Cartoon: The Great Cycle of Wall Street

3 Responses to Cartoon: The Great Cycle of Wall Street

1. 1

   RonF says:

   June 25, 2009 at 2:09 pm

   Looks like Congress wants to take over the juggling act:

   From Reuters at http://www.reuters.com/article/GCA-Housing/idUSTRE55L39120090622 :

   In March, Fannie Mae said it would no longer guarantee mortgages on condos in buildings where fewer than 70 percent of the units have been sold, up from 51 percent, the paper said. Freddie Mac is due to implement similar policies next month, the paper said.

   In a letter to the CEO’s of both companies, Representatives Barney Frank, the chairman of the House Financial Services Committee, and Anthony Weiner warned that a 70 percent sales threshold “may be too onerous” and could lead condo buyers to shun new developments, according to the paper.

   The legislators asked the companies to “make appropriate adjustments” to their underwriting standards for condos, the paper added.

   In an interview with the paper, Weiner said the rules have “had a real chill on the ability to get these condos sold,” at a time when prices of condos have fallen enough to attract potential buyers.

   In addition to the 70 percent sales threshold, Fannie Mae will also not purchase mortgages in buildings where 15 percent of owners are delinquent on condo association dues or where one owner has more than 10 percent of units, as the firm sees these as signals that a building could run into financial trouble, the paper added.

   Both Fannie and Freddie are preparing a response to the lawmakers, according to the paper.

   Here’s what I’d like to see in that response:

   Dear Reps. Frank and Weiner:

   In response to your request we have created a new security bacled by mortgages for condominium developments that have less than a 70% sales threshold. We will release them for sale to the general public as soon as the two of you have converted your entire life savings and investment portfolios to purchase them and placed them in a blind trust that will not change them.

   Sincerely,

   Freddy Mac and Fannie Mae
2. 2

   Lilian Nattel says:

   June 25, 2009 at 4:02 pm

   Great cartoon!
3. 3

   Raznor says:

   June 25, 2009 at 6:21 pm

   I love it. The monster is a hilarious creation.