I estimate that Fannie and Freddie alone are hiding $200 billion worth of bad loans on their books simply because there is no market for these foreclosed homes. Ditto for the largest servicer banks such as Wells Fargo, Bank of America, JPMorgan Chase and Citigroup. To clean up this mess with finality is going to cost $1 trillion or so in round numbers. But nobody in Washington wants to go there.
The Obama Administration and the Congress need to put aside their respective fantasy world views and focus on the horrible economic reality ongoing in the housing and banking sectors. It may be that the degree of self-delusion in Washington has reached the point that only another financial catastrophe can wake us from out collective distraction. But if President Obama really believes he can win reelection with housing prices falling from now till November 2012, then perhaps those who liken him to Louis XIV are right.
Kendall,
I never heard back from you, but I thought you should know that Dad is home from the hospital.
Louis 14 XIV or Louis 16 XVI?
“Louis XIV (5 September 1638 – 1 September 1715), known as the Sun King (French: le Roi Soleil), was King of France and of Navarre. His reign, from 1643 to his death in 1715, began at the age of four and lasted seventy-two years, three months, and eighteen days, and is one of the longest documented reigns of any European monarch.
Louis XVI (23 August 1754 – 21 January 1793) ruled as King of France and Navarre from 1774 until 1791, and then as King of the French from 1791 to 1792. Suspended and arrested as part of the insurrection of the 10th of August during the French Revolution, he was tried by the National Convention, found guilty of high treason, and executed by guillotine on 21 January 1793 as “Citoyen Louis Capet”. He is the only king of France ever to be executed. From Wikipedia.