These two whacky gentlemen make the case that government intervention distorts the free market process. In a normal setting, we wouldn't quarrel over an investor's decision to hold an asset until the market improves. He would certainly have the right, pursuing his own objectives, to hang onto a property indefinitely. And of course he alone would bear the market-risk, as well as the costs, of maintaining his property. But in the case of Government
Sponsored Owned Enterprise (G
SOE [govt now owns 80% of the company]) Fannie Mae, which, along with G
SOE Freddie Mac have received nearly $200 billion taxpayer dollars (a little more than the
president promised to spend to pack the government's freezers with meat), it's you and I who ultimately bear the costs of their collusion with the Fed to bolster the housing market.
As I preach, ad nauseam (read
Bailing Out thy Neighbor), when government intrudes, the pricing mechanism becomes distorted, and gluts remain - leaving the market to ultimately cure matters in a more painful (than otherwise might have been) fashion.
A good friend, more versed than me on the housing market, forwarded me this video:
Click here to view...
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