I just around to reading this article from Christmas Day in that Fannie and Freddie will have an unlimited amount of funny money for the next 3 years from the treasury. LINK
I think the gov now own's 90+% of mortgages. There aren't any private sector lenders left. What is the point of doing this? Why is wrong with housing prices dropping to what the free market wants to pay for them? If I were to buy a home, I want to save my money first at a significantly higher rate and then pay for most of the house outright. Right now, I am being punished to save my US dollars.
What is fishy about this story is the deal was announced when the stock and bond markets and futures were closed and everyone is out eating Christmas Eve dinner, shopping etc. I guess people have short term memory since there was not a major sell off that Monday. We shall see when the volume and traders come back in the next 2 weeks.
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