bostonbubble.com

[Hank]

Our favorite Rep. is in the headlines again.
Housing: Frank talk from Barney Frank

And the Economist has a nice write up on Japan's stagnation and what it means to the US as we enter a similar state.
Lessons from a “lost decade”

[Renting in Mass]

Thanks for the link.

Let's talk about this quote:

Q. Why should responsible homeowners be forced to spend even a nickel of their tax dollars giving irresponsible borrowers a break on their mortgages?

A. Here's why: Foreclosures do damage in concentric circles. The pain hits hardest on the people whose houses foreclose, but it also hits the entire neighborhood. If you're a hard-working person making your mortgage payments and people around you are getting foreclosed, then your neighborhood starts to deteriorate.

The value of your home falls, and the entire city suffers because homes that used to generate property taxes are now eating up tax dollars. And when that happens, the whole economy suffers. So doing something about foreclosures helps the broader economy, not just the individual.

What if you're a hard working person who has been renting and saving money and would like to buy an affordable house? Oh, sorry, you get screwed!

Does a foreclosed house really eat tax dollars? Sure, it's value goes down (and less taxes are collected), but it's not like it starts generating negative tax dollars. And doesn't the same thing happen when prices fall, regardless of whether there was a foreclosure?

This quote also bothers me:

I believe Fannie and Freddie are better off than the market thinks. Over the long term the market is a very rational distributor of resources, but in the short term it can fall prey to hysteria. Sometimes you need to deal with that.

Part of the problem is rumormongering by short-sellers

Right, hysteria and short sellers are the root of the problems with Freddie and Fannie. You really have to have disdain for the public to say something like that and expect people to believe it.