Æлена (barskaya) wrote,
Æлена
barskaya

Новые правила ипотеки

Федералы водят новые правила выдачи ипотечных кредитов, для защиты потребителей:

1. Запрещают выдавать кредиты на большую сумму если у покупателя нету возможности платить по нему из заработка или ассетов не связаных с equity в уже имеющейся недвижимоcти. (досвиданье спекулянты)

2. Wall-стритовцы могут показать как доход лишь 20-30% своих ожидаемых бонусов (как известно основной доход составляли бонусы выдающеся в конце года, а базовая зарплата была довольно скромной). Если учесть, что wall-стритовцы представляли собой примерно 33% покупателей недвижимости Манхаттана, то цены начнут падать. Хотя может и не так круто, ибо всегда имеется возможность перейти в разряд рентуемых.

3. Если wall-стритовцы не смогут инициировать сaб-прaйм и Alt-A кредиты без проверки дохода и ассетов и не смогут перепаковывать их с Triple-A рейтингом - с чего они собираются получать свои непристойные бонусы? Т.е leverage которая загнала маркет на сумасшедшие высоты исчезла. 

4. Многие банки прекращают работать с ипотечными брокерами.


***

The top five foreign holders of Freddie and Fannie long-term debt are Japan, China, the Cayman Islands, Luxembourg, and Belgium. In total, foreign investors hold over $1.3 trillion in these agency bonds, according to the U.S. Treasury's most recent "Report on Foreign Portfolio Holdings of U.S. Securities."

The prospectus for every GSE bond clearly states that it is NOT backed by the United States government. That's why investors holding agency bonds already receive a significant risk premium over Treasuries (around 100 basis points).

A bailout at this stage would be the worst possible outcome for American taxpayers and mortgage holders, who have been paying a risk premium to these foreign investors. It would change the rules of the game retroactively and would directly subsidize the risks taken by sophisticated foreign investors.

A bailout of GSE bondholders would be perhaps the greatest taxpayer rip-off in American history. There is $376 Billion in Chinese Agency Bond Holdings Subject to Taxpayer Bailout Proposals.

If China and Japan were dumb enough to invest in US agencies (and they were), then China and Japan should suffer the consequences, not US taxpayers.

CayMan and Luxembourg are tax havens for Hedge Funds, so in the end, the rich get to make money during the bubble buildup, and when it pops, well, then the taxpayers step in and clean up the mess while the rich go off and party with their billions.

It's how the rich get richer and the poor get poorer in this country silly.

***

There are options besides a full head-on bailouts as Roubini has astutely delineated on his blog:

"Of course most of Wall Street, domestic and foreign investors and Congress are already screaming and begging “Bail us out, bail us out!” as their $5 trillion holdings of agency debt will take a significant hit if the insolvency hole of the GSEs – after the shareholders are wiped out – is filled not with public bailout money but rather with an haircut on the bonds held by Fannie and Freddie creditors. On top of bondholders not wanting to take a hit almost every politician – including McCain that in a former life was one of the shamed and corrupt members of the Keating Five club when he facilitated the S&L scam – is now clamoring for a bailout of Fannie and Freddie under the argument that not rescuing them would lead to a collapse of the mortgage and housing markets. But these screams of “the sky will fall” if we don’t rescue Fannie and Freddie are vastly exaggerated and incorrect for a number of reasons.

First, notice that the hit that bondholders will take will be limited in the absence of their bailout. With a debt/liabilities of about $5 trillion and expected insolvency – as of now and in the worst scenario of $200 to $300 billion – the necessary haircut is relatively modest: either a reduction in the face value of the claims of the order of 5% (if the mid-point hole is $250 billion) or – for unchanged face value – a very modest reduction in the interest rate on their debt after it has been forcibly restructured.

Second, a 5% haircut is much smaller than the 75% haircut that the holders of Argentine sovereign bonds suffered in 2001-2005, much smaller than the haircuts that holders or Russian and Ecuadorean debt suffered after those sovereign defaults, and much smaller than the 30% haircut that holders of corporate bonds suffer on average when a corporation goes into Chapter 11 and its debt is restructured. So why should Uncle Sam – i.e. eventually the U.S. taxpayer – pay that $250 billion bill when investors in the U.S. and around the world can afford it? The same investors are getting a fat subsidy of $50 billion a year (whose NPV is much bigger than $250 billion) for holding claims that now provide a 100bps spread above Treasuries and are under the implicit guarantee of a full bailout.

Third, of the two options we need to pick one: either we formally guarantee those claims and start paying the Treasury yield on that debt saving the tax payer that $50 billion subsidy; or if we maintain the subsidy a credit event in the form of a small haircut because of insolvency would be the fair cost that such investors pay for earning the extra spread over Treasuries.

Fourth, while the haircut would reduce the market value of such agency debt and inflict mark to market losses to investors such losses are already priced by the fact that the widening of the agency debt spread relative to Treasuries – from 10bps to about 100bps – has reduced the mark to market value of such agency debt. So, in the current legal limbo of insolvent GSEs whose debt is however not formally guaranteed the persistence of the spread would lead to those $250 billion mark-to-market losses regardless of a formal default, restructuring and haircut on that debt. We may as well resolve that insolvency and restore the positive net worth of the GSEs by doing the haircut.

Fifth, a haircut on the debt of the GSEs does not need to destroy their business, the mortgage market or the housing market. The best debtor is a solvent debtor that has restructured and reduced its unsustainable debt burden: that is why firms coming out of a Chapter 11 process that reduces their debt burdens are viable businesses ready again to produce goods and services in a viable and profitable way. The worst thing that can happen to the GSEs is to remain as zombie comatose insolvent institutions whose debt burden is not restructured and who are barely propped by an implicit government lifeline. Do we really believe that GSEs with unrestructured debt kept alive in a zombie government “conservatorship” (the solution now most likely preferred by the U.S. administration) could function properly and continue their service of supporting the mortgage and housing market? Lets instead clean them up first and make them financially viable – after an out-of-court Chapter 11 style debt reduction – so as to ensure that they keep on providing the public goods that they are alleged to give.

Sixth, the existence of GSEs and the implicit subsidy that they provide to the housing sector and mortgage market is a major part of the overall U.S. subsidization of housing capital that will eventually lead to the bankruptcy of the U.S. economy. For the last 70 years investment in housing – the most unproductive form of accumulation of capital – has been heavily subsidized in 100 different ways in the U.S.: tax benefits, tax-deductibility of interest on mortgages, use of the FHA, massive role of Fannie and Freddie, role of the Federal Home Loan Bank system, and a host of other legislative and regulatory measures.

The reality is that the U.S. has invested too much – especially in the last eight years – in building its stock of wasteful housing capital (whose effect on the productivity of labor is zero) and has not invested enough in the accumulation of productive physical capital (equipment, machinery, etc.) that leads to an increase in the productivity of labor and increases long run economic growth. This financial crisis is a crisis of accumulation of too much debt – by the household sector, the government and the country – to finance the accumulation of the most useless and unproductive form of capital, housing, that provides only housing services to consumers and has zippo effect on the productivity of labor. So enough of subsidizing the accumulation of even bigger MacMansions through the tax system and the GSEs.

And these MacMansions and the broader sprawl of suburbian/exurban housing are now worth much less – in NPV terms – not only because of the housing bust and the fall in home prices but also because: a) the high oil and energy prices makes it outrageously expensive to heat those excessively big homes; b) households living in suburbian and exurban homes that are far from centers of work, business and production that are not served by public transportation are burdened with transportation costs that are becoming unsustainable given the high price of gasoline. So on top of the housing bust that will reduce home values by an average of 30% relative to peak high oil/energy prices make the same large homes in the far boonies of suburbia/exurbia worth even less – probably another 10% down – because of the cost of heating palatial MacMansions and because of the cost of traveling dozens of miles to get to work in gas guzzling SUVs. Thus, it is time to stop this destruction of national income and wealth that a cockamamie decades long policy of subsidizing the accumulation of wasteful and unproductive housing capital has caused."




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