayment loans from the FHA as well as Fannie Mae and Freddie Mac. Fortunately for the U.S. ponzi scheme economy, the U.S. government has a solution. Lower mortgage insurance premiums.

 
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'Bankrupt' Mortgage Lenders Unveil The Zero-Money-Down "Friends-And-Family" Mortgage





Ripping straight from the pages of the "those who failed to learn from history are doomed... period" book of centrally-planned desperation to maintain American Dream 'wealth' by unsustainably levitating home prices, the government's bankruptcy mortgage guarantors have just announced "HomeReady Mortgages." These so-called 'enhanced affordable lending products - provided by the US taxpayer - enable 97%-plus Loan-to-Value loans to borrowers based not on their income (which is too low) but on "non-borrowers" like extended family or children! "Whatever it takes" to maintain the illusion of normalcy and hand out more money just reached peak Einsteinian insanity.

 
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The Stench Of Freddie Mac Is Back - An $18 Billion Spree Of Crony Capitalist Thievery





Washington’s capacity to foster crony capitalist larceny and corruption never ceases to amaze. But as we recently noted, Wall Street’s shameless thievery from US taxpayers is about to get a whole new definition.

 
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The End Of The Fed's Self-Deluding Feedback Loop Of False Information





The world is bankrupt after thirty years of borrowing from the future to throw a party in the present, and the authorities can’t acknowledge that. But they can provide the conditions for disguising it, especially in the statistical hall of mirrors that once-upon-a-time produced meaningful signals for the movement of capital. The Dow, the S&P, and the NASDAQ are the only signaling mechanisms that the legacy media pays attention to, and the politicos take their cues from them, in a feedback loop of false information that begets more delusional positive psychology in those same markets.

 
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The Most Devious Liars In The Room





There were a few different stories coming out over the last few days that reveal the true nature of government and the apparatchiks who use disinformation, devious machinations, fraudulent accounting, and taxpayer money to cover up their criminality, lies, and the true state of the American economy. The use of government accounting tricks to obscure the truth about our dire financial straits is designed to keep the masses sedated and confused.

 
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