Archive for February, 2011

Life After Fannie and Freddie
February 16, 2011

There are many who believe that Fannie and Freddie’s days are numbered.  I, for one, hope they are.  In the short-term, a mortgage market without Fannie and Freddie means that buying a home will likely become more expensive as interest rates will increase along with down payment requirements.  Life without Fannie and Freddie also means the secondary market will be less influenced by the federal government and lobbyist and can, as a result, become more competitive, opening the way for alternative forms of home finance.  Of course, this transition will take time and FHA will need to remain in place to help lower-income buyers, but the transition away from Fannie and Freddie is long overdue.  In the long run, a mortgage market with fewer federal subsidies and lobbying is a good thing for the real estate market.  Currently, Fannie and Freddie own or guarantee 40%, approximately $1.4 trillion, of all mortgages in the USA and this number is rising daily.  Many wonder who will take their place.  Once Fannie and Freddie are out of the picture and the competitive advantage they have enjoyed for decades is removed, private capital will step up.  Wall street will be busier than ever before, securitizing mortgages and selling CDOs to investors.  All the blame for the real estate crisis can’t be heaped upon Fannie and Freddie as private mortgage financing played a huge role in the crisis, but government sponsored entities such as Fannie and Freddie don’t represent true capitalistic enterprises and are a serious burden to taxpayers.  Furthermore, the real estate market can survive and prosper in the future without the government sponsored entities we call Fannie and Freddie.  Other countries have successful real estate markets without such organizations.  Although it won’t be easy and will require tremendous political will, a post-Fannie/Freddie world looks brighter to me than the status quo.

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Life After the Super Bowl for DFW
February 9, 2011

Is there life after the Super Bowl for DFW?  Sure there is but not according to the national and local media.  According to many in the media, DFW should say goodbye to any hopes of another Super Bowl.  Hopefully, that’s not the case, but I fear for what this might mean for DFW’s chances of securing other big events.  Super Bowl 45 should, therefore, be the wake-up call we need to address the real problems in DFW like the traffic and transit issues if we want to contend for major venues such as the Super Bowl, the World Cup, and the Olympics.  After all, we can’t control the weather but we can confront other issues.  Super Bowl 45 has been labeled a “nightmare” and a “debacle” in the press.  Of course, the media blows most everything out of proportion.  Truth is bad luck and Mother Nature are mostly to blame, but the real truth is that N. Texas just doesn’t cope well with bad weather.  Two local events, Mayfest and the Stock Show, can provide testimonials that crazy weather in N. Texas is a fact of life around here.  Last week’s storm may have been worse than usual but it was not a fluke.  Truth is, everyone in N. Texas just loves a snow day, and this year they just happened to coincide with the Super Bowl!  It goes to show that thousands of kids praying for snow and ice are even more influential than Jerry Jones – better luck next time!  Maybe the 2020 Summer Olympics?