freakdog writes:
Someone forget to take their meds?
freakdog | 05.20.08 - 4:08 pm | #

Turbo writes:
http://biz.yahoo.com/rb/080520/ n...kcity_jobs.html

Speaking of jumbo mortgages, seems NYC didn't receive the memo that the recession is over.
Turbo | 05.20.08 - 4:11 pm | #

hittites writes:
It was impossible not to chuckle while reading this.
Such fractured tales must come from fractured minds with long tails.
hittites | 05.20.08 - 4:12 pm | #

Shocking writes:
Awesome. I like fairy tales......
Shocking | 05.20.08 - 4:16 pm | #

deuces wild writes:
Tanta, you're the best!
deuces wild | 05.20.08 - 4:16 pm | #

Ministry of Truth writes:
They sure do hire hacks for journalism these days. Thank god for blogs and people like you and CR.
Ministry of Truth | 05.20.08 - 4:20 pm | #

ac writes:

Political Pressure

The only reason to ease standards is public pressure: from Congress, from Fannie's friends in the housing industry and from homeowners' advocacy groups.

It would be one thing if Fannie were a private company and decided the potential return justified the additional risk. In that case, it would be an issue for the shareholders...

How far in the gutter does political pressure have to take our financial system?

What's especially interesting is this seems to be a case where the pressure is running counter to the will of the general public.

Is the whole country up for sale to the highest bidder?

ac | 05.20.08 - 4:20 pm | #

lb writes:
Am I the only person who is reminded of Fafblog in reading this post? (For the record, this is a compliment)
lb | 05.20.08 - 4:21 pm | #

Outsider writes:
No jumbos? How about jumbo pain relievers? That's a jumbo.
Outsider | 05.20.08 - 4:21 pm | #

trader walt writes:
Rocket J. Sqirrel is going to be angry with you, Tanta. Fractured fairy tales is a creation of his and Bullwinkle Moose.
trader walt | 05.20.08 - 4:22 pm | #

Rob Dawg writes:
Jeez, Tanta. If you read that carefully enough to show just how little she understands, I feel for you. I stopped after two paragraphs before I lost any more IQ points. Are financial reporters relitters who couldn't make the grade?
Rob Dawg | Homepage | 05.20.08 - 4:22 pm | #

quartz writes:
I liked the part at the end bout how the change was probably moot anyway because of MI. It had kinda of an Emily Latella ring to it.
quartz | 05.20.08 - 4:23 pm | #

Windowdog writes:
The true outrage here seems to be Fannie self insuring, or the Feds bailing out the insurers, thus essentially doing the same thing.

But she doesn't say that's what happened. I think the 97% thing is idiotic, but this article is so jumbled that you wonder if the editor called in sick maybe.
Windowdog | 05.20.08 - 4:26 pm | #

FFDIC writes:
Humpty Dumpty
Humpty Dumpty sat on a wall.
Humpty Dumpty had a great fall.
All the king's horses and all the king's men
Couldn't put Humpty together again.
http://en.wikipedia.org/wiki/Hum...i/ Humpty_Dumpty
FFDIC | 05.20.08 - 4:26 pm | #

Yal writes:
I am still waiting for some rational to TNX move today.

I expect TNX to be up unless inflation goes way way down and I don't see that.
Yal | 05.20.08 - 4:27 pm | #

Blitzer writes:
Isn't Caroline Baum Ben Steins daughter?
Blitzer | 05.20.08 - 4:28 pm | #

Turbo writes:
I don't know what there is to be outraged about...isn't private profit / public risk the new model for American business anyway?
Turbo | 05.20.08 - 4:29 pm | #

Windowdog writes:
How does PMI save the day anyways? You only have to pay for it for the first four years max, and even if it covers the gap up to 20%, it still doesn't make the 97% borrower a lower risk than he/she was when they walked in the door.

Ok I'm going to stop making my brain hurt over this.
Windowdog | 05.20.08 - 4:29 pm | #

Nemo writes:
Dammit if you don't get all the way to the end and there aren't any little lambs in it, either.
Nemo | Homepage | 05.20.08 - 4:30 pm | #

Anonymous writes:
Can't you friggn people just deal with the metaphorical nature of this and stop getting on her for being uninformed?
Anonymous | 05.20.08 - 4:35 pm | #

Tanta writes:
Am I the only person who is reminded of Fafblog in reading this post?

It is indeed a compliment and I blush modestly.

Actually, this is a style I perfected years ago when someone would ask me for a major memo dealing with a number of complicated issues, which I would work on for like weeks, and then send out to a bunch of people telling them we would meet to discuss in one week, and then we'd get to the meeting and they hadn't read it and they'd say like Tanta, why don't you just like summarize it for us and I'd say like OK it's like a memo and it starts out with this one sentence that is kind of awesome that says what the memo is about and then after that . . . until the little shits said, wait, how about we just read it right now instead of you summarizing it and I'd say cool I'll be getting myself some coffee while you're reading call me on my cell at Starbucks when you're done and after that people read shit I sent them.
Tanta | 05.20.08 - 4:36 pm | #

Emma Anne writes:
"and after that people read shit I sent them."

Awesome!
Emma Anne | 05.20.08 - 4:42 pm | #

Rob Dawg writes:
Anonymous writes:
Can't you friggn people just deal with the metaphorical nature of this and stop getting on her for being uninformed?
You mean the part about 'leave them alone and they'll come home?..."
Bad enough we've got a regulatory system unwilling to to their job but eager to do not their job now we have to set policy to conform to nursery rhymes.
Rob Dawg | Homepage | 05.20.08 - 4:43 pm | #

superduperdave writes:
Caroline Baum is often quite good. Maybe she had a bad day.
superduperdave | 05.20.08 - 4:44 pm | #

rich writes:
This is OT but pretty interesting.

I don't know if you're following the NexGen Brands story.

http://www.businessweek.com/ap/f...s/ D90ORUK03.htm

The real story here isn't the potential crash of this little public company.

It's the potential impact on local banks that have extended financing to marginal small-business franchisers across the country.

NextCen licenses 1,900 franchise operations across the country, a lot of them really marginal. The brands are The Athlete's Foot, Shoebox New York, Great American Cookies, MaggieMoo's, Marble Slab Creamery, Pretzel Time, and Pretzelmaker.

A lot of mall-based and consumer discretionary stuff that people don't need in a recession.

The company borrowed heavy to buy rights to franchises. Now, a lot of their franchisees must be folding or missing payments.

Franchising was how a lot of little entrepreneurs were going to get rich over the last decade. And they were helped by the fact that banks made it easy to borrow the start-up costs.

The individual franchisees could survive even if NexCen defaults and goes away. But it's not a good sign for thousands of marginal franchisees or their financiers.

A lot of marginal franchisees could go away and the country wouldn't hurt a bit. But the banks and mall owners will.
rich | 05.20.08 - 5:11 pm | #

Terry writes:
Tanta said: "Actually, this is a style I perfected years ago when someone would ask me for a major memo dealing with a number of complicated issues, which I would work on for like weeks, and then send out to a bunch of people telling them we would meet to discuss in one week, and then we'd get to the meeting and they hadn't read it and they'd say like Tanta, why don't you just like summarize it for us and I'd say like OK it's like a memo and it starts out with this one sentence that is kind of awesome that says what the memo is about and then after that . . . until the little shits said, wait, how about we just read it right now instead of you summarizing it and I'd say cool I'll be getting myself some coffee while you're reading call me on my cell at Starbucks when you're done and after that people read shit I sent them."

Some things are worth saving. I saved that.
Terry | 05.20.08 - 5:14 pm | #

Shnaps writes:
from the article: Mortgage insurers are reeling from losses and may not be willing or able to write insurance for loans with a 97 percent LTV in areas where home prices are declining. That could push Fannie to self-insure, raising the fee it charges for purchasing or guaranteeing mortgages, according to some housing analysts.

You see, Tanta, over in Faerie, housing analyst Mr.Loki pointed out to Carolyn that Oberon, former King of the Elves and newly appointed chief administrator of the new Fiefdom of OFHEOSOXley, had made this decree, and shit.
Shnaps | Homepage | 05.20.08 - 5:18 pm | #

Cal writes:
FYI, Dodd bill is out, changes here:

http://banking.senate.gov/ public...rsAmendment.pdf

and pre-hearing amendment here:
http://banking.senate.gov/ public...nttoGSEBill.pdf


Whole bill here:
http://banking.senate.gov/public...les/ GSEBill.pdf
Cal | 05.20.08 - 5:21 pm | #

dav writes:
From the Dodd-Shelby Amendment:

Establishes a licensing system for all loan originators to help standardize requirements for mortgage brokers and ensure that they meet minimum educational and performance standards.

Oh noes! Regulation and licensing!
dav | 05.20.08 - 5:29 pm | #

ed in texas writes:
Yeah, I read it and kept looking for the 'next page' link, then realized there wasn't one. I feel cheated... I was expecting, like, elephants.
ed in texas | 05.20.08 - 5:29 pm | #

Pubsec writes:
Tanta, I seriously wish I could buy you a drink. I like your style.
Pubsec | 05.20.08 - 5:33 pm | #

William Cargill writes:
Is Caroline Baum related to Frank Baum, the author of the Wizard of Oz?
William Cargill | 05.20.08 - 5:33 pm | #

RacerX writes:
That intro was pretty lame. Now if you replaced the kings and fairies with wizards and hobbits that might be worth reading.
RacerX | 05.20.08 - 5:34 pm | #

mal writes:
question:

When did "exercised" become a fashionable word to use for "upset"?

I never saw this word being used in this context until a few years ago; now everyone seems to use it.
mal | 05.20.08 - 5:39 pm | #

FT Woods writes:
It would have caught my attention if it'd been unicorns that poop butterflies.
FT Woods | 05.20.08 - 5:43 pm | #

dav writes:
Wow, I dug into the bill a little bit to see about that licensing requirement. Check this out:

SEC. 605. STATE LICENSE AND REGISTRATION APPLICATION AND ISSUANCE.
16 (a) BACKGROUND CHECKS.—In connection with an application to any State for licensing and registration as a State-licensed loan originator, the applicant shall, at a minimum, furnish to the Nationwide Mortgage Licensing System and Registry information concerning the applicant’s identity, including—
(1) fingerprints for submission to the Federal Bureau of Investigation, and any governmental agency or entity authorized to receive such information for a State and national criminal history background check
check; and
(2) personal history and experience, including authorization for the System to obtain—
(A) an independent credit report obtained from a consumer reporting agency described in section 603(p) of the Fair Credit Reporting Act; and
(B) information related to any administrative, civil or criminal findings by any governmental jurisdiction.

Nice. Plenty more there in the bill.
dav | 05.20.08 - 5:47 pm | #

Jillayne writes:
Hi Cal,

Thanks for the Dodd bill links.

Dav, I'm in WA State and we already do this for LO licensing, but only for LOs who work for a broker.

LOs who work for a bank, credit union, or consumer loan lender are exempt.

I'm going to dig into all 387 pages of this and find out if this will apply to all LOs.

Wait, 387 pages?
Jillayne | Homepage | 05.20.08 - 5:50 pm | #

Lawyerliz writes:
Really great.

Doesn't need unicorns pooping butterflies.
Lawyerliz | 05.20.08 - 5:55 pm | #

barely writes:
OT - Ownership society being financed by low cost rent assistance, and guess what! The NEW ownership society creates renters out of current owners, as they give up appreciation. Expect an increase in deferred maintenance so the prospects for appreciation go to zero! The 15% haircut got whittled back...

[As in the House measure, the Senate program would be voluntary. It would require that the new loan amount be no more than 90 percent of the home’s appraised value, and the new loan would have to provide a 30-year fixed-rate mortgage.

It also would require the homeowner to share any appreciation under the new loan with the government if the home is sold]

http://www.cqpolitics.com/wmspag...ws- 000002879319
barely | 05.20.08 - 6:00 pm | #

Rob Dawg writes:
Lawyerliz,
You don't get it.
We don't -need- unicorns pooping butterflies, we -want- unicorns pooping butterflies. That's the point.
Rob Dawg | Homepage | 05.20.08 - 6:02 pm | #

Jillayne writes:
on page 35 of the amendment bill, it appears that they are going to license all LOs. They have a very broad definition of what it means to be a loan originator.
Jillayne | Homepage | 05.20.08 - 6:10 pm | #

Alex Chekholko writes:
Tanta said: "Actually, this is a style I perfected years ago when someone would ask me for a major memo dealing with a number of complicated issues, which I would work on for like weeks, and then send out to a bunch of people telling them we would meet to discuss in one week, and then we'd get to the meeting and they hadn't read it and they'd say like Tanta, why don't you just like summarize it for us and I'd say like OK it's like a memo and it starts out with this one sentence that is kind of awesome that says what the memo is about and then after that . . . until the little shits said, wait, how about we just read it right now instead of you summarizing it and I'd say cool I'll be getting myself some coffee while you're reading call me on my cell at Starbucks when you're done and after that people read shit I sent them."

That's absolutely hilarious!

I have to admit that I had to look up what MMI was (muddled metaphor index), I only remembered it was something about mixing metaphors. Here's another Tanta classic from an MMI post:

"So it's a precipitous event that is also slow-motion, a chain-reaction like hitting one iceberg and almost going to the bottom but not quite and then sailing on for a while until you hit a different iceberg because after having hit the first iceberg you are still convinced that those little bitty chunks of ice floating on the waves don't have great big honkin' bergs under the surface because, like, how often does that happen?"
Alex Chekholko | Homepage | 05.20.08 - 6:13 pm | #

Broker writes:
Crazy scientists believe in perpetual motion.
Crazy liberals believe in GSEs.
Broker | 05.20.08 - 6:14 pm | #

blitzer writes:
Bitch, bitch, bitch...

All I ever read anymore is just bitching and complaining about shit that is mindless and out of context, OT and often just fluff which should be flushed down the toilet. However, some of the stuff in the sewer is just great!
blitzer | 05.20.08 - 6:41 pm | #

RE writes:
Software Developers Taking a Starting Salary Hit


"... Starting salaries for software developers and network and systems administrators have dipped by as much as $10,000 in May, according to JobFox, an employment firm.

Software designers and developers reported that though they'd been requesting a median salary range of $95,000 to $105,000 in April, this range had fallen to $85,000 to $95,000 in May. Networking professionals and systems administrators reported the same $10,000 drop, but with a bigger impact on their now $65,000 asking salary. ..."
RE | 05.20.08 - 6:41 pm | #

Blitzer writes:
Re: 37 Visitors Online

Back in The Great Depression, before George Bush, if you had a radio show with just 37 Visitors, the manager would go out on the street and look for some entertainment to lure on and bait people.

I think these low numbers just indicate that people are in transition and probably in the process of selling farms, looking for money and burned out on the same ol song of mortgage fraud, home bubble, economic decline, corruption, collusion, destruction of the middle class, inflation, recession, stagflation, pollution, global warming, crappy porno and all that other shit...

Maybe you guys just need to get some of those tap-dancing gif-logo-things that have a small yet clever Tanat/CR icon dancing across the stage with burning 100 dollar bills?
Blitzer | 05.20.08 - 6:51 pm | #

Billy Hill writes:
I'm not sure, but I think I saw "exercised" for "upset" in Jane Austen.

Are we going to have to add "picking on poor Caroline" to "picking on poor Gretchen"?
Billy Hill | 05.20.08 - 6:52 pm | #

Charles II writes:
Caroline Baum is the one who thinks that people who look askance at the liberties the Fed has taken with its charter are "the black helicopter crowd." She has such a thin skin that any gainsaying, no matter how diplomatically worded, gets the hot breath of her scorn.

Thanks for improving my day, Tanta.
Charles II | Homepage | 05.20.08 - 6:54 pm | #

Charles II writes:
Caroline Baum is the one who thinks that people who look askance at the liberties the Fed has taken with its charter are "the black helicopter crowd." She has such a thin skin that any gainsaying, no matter how diplomatically worded, gets the hot breath of her scorn.

Thanks for improving my day, Tanta.
Charles II | Homepage | 05.20.08 - 6:54 pm | #

fred writes:
Tanta: You can't criticize the writer of a piece for the headline (hed in journalism-ese). The hed is written by someone else. A journalist can complain about it (as they often do) but they have no power to change it.
fred | 05.20.08 - 7:25 pm | #

Tanta writes:
You can't criticize the writer of a piece for the headline

I can if I have read the entire piece and come to the conclusion that the story probably deserves that headline.
Tanta | 05.20.08 - 7:37 pm | #

OtherRouser writes:
"DU"? You mean Depleted Uranium? Wow that's pretty serious stuff!
OtherRouser | 05.20.08 - 8:04 pm | #

fred writes:
Tanta writes:

"I can if I have read the entire piece and come to the conclusion that the story probably deserves that headline."

That makes no sense in the context of what you originally wrote but, hey, it's your blog. You can display your ignorance in any way you like.
fred | 05.20.08 - 9:10 pm | #

mp writes:
Y'all, mp's here with a Hardy Howdy fer Tanta!
mp | 05.20.08 - 9:43 pm | #

Joy writes:
This piece needs the Fairy Blackstick. Badly.
Joy | Homepage | 05.20.08 - 10:00 pm | #

Zarley writes:
I have traded words w/ Caroline Baum in the past. She writes great articles. This was not one of them although the "Fannie Godmother" bit was kinda cute...

From a individuals perspective Fannie's move did not make sense. From a MACRO perspective it is very appropriate. Silly bloggers!!! Bone up on your economics!!! I'm talking about you Rob Dawg!!!

Silly bloggers. Go make some money!!!

There are some intense opportunities in buying distressed loans for pennies on the dollar and restructuring the debt and/or getting the people out and flipping the property. PennyMac has underestimated the servicing nightmare and there are not enough hedge funds and Wall St money to plug the hole.

PennyMac = Great White Shark

Zarley & Co. = Piranha (one of many small fish)

Great Whites live in the ocean, Piranhas in rivers...

California is about to be sold at a deep discount and then resold at prices affordable to the masses.

FHA loans anyone???

Wish me luck silly bloggers. Maybe I'll see you at the auctions. Don't bid to high now... Prices are coming down!!!

Been busy lately... You might not hear from me again but you probably will from time to time.
Zarley | 05.20.08 - 10:06 pm | #

Matt writes:
As a regular reader of Bloomberg, I have to say that this is a usual kind of thing for Caroline Baum. Not as much evidence and information as one would like and too much indignation.
Matt | 05.20.08 - 10:07 pm | #

John M writes:
OtherRouser -

For what it's worth, I noted that ominous expansion of DU and sent it on to Ms Baum a few hours ago. The actual expansion is "Desktop Underwriting." I proposed a better acronym would arise from "Desktop Underwriting / Housing."

Sorry about the shallowness. I'm visiting family in Montreal (and haven't even visited Desjardins HQ, which generated the smoking hole of world capitalism last August 12th).

Really OT: Doomer V sent along hints about "dark pools" about a month ago, and now this latest effort to turn the public stock exchanges into tar pits for retail investors is there for anyone who cares to search for the term under google news. I'm figuring this hedgie idiocy destroys the planet even before the GSEs buying mortgages with 3 percent down does.
John M | Homepage | 05.20.08 - 10:31 pm | #

Average Joe writes:
I guess I don't get it Tanta.

At least she sees an issue and is writing about it.

Seems a bit like getting volunteers to slay the dragon, and then making fun of the way they hold the sword.
Average Joe | 05.21.08 - 12:12 am | #

Tanta writes:
You can display your ignorance in any way you like.

I see that once again I am being too subtle for ya.

Baum gets through all that fairy tale setup silliness and quoting a bunch of uninformed sources (one an anonymous e-mailer!) and then concedes that none of it particularly matters if the mortgage insurers won't play. Then, to bail herself out of this Emily Latella moment, she suggests that Fannie will just "self-insure" these loans.

Fannie's (and Freddie's) federal charters explicitly do not allow them to "self-insure" loans with LTVs over 80%. The whole "rule" in the industry about loans with an LTV over 80% needing MI comes from this charter provision. It would indeed require an act of Congress to change their charter to allow this. It would be a fairly big deal, as deals go. We are certainly given the impression that Baum does not realize this; she seems to think Fannie could just up its loan-level fees a little and start quietly "self-insuring" and nobody would notice.

It may not be Baum's fault that this thing is titled Mary and the Jumbo, or whatever, but I can tell you it wouldn't make any more sense if it had been titled "Fannie Mae Likely To Stop Requiring Mortgage Insurance on High-LTV Loans."

Baum is free to go light into some copy-editor or whoever writes headlines at Bloomberg for giving her piece a stupid title. She is not, however, free to blame the headline writer for the stupidity in the essay. That's her lookout. The cruddy headline is just poetic justice in this case.
Tanta | 05.21.08 - 7:16 am | #

jim a writes:
Do you think that Fannie is relying upon the MI's unwillingness to insure 97% loans in falling markets? Kind of like making a big show of wanting to fight and relying on your friends to "hold you back?" Kind of "We're willing to save these borrowers but those evil insurerer are preventing us." (wink wink nudge nudge) IMHO in the current political climate this could backfire. Currently, Congress is running around randomly trying to "fix" the problem. If they become convinced that removing the requirement for MI is the answer...
jim a | 05.21.08 - 7:55 am | #

BigCat writes:
Just a nit: but Fannie Mae's charter doesn't allow them to self insure over 80%. Has to be MI or lender recourse/insurance.
BigCat | 05.21.08 - 8:43 am | #

grumpyoldvet writes:
Gotta agree with superdave above...Ms Baum is usually good but this piece looks like it was written by a 10 year old.....but I guess everyone is entitled to bad days.
grumpyoldvet | 05.21.08 - 10:04 am | #

linda writes:
K, I don't get why everyone's so worked up. Are you complaining the lede wasn't dry and dull enough? So she compared FNM to a fairy tale. It was actually pretty well done. Just because someone wants to write about finances in an unexpected style doesn't make them ignorant.

And she admits she doesn't know version 6.0 from version 7.0, not that she doesn't know what DU is. Are you saying you know different, that version 7.0 is the greatest thing since sliced bread and won't allow one bad loan to go through? Instead of mocking, cough up the information.
linda | 05.21.08 - 1:26 pm | #