Althouse: Businessweek "Warns That Minorities May Be Buying Houses Again."

February 28, 2013

Businessweek "Warns That Minorities May Be Buying Houses Again."

Horrendous magazine cover for which they've issued a sorry-if-you-were-offended apology.

209 comments:

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Anonymous said...: It might help ;); 3/1/13, 12:29 AM
vbspurs said...: I take the opportunity to speak more personally, now that we are over the 200 post hump.

Hi William, thanks for your kind words! Alas, this was just a flying visit.

Remember guys, I am still (sadly) in mourning, and not up to daily commenting as yet. But I may pass by here more often, because I miss you more than words can express. :)

Cheers,
Victoria; 3/1/13, 3:44 AM
AlanKH said...: For those of y'all who keep running into folks who try to blame the crisis on Glass-Steagall repeal, here's some ammo (emphasis added):

"Its prohibition on banks having securities affiliates had nothing to do with mortgage securitization. Banks had been selling off their mortgages for decades before the law’s repeal. In fact, Fannie Mae was created in 1938 with the express purpose of buying mortgages from banks, so there would be more liquidity in the housing market.

"Rather, what Glass-Steagall restricted was the services, such as investment and insurance, that bank holding companies could provide to their customers. Gramm-Leach-Bliley permitted banking firms to once again offer these services for their customers..."

http://www.nationalreview.com/corner/259815/memo-col-west-beware-glass-steagall-john-berlau

Restricting the number of financial markets that financial institutions impedes the ability to properly diversify. This was painfully demonstrated by the S&L crisis - S&L's got into trouble when they put too many eggs in the real estate basket, one of the few financial markets they were legally allowed to enter.; 3/1/13, 4:38 AM
Rusty said...: A little more perspective on the mortgage situation.

Government regulations precluded Fannie and Freddie from buying mortgages that didn't meet downpayment and credit requirements. However, as the mortgage market changed, so did their business. Between 2005-2007, few of the mortgages acquired were conventional,fixed-interest loans with 20% down. Fannie Mae's loan acquisitions were:

62% negative amortization
84% interest only
58% subprime
62% required less than 10% downpayment.
Freddie Mac's loans were even more risky, consisting of:
72% negative amortization
97% interest only
67% subprime
68% required less than 10% downpayment.
It was the preponderance of exotic loans in addition to subprime borrowers that made Fannie and Freddie's loan acquisitions so toxic.

Combined with the fact that congress authorized an act that would force banks to make marginal loans or face charges of redlining-See Liberty Savings and Loan-and possibly audits.
You come up with a situation where the most exposed entities try their hardest to minimize their exposure.Mortgage companies, seeing their opportunity jumped in. Collecting their fees up front and bundling good and bad mortgages in the hopes of minimizing risk. Anyway. Fannie and Freddie would take up the slack. Tears were the result.
Bush warned Freddie and Fanny 10 times that they were flirting with disaster, but they kept on guaranteeing iffy loans.
The housing bubble is what happens when you let the government get between the buyer and seller.; 3/1/13, 7:20 AM
Freeman Hunt said...: Why defend this cover? It's so so bad.; 3/1/13, 7:22 AM
Cody Jarrett said...: Why is it bad, Freeman? What specifically is bad?

See, if people are people are people, black white brown yellow red, and no one would say anything if it was drawn with a white family instead of a brown family, why not use the brown family?

If anything, it should be celebrated. We've come a long way baby and all that.

People are only equal, society is only color blind, if we can all make fun of each other.; 3/1/13, 7:39 AM
Rusty said...: Freeman Hunt said...
Why defend this cover? It's so so bad.

Crappy art?; 3/1/13, 8:12 AM
William said...: @vicky: I'm sorry for your loss and hope things get better. At any rate, here on the internet we're all ghosts, and we can come and go without causing each other much grief or harm.; 3/1/13, 10:45 AM
Unknown said...: Buying and selling of Houses is not an easy task,It is one of them Laborious task to get a positive response .There are many service provider who provide the services of Guiding the user to get the best Deal.One of them is Burnaby Property Agent.; 3/18/13, 2:25 AM