S&P Homebuilder ETF (XHB) vs. the S&P
“Our economy isn’t going to recover until the housing market finds its footing” ~ Mark Zandi
By Catherine Austin Fitts
I can not help but notice some unusual patterns in housing policy these days. Let’s look at some of the dots worth connecting.
The folks watching the southern US borders are appalled at the number of people streaming across. See our Solari Report interview, Border Wars with Zack Taylor. It is not to be missed.
Now we have a report claiming that the Obama Administration is planning on organizing large numbers of immigrants in designated cities who will receive the government support needed to make a successful transition, including housing. (See: Breaking…WH Plans to Develop a “Country Within a Country” of 15 Million “New Americans”)
The Administration is currently in court trying to get its executive orders giving residency to 4 million immigrants.
(See: Legal Experts: Texas Court Immigration Ruling May Be Hard to Challenge) At the same time, the Administration has proposed a significant increase in the HUD budget for next year. Reading between the lines it looks to me like lots of resources that could be used to accomplish significant first time home buying in the immigrant population: President’s FY2016 HUD budget asks for $49.3B
At the same time, FHA is lowering its mortgage insurance premiums by a third – that is a big drop.( See: FHA to lower insurance premiums on mortgages)
Freddie and Fannie are also lowering down payment requirements from 5% to 3%. (See: Fannie Mae, Freddie Mac offer lower mortgage down payments)
Meantime, reports in the markets are that first time home buying will be rising this year, kickstarting the bottom up cascade that revives the housing market. Homeowners at the lower end sell to first time homebuyers, and then proceed to trade up to a bigger, or more expensive home.
So what does this add up to? Looks like voter creation may be at work. We are coming into a Presidential election in 2016. Is the Administration planning on using FHA, Freddie and Fannie to create lots of loyal new Democrats and please the homebuilders, relators and mortgage bankers while telling the world that the US economy is thriving?
Is this a plan to beat a Jeb Bush candidacy and put Clinton in the White House? After all, the Clintons and the Bushes along with half of the country have been playing “juice the mortgage market” for decades.
The Republicans action on the HUD budget this year will be telling. A housing recovery has lots of bipartisan support. So does building out the investment networks into Mexico and Latin America – no doubt this new influx is part of a much bigger North America trade deal.
Let’s keep an eye out for more dots and see what patterns emerge.
In the meantime, if you lost your home to foreclosure and a big investor or bank made money picking it up cheap, prepare yourself for the flood of new housing subsidies that may be showered on those around you, including new comers.
You lost your home because you did not see the game. Hopefully, you will see the game this time, and get ahead of it.
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