Here's another (hilarious) take on that same item, from "Mark-to-Market" on capitalstool.com:
capitalstool.com
Everybody knows how the guys go out at night in search of someone like Katrina on “The Apprentice”. A tall, exotic, thin, Large Breasted Wonder with long, straight hair.
The crowd is worked, rejections pile up. And of course, as the night wears on, standards are reduced.
By 2:00am, the Bottom of the Barrel girls are rounded up. Whatever it takes not to go home empty handed.
As usual, Wall Struck is no different.
As shown repeatedly with graphs posted on various financial sites, the Credit Growth Curve is going Parabolic. The only way to sustain such momentum is to rapidly dig up the most marginal borrowers and get them to sign up and borrow some money. Loans later to be recycled and turned into AAA-Rated Exotica found on your Money Market Fund Prospectus.
And of course, the most high powered money is originated from the loans with the longest duration, such as 30-year mortgages.
As of today, anybody and everybody making over $150,000 a year is now in a $1.5 million McMansion with a $1.2 million mortgage.
As of today, anybody and everybody making over $75,000 a year has a $500,000 interest-only mortgage with payments of $1,800/mo.
As of today, anybody and everybody who is a self employed illegal alien who hasn’t filed a tax return is able to get a “stated income” loan and buy a $350,000 starter home from Ryland.
As of today, anybody and everybody who resembles the 22-years old misfit, who plays in a rock band, has terrible credit, cannot round up first and last months rent for an apartment, has been pushed into a $240,000 condo with nothing down.
By now, it seems that most everybody has been sucked into the Credit Vortex, feeding up river like a Circuit Cable, with all tributaries eventually leading to the Intake Port of the Atomic Particle Accelerator, aka known as the Structured Finance Feeder Mechanism for the John Law II HedgeFund.
But there is one stone left unturned.
The Bottom of the Barrel.
The Cross-Eyed, Cross-Breeded, Moonshiner crowd. The hillbillies, drunks, the illiterate, the unemployable who live in the mountains, swamps, deserts, and by the railroad tracks.
They can’t afford a house.
They can’t afford a condo.
They can’t afford an apartment.
But they can afford a Trailer Home.
Fresh off the press:
Fannie Mae, Lenders Aim to Revive US Mobile Homes
NEW YORK , Feb 10 (Reuters) - Fannie Mae (FNM) and a consortium of lenders aim to revive a U.S. manufactured housing industry that has been battered in recent years by high loan defaults and a bloated inventory of repossessed homes.
"We want to strengthen the market for manufactured housing financing, and eliminate predatory and anti-consumer features that have contributed to instability in the marketplace over time," Fannie Mae Chairman and Chief Executive Officer Franklin Raines said on Tuesday in a statement.
Fannie Mae, the biggest buyer of U.S. home loans, and the lending group will make it more affordable to get a mortgage to buy a manufactured home, the company said. A consumer could get 30-year financing for such a home with down payments as low as 5 percent.
Manufactured housing encompasses modular, mobile and other types of prefabricated homes. Because their cost is low compared with standard housing, they tend to attract elderly and low-income buyers. These buyers tend be riskier borrowers because of their limited income.
Local banks and finance companies will screen borrowers and make the loans.
Fannie Mae will purchase the loans from the lenders.
Further, Fannie Mae said it plans to work with its lender partners over the next year to develop a pilot program to save consumers at least 10 percent of the cost of buying and financing a manufactured home."
………………………..
Notice how FNM is trading at a 52-week high. Franklin “Mr. Potato Head” Raines is desperate to get some new loan volume going to jam his stock to all time highs. Unfortunately, FNM is still choking on mountains of Conseco manufactured housing paper. So he sent his Lobbying Machine to the right places and greased the skids to allow FNM to buy even more “new” manufactured housing paper so the company could achieve growth rates which would allow it to “outrun” its spiraling credit losses on the Conseco garbage heap.
The market responded favorably.
Champion Enterprises (CHB) and Fleetwood Enterprises (FLE) exploded to new highs on huge volume, anticipating a new boom in manufactured housing sales to the Hillbilly crowd.
After all, how could these two manufacturers lose? They have just been guaranteed to be paid for their product by Fannie Mae, which has the Full Faith and Credit of the John Law II HedgeFund, which in turn is fully backstopped by the U.S. Treasury Department and the tax collection power of the Internal Revenue Service.
Essentially, CHB and FLE have been just issued a license to print money.
Imagine this. A cross-eyed dude with an IQ of 81 selling used car parts out of his back yard by day and selling moonshine by night, able to buy a brand new double wide trailer home with 5% down and a 30-year mortgage. The guy has no education, no credit record, hasn’t filed a tax return, and probably pays $20/mo. child support to each of his 15 female cousins.
What are the odds that this guy makes 360 payments on time?
What are the odds that this trailer home isn’t wiped out by a mudslide or a tornado in 10 years?
What are the odds that this trailer home will be stench free after even 5 years?
What are the odds that this guy doesn’t lose his temper and punch a hole through the wall after 1 year?
What are the odds that when a payment is missed, the collector will be able to find a working phone number?
It doesn’t matter.
CHB and FLE will get a check for the purchase price, plus sales tax, plus closing costs, plus delivery, thanks to Franklin Raines.
Look for the following securities upcoming in your money market prospectus:
- Ex-Con Housing Shelter Receivables Unit III
- Tornado Alley Sardine Can Receivables Series IV
- HUV “Home Utility Vehicle” Moonshine Master Trust IIa
- Oscar Meyer “Weimar” Housing Portfolio Pool VI |
