Almost Every Mortgage Written Last Year Underwritten by US Government

Not much time to write this morning…gotta rush…

The Dow was up 9 points on Friday…following a week of big news.

Congress passed a bill permitting the US government to take over the health sector…about 17% of US GDP. Let’s see. The feds don’t have any money, right? They’ve got the biggest deficits ever, and will have to borrow $2.4 trillion this year just to keep the lights on.

And now comes news that Social Security has gone into deficit for the first time ever…and 7 years ahead of schedule.

The feds took over the mortgage finance industry last year. Practically every single mortgage written last year was underwritten by the US government.

And they took over the auto business too. They should be able to do for autos what they did for passenger trains. That is, they should turn Detroit into an Amtrak…which is to say, a Zombie City, if it isn’t one already.

Then, there was the bailout of Greece. And not only that…there was a weak auction of federal debt. A few years ago, any one of these bits of news could have walloped the stock market.

But investors didn’t seem to know what to do with the news. The Feds had taken over another big chunk of the economy. But what to make of it? Was that good news or bad news? The stock market seems unable to make up its mind. Finally, it ended the day with less than 10 points of movement.

Regards,

Bill Bonner
for Markets and Money

Bill Bonner

Bill Bonner

Since founding Agora Inc. in 1979, Bill Bonner has found success and garnered camaraderie in numerous communities and industries. A man of many talents, his entrepreneurial savvy, unique writings, philanthropic undertakings, and preservationist activities have all been recognized and awarded by some of America’s most respected authorities. Along with Addison Wiggin, his friend and colleague, Bill has written two New York Times best-selling books, Financial Reckoning Day and Empire of Debt. Both works have been critically acclaimed internationally. With political journalist Lila Rajiva, he wrote his third New York Times best-selling book, Mobs, Messiahs and Markets, which offers concrete advice on how to avoid the public spectacle of modern finance. Since 1999, Bill has been a daily contributor and the driving force behind Markets and Money.
Bill Bonner

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