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Financial news I consider important, with my opinion, which is worth as much as you paid for it.
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Thursday, November 19, 2009

Federal Housing Authority must be abolished

I printed a while ago that the FHA is an abomination and must be closed. Let me expand upon this, ANY business that can be handled privately must be abolished.

The role of a government is to create rules to construct a society we want to live in. FHA is a black hole where trillions of tax dollars are used to subsidize houses people can't pay for.

Taxes in the next 2-4 years are going to skyrocket to levels people will not have believed possible. Federal, State, and local will try everything in their power to resist becomming efficient. A great way for a government to remain inefficient is to just raise more money to paper over inefficiencies.

Of course, no one will avoid this disaster, so instead, we must watch this train wreck in slow motion, until it comes to a head. Then, and only then, will agencies like FHA appear on the chopping block.

So much wealth will be lost in 401k savings, US dollar purchasing power, real estate collapse as houses drop further to pay for the real estate taxes.

But I digress, what I find refreshing is a private company that PROFITS from the existence.
Exerpt:

Yesterday’s subprime is today’s FHA,” Toll said today at a New York conference for builders sponsored by UBS AG. “It’s a definite train wreck and the flag will go up in the next couple of months: Bail us out. Give us more money.” Toll Brothers is the largest U.S. luxury homes builder.

The FHA’s insurance reserve ratio fell to 0.53 percent, the lowest level in history, and more steps are needed to shore up the agency that guarantees one of every five single family loans, Housing and Urban Development Secretary Shaun Donovan said Nov. 12.

Notice what I highlighted in bold? Of course every American is aware of this and all the other near calamity for the economy, since the news does such a great job in reporting what matters. Like the final 3 couples in Dancing with the stars.

UGH!

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