Last night, podcast #31 of Mom Talks Real Estate tested a new format. We went to a streaming live videocast in a talk show format. It was a surprise sneak preview to an audience of about 500.
The topic was the Sunday federal government takeover of Fannie Mae and Freddie Mac, including possible implications for the real estate market and homeowner/homebuyer.
After a brief overview, the audience questions came quickly. With so much audience involvement, we shortened the presentation to address related issues that the listeners wanted to discuss.
It may be posted as Podcast#31 (rather than video format) and I hope that by listening to it we all can judge the effectiveness of the test. During the talkshow, I thought we were jumping too quickly from topic to topic and opinion to opinion, but it was fun, and right or wrong, I was required to think and react immediately ”on my feet”.
If we do future videocasts or talk show formats, I know that we will improve.
After speaking live to a reactive world wide audience, I thought about what knowledge I gained from the participants. I gained a new mantra, which I will use to preface and frame all future discussions. It is:
Real Estate is a local phenomenon affected by personal, regional, national, cultural, geopolitical and often global events. No other product or service can be described this way.
As a result of yesterday’s “Sunday Save III,” I decided to publish my notes from episode 29. The last event did not make investors more confident in the long run. In fact, in the last two months, the stock market dropped considerably and FNMA and FMAC stock (and thus the investors) lost over 80 percent of their value. Today, their values dropped to the penny stock status. The stocks traded at about $30 in January, today less than $1.
Here are those notes: Remarks on the News….Another Sunday Save? 7/14/08
- Government support for an institution doesn’t necessarily build investor confidence…
- May further an investor pull out, on concerns of why the government is so concerned.
- Seems to have a political spin-“saving the future of homeownership”
Purpose of FNMA and FMAC
- Purchase home loans originated by banks and mortgage co, then package and sell as securities
- Provide continued liquidity in housing loans
Remember they borrow short term to give money for long term loans. Thus Federal Reserve agreed Sunday to loan these institutions billions of dollars at same rate as Wall Street Firms and banks.
Meanwhile, the SEC is trying to crack down on rumors regarding stocks, claiming that hedge funds or buy-out competitors rumors cause stocks to drop.
Define Hedge funds (FNMA and FMAC have acted like a hedge fund), and remember they win under all market conditions.
Maybe there should be greater emphasis on FHA (Federal Housing Administration) since loans are insured (Ins. Bought by borrowers)
Book of the week: “Escape” by Robert Tanenbaum created a scenario where a giant international hedge fund run by terrorists almost brought down the whole U.S. stock market.
Treasury secretary Paulson is working Sundays again to prop up another casualty in the mortgage crisis. This time he’s trying to save Fannie Mae and Freddie Mac.
Mom Talks Real Estate 29: Fannie Mae and Freddie Mac [25:29m]:
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