Click here for the latest. Fannie will ask for $8.5 billion dollars more.
US real estate is dead as we have known it. Martin Armstrong is right, we are in a 26-year decline in real estate that began in 2007. If the banks actually took the cut instead of being bailed out at “market” price, we could probably cut that decline by two-thirds.
Fannie needs money because they are not putting half of the houses that should be foreclosed on….on the market. They are not putting them on the market because such a glut of housing hitting the market all at once would cause the rest of the real estate market to decline further.
A negative feed back loop that is trying to correct the imbalance from the 1990-2000′s. the gov is trying to slow that feed back loop way down. That means this decline in real estate will be with us longer than necessary.
This money is to help correct the negative cash flow Fannie Mae is experiencing while the decline in real estate is “managed” over the next 20 years.
Side musing: as seen in the comments, apparently another major reason for FM’s negative cash flow is the CEOs huge compensation packages. This is absurd, gg is waiting for the taxpayers revolt.