January 1, 2010

By; isisqd@yahoo.com

A Late Rebuttal To The CATO Paper

Fannie Mar and Freddie Mac: An Exit Strategy for the Taxpayer

One of the more social aspects of this Cato Paper coming into view, as the some of the
new Fannie and Freddie changes hit the pavement of the real world, is how much we all
know and should we know that much?
As Yield Spread Premiums and Loan To Values becomes the every day knowledge of
just about any one who can manage the money from their approved loan application. The
bigger part of the picture is the laymen non industry specific at a glance input, that make
up just about every one else who is not a finance professional who has to make decisions
about what to do next.
As to those who take the time to read this type of mini rebuttal to the Cato Paper. It will
be in Laymen terms and understanding that the true picture emerges in what really
happened to the US Economy that will be undisputed but only in the readers mind. To
those who themselves are the witness to this truth, it will be before you what to do next in
your own purpose, support and vote in future issues as either; in agreement or a
possibility of a turn around upset that could still save the day!
The GSE, which for those who didn’t know is short for, Government Sponsored
Enterprise has only one goal.
This was to regulate the industry and product of finance by being a part of it.
From its formation in Fannie Mae way back in 1938 seemed to be the fact, “Why it took
so long to become a part of the history it simply monitored by example?”
As the debts and financial products evolved, not just in what was being offered to
investors, but the evolution of who now knows what these product and abbreviations
stood for. Along the way of the all mighty dollar, what was once a simple to do no
brainer that rose out of the security of the corporation from another industry that said,
“That sole owners were to become liable with their company through law suits.”
All those in this evolution learned new words and meanings for words and all about an
industry that seemed easy enough if you could catch on to the numbers and the lingo, as
well as profitable if you could find a niche.
The fact of the legal position of sole business owners in the late 1950’s to mid 1960’s
became the American testing ground for taking the wealth of one person and making
them pay for mistakes and other liable actions based on or around them and or their
business.
Hence became the Freddie Mac of the 1970’s.
A fact that may have well been needed by all the people who serviced the legal
community at that time, that started to learn about the big bucks of a sole proprietors
wealth and in the process of the legal actions that started to be allowed into courts
seeking restitution for mistakes of a company’s owner(s)learned a new trade.
This fact was also a laymen fact to the finance industry, that could not be seen clearly the
future consequence at that time, nor detect the socialist ramifications of those who may
have had more long term expectations of how society could be moved to change its
founding doctrines.
It was by the mid 1970’s and onward no longer safe for a business owner to simply own
his company. He had to then incorporate and share his wealth with others based simply
on the legal way the nation had turned.
The fact of the GSE becomes an ever more needed fact, to be in place to mimic what
parts of the finance industry was doing in being able to stay current in understanding
what the new trends were by participation in this fact.
What ever happened from then to now, only leaves the first fact of social manifestations
of those who simply were not just greedy but envious of systems of wealth and felt they
to should have a piece. In the 1970’s and 1980’s the social focus of people back then was
education and the lack of a chance at promising futures not loans. This was as we see
today in different subject matter that social fact of what was promised and delivered
through the years, as more people and more opportunity became better known about ways
to finance a college education, which existed in the 1970’s, but people just did not know
how.
Like many in more recent time learned about getting a home because of people who
failed as homeowners.
Armed with knowledge about school loans and grants, as well as substandard education
practices that lived in low economic communities. The 1980’s to the 1990’s became the
years that just like the Yield Spread Premium and the Loan to Value knowledge of the
common man today was then the new big thing that everybody knew to do and how to
do, “Get a collage degree to get rich!”
At the bottom of every year stretch noted on page 4.
Was behind it a social practice and socialist undertone that continued to reek its ravaging
hand on American society, in as how far could America be changed with out knowing.
The one fact that to this day has saved our country and design of freedom a chance at life
not a guarantee, was in some way the finance community and its products. Unlike the
sheer will and ideal of men and women in ideals, in finance there is always a bottom
number, as there can only be so many cookies in the cookie jar and dreams and ideal can
be endless. It is in this way that the socialist temptation of one controlling the destiny of
the course of another’s life that every thought and ideal that was laid abound, was simply
notes, packages and paid for in the form of the various bank notes that changed hands
from one person to the next.
The fact of the time line and how styles of lending are pretty well defined, by the year
2000 the first, sub prime I got my chance loan, went out to the masses that gave a choice
of interest only terms of either 5 to7 years.
By 2005 there was a problem and by 2007 there was a looming catastrophe. That by 2008
it was now seen: That most of those who under the false pretenses of bringing this
socialist style of what one thinks their owed, how much because of this looming life debt
that should be a fronted towards their pieces of the dream and then many who believed
the latter and now said, “We will not or cannot pay this money back.”
The socialist man and its gully creep at real prosperity had yielded its head and some how
some one paid it off in a loan became the downfall of the hidden socialist drive that many
had missed and many thought no one even new had appeared.
How the government and the finance industry handled this will of the people gone left
was nothing short of pure genius.
What should have happen in 2008 to 2009 was the interest rate for new homes should
have went up to 11% to 15% for conventional loans.
Only those who could afford to play would pay, those who defaulted on their loan should
have been put in the street from their homes with in 3 months of the first missed payment.
And life should have simply went on in owning things for those who could afford and
were responsible enough to do so.
What ever happened next would then have been the American way.
Keep in mind that it would have been a lot cheaper for this country to put every defaulted
homeowner and their families simply on welfare in subsidized housing until they could
get back on their feet as it looks today.
That is the real truth.
Now on the last leg as was said by this writer same topic another story of a lame horse,
we wait again for the same people when we stop talking about it, to simply not pay their
bills for what ever reason and meet the end of the American dream.
You own a home your mortgage is 2000 or 3000 or 4000 a month and Christmas is
coming you have 4 kids and can barely afford it.
What happens?
Hey I guess the kids will aside from all doing homework, watching TV and even eating
in the same one room in a big house to save on electric.
They will not be getting much from Santa this year and yes the bills are paid.
It can not be the American Government that pays for more Flats screens and fancy
running shoe for boys and girls that in all cases in some states don’t even have a right to
free food stamps if their parent have lived in the streets for more the 5 years.
It is the socialist America of two Americas one that is American and one that is socialist
that needs today to be confronted if any thing can be seen as getting better economically.
If there were no social programs to conform socialist ideals that are also a right, but not a
platform of law making.
Then today there might be an America that based on the socialist ideals that have caused
this very rocky America today a civil war of the people who have no place to live, no
food to eat, no clothes on their back and no help that one day stood up.
But that was what has kept America and today many in many parts of the world at peace
from the need of the envious social nature that can often take over whole countries if it
was not held in check by social programs that in some ways guaranteed everybody had a
right to shelter, food and other facts of life especially when so many had so much.
Look at it like this, the regulations that are supposed to help certain home owners change
things about their loans as well as new homeowners to buy homes has rules such as for a
singles family home it is something like a $417,000 to qualify.
Now what if the home is $500,000 in the new guideless where this states certain
transactions can happen in relation to the $417,000 guideline.
The socialist intent has locked all those with one family homes over $417,000 out of
certain programs.
Hey one guy said: I brought my home that has 12 bedrooms but is a single-family home
back in 1999 the price is way over $417,000 I have equity and never used it.

Now 11 years later what can I do?

NOW WHAT?

By the way I have 8 children the oldest is 15.

So 12 bedrooms doesn’t seem as excessive.

But as I said in the beginning about what the reader may think.
Some might think this is excessive.
But did it seem excessive that he had a 12-bedroom home?

How about Him his wife, his Father, his disabled adult sister and the 8 kids all less than
15 years of age in a 12-bed room home?

How about him, his wife his Father his disabled adult sister and the 8 kids all under 15
years of age and the wife’s father and her two disabled brothers all in a 12 bed room
home?

Now we can start to feel better that after all, that the world has shown us through history,
as well as the extended education that many have, that it was OK for a man with 8 kids
with his wife to want each kid to have their own room?

What if it was an auction sale and at the time the house was too big so he got a good price
and that’s why he did not need any equity loans and he fixed some things up over the
years.
As we go further and further into what makes the guys story seem bad and unfair that is
the very same thing that many today are doing and not facing the fact that some are
turning into socialists with out even knowing.

It was the Sole business owner of the 1960’s who today could only make a living of great
wealth based on the liability made for him by the US Courts, by now lending his money
to those who could afford to pay for what they saw and thought they should have and 50
years later its simply a man with a big house that is too big for what we believe, with out
knowing him and his situation, what he should have.
That’s Called Socialism.
So we disenfranchised him from the set design of the social picture that has been created
maybe even for him personally and many may have blocked their true feelings out even
in reading the story?

Maybe you believe some one is watching you or can read your mind?

This is the paranoid delusion that often comes with socialism. A hidden enemy always
lives somewhere.
That’s why when you did get what you want, you were untrue and un feeling about others
and how they felt because it was a social dementia that has still not come to a point of a
cure that being a socialist encompasse in mental health.

The hard part is the United States Government has done us all the most miraculous favor
by defining this social behavior, setting guide lines and measures that we can judge by
mass social experiences and responses to what finance can only present as a cookie jar of
each fact to judge.
That many are so in vision to what ever it is socialism promises that as with most
socialists in this county and just about every other country you don’t stop until you have
lost every thing you had.

Those who today who may have no position in any of these facts because a few years ago
we were voted out as uncounted and un-listened too by the emerging socialistic trends.
Today have nothing but great admiration for the Governments of the world to sell a dollar
and not people and families to the socialist hidden regime.
A regime of those who speak and lead and decide, but the future is clouded because the
future plan is right before your eyes.
To have what you see some one else has.
Money of today has brought the definition of socialism to the table of the true meaning
and facts with out the blood shed and disparity that this of course brings to so many who
are innocent of doing anything but get blamed and those who do not yet understand.
The United Sates and many other first world nations have in a way saved us all by letting
the rich be thrifty and powerful by wanting to have power and a type of owner ship by
lending which is called investing.
The populations have wanted things that they could not afford or did not have the ability
to scrimp and save for by borrowing more then, not what they had but what they were
willing to pay back.
The developer caught on and he raised the interest, which rose the prices of property and
land and fulfilled empty purchases to buy more time so that those who could and would
and those who would not or could not to now just wait until its time.

When it comes time to actually pay the money back as the GSE better then anyone
thoroughly understands the business, the money game and the mind that lives with in. It
will be the developer and those who did not get the chance, but understood that will carry
out the final act as the socialist will be too far gone in their hidden cause which is really a
sickness to finish us all off.
Based on what the rich have allowed though their portfolios if it was not for GSE they
would have craped out already. They could not stop the temptation of what the nature of
wealth was to have the common man be little him or her. To go beyond what their jobs
and actually salaries could pay for nor do with out other things like Mercedes and BMW's
that sit in many of the drive ways of these new homeowners in hock brought on a
monthly payment of equity on a home they could barley afford.
The point is how many 3000 dollar payments will it take to get to $600,000 at 6.5%
Interest? It should be about 30 years at 12 months per year and one payment each month.
If we add now $700 for the BMW and the balloon payment on a lease and other charges
just to get another car. How many BMW’s will it take to keep you in one for 30 years?
Has the fellow who wrote this paper ever thought of calculating with his expertise if lease
expirations or the need for a new Mercedes has any thing to do with some defaults and
tell this to the CATO Community?
That is those who cannot afford the payment maybe the should ge
t a cheaper car or…
Well it is somewhat easy and very hard to say as we have gotten off point.
But as this paper said it will only get worse which for some is a true fact but only because
they just have not planned on really paying for that house for 30 years any way.
From what I have surmised if the old Uncle Sam is in the mortgage game this last round
is the last round and if on their last chance no matter what the interest rates go up to.
Uncle Sam knows how to get you out and believe me it is much cheaper to provide public
assistance for a family of 4 then to buy them a house and a brand new car every few
years.

Happy New Year 2010

http://www.cato.org/pubs/bp/bp106.pdf