Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Pastimes : Clown-Free Zone... sorry, no clowns allowed -- Ignore unavailable to you. Want to Upgrade?

To: pater tenebrarum who wrote (126908)	10/2/2001 3:29:14 PM
From: Box-By-The-Riviera™	Read Replies (1) \| Respond to of 436258

cycle high now? since we are gonna close higher

To: pater tenebrarum who wrote (126908)	10/2/2001 5:05:26 PM
From: Dr. Jeff	Read Replies (3) \| Respond to of 436258

Housing to Stay Strong - Fannie CEO Tuesday October 2 3:28 PM ET By Mark Felsenthal WASHINGTON (Reuters) - Low interest rates and continuing demand will keep the U.S. housing market strong in spite of an economic downturn worsened by the Sept. 11 attacks on New York and Washington, the chief executive of mortgage finance giant Fannie Mae said on Tuesday. While existing-home sales and other housing indicators are expected to fall in the wake of the attacks, home sales and building were at record or near-record levels before the attacks, Fannie Mae (NYSE:FNM - news) CEO Franklin Raines told Reuters in an interview. ``Even with the slowdown, they're objectively at very high levels,'' he said. In addition, home values have never declined and are expected to continue to rise, he said. DOUBLING OF INVESTMENT IN HOUSING As a result, the Washington-based mortgage finance company expects investment in housing to almost double or more over the next 10 years to between $21 trillion and $25 trillion from the current level of $11 trillion. Low interest rates -- the 30 year-fixed rate mortgage was at a national average of 6.72 percent last week -- should prompt a refinancing boom, Raines said. At the same time, Raines warned that too much stimulative action, such as Federal Reserve (news - web sites) rate cuts, could spark inflation fears in the bond markets and cause long-term interest rates to rise. ``If interest rates rise, you can negate the impact of the other stimulus, and you don't want to do that,'' said Raines, formerly director of the White House Office of Management and Budget in the Democratic administration of President Bill Clinton. In addition to the Fed's nine interest rate cuts since the beginning of the year, Congress agreed to a substantial tax cut and added spending in the wake of the Sept. 11 attacks, which destroyed New York's World Trade Center, seriously damaged the Pentagon (news - web sites) and left more than 5,700 people dead or missing. ``That's a lot of stimulus already in the system,'' Raines said. ``We just have to make sure we keep the right balance and don't cause inflation.'' HEARINGS MADE COMPANY STRONGER Political criticism leveled at Fannie Mae over the last two years has left the company and its federal regulator stronger, the Fannie CEO said. Fannie Mae and its cousin Freddie Mac (NYSE:FRE - news) faced criticism from members of Congress and financial services companies, who charged the two could pose a risk to taxpayers, were overstepping their congressional mandates, and were retaining too great a financial share of the advantages their government ties provide. But as a result of two years of close scrutiny, the two companies, also known as government-sponsored enterprises because they are congressionally chartered, are more open to scrutiny, have stronger federal regulatory oversight and have added buffers to shield them from financial shocks, Raines said. In addition, their financial regulator, the Office of Federal Housing Enterprise Oversight, has issued a financial safety test that was in the making for years. ``The world has moved on,'' he said. As a result of the expanded scrutiny it is now well-known that Fannie Mae is not guaranteed by the government, Raines said. Financial shocks following the Sept. 11 attacks and the 1998 Russian debt-default crisis have demonstrated that Fannie Mae acts to stabilize the system, he added. The two GSEs have multibillion-dollar lines of credit with the U.S. Treasury that they have never used. They also have tax and securities disclosure exemptions. At the same time, they are limited by their charter to the mortgage markets and are required to meet goals for financing home loans for low- and moderate-income buyers. ``Elected officials say the balance looks about right,'' Raines said. A proposal to give government mortgage finance arm Ginnie Mae the ability to back private low-down payment mortgages should be questioned, the Fannie Mae chief executive said. Scrutiny of the proposal, which has not been introduced in legislative form yet, should examine who would benefit from the change, whether it would expand the market for home loans, and whether the government would be assuming additional risk, he said. dailynews.yahoo.com