Riddle me this. Bidenomics in action: Bidenettes just set up a program with Freddie Mac (to be followed by Fannie Mae) to provide guaranteed HELOCs to homeowners who don't want to refinance their first mortgages which carry lower rates. Not only a deja vu from 2008-2010 in terms of excess borrowing, and leveraging up a volatile asset, the impetus seems to be to provide more consumption capacity to consumers, as they are tapped out on income and savings. A way to keep the economy (over-)heated. Inflationary? Of course. But think of this another boost of helium in the bubble that will soon pop. Household debt is already approaching $16 trillion - given mortgages, auto, credit card/BNPL, and when added to corporate, muni and federal debt, we as a nation bypassed $60 trillion. And consider total savings across all of these - govvies, consumers and business - stands at under $5 trillion. I again state that "red is the new black", as borrowings have gone beyond an endemic stage; I do believe a waff of fatality is in the air. So our govvie leaders are inducing and incentivizing more borrowing to show economic progress??? To follow my earlier piece on AI & Religion, what the govvies are doing is literally sacrilegious.
Matt Venturi
5mo
Great observation Seve. It’s one further government agency initiative to affect the redistribution of ownership/wealth. This is a great opportunity for homeowners, only to potentially see the demise of their home equity with further dependency among those who become over-leveraged with minimal savings. This could represent a lot of Americans in the end.
“Of Service”
5moSteven Cinelli one wonders what would happen if all of those borrowers run out of equity?. Who would end up holding title to all of those assets? An interesting thought to ponder don’t you think?