patrick.net

China does not plan to emulate U.S. GSEs

VENICE, Italy, March 23 (Reuters) -

China has no desire to create Freddie Mac (FRE.N: Quote, Profile, Research) or Fannie Mae (FNM.N: Quote, Profile, Research) style government sponsored enterprises (GSEs) to help develop its mortgage market, a former regulator of the two U.S. home funding companies said on Thursday.

"...The Chinese are adamant about having private sector mortgage lenders that are not reliant on government subsidies," the former regulator of the two U.S. government sponsored enterprises (GSE) told a bond conference in Italy.

Falcon said Freddie and Fannie were created during the Depression in the 1930s, and Americans are still living with their unintended consequences. "The unintended consequences are their portfolios create systemic risk to the financial system," Falcon told Reuters on the sidelines of the conference.

Freddie and Fannie hold a combined $1.4 trillion in mortgage portfolios. Senator Richard Shelby, a Republican from Alabama, along with the Federal Reserve and the White House argue that the portfolios pose a risk to the financial system of the world's largest economy by aggregating interest rate risk, and requiring the two listed companies to engage in extensive and complicated hedging."

Interesting... The Communist central government of China finds the GSEs too socialistic for its taste. The mortgage securities market of what is arguably the most advanced and successful capitalist nation in human history being indirectly critiqued by Communist apparatchiks for not being free market enough.

Wow... what to make of that?

What's next: Sudan criticizing our record on human rights? Saudi Arabia lecturing us on religious tolerance? Should I feel amused or embarrassed? Has Hell truly frozen over?*

Discuss, enjoy...
HARM

*Disclaimer: THOUGH I DISLIKE THE GSEs, IN NO WAY DO I FEEL THAT RED CHINA WITH ALL ITS ANTI-COMPETITIVE, ANTI-FREE MARKET CORRUPTION, GOVERNMENT MONOPOLIES, PROTECTIONISM, LACK OF RESPECT FOR HUMAN AND PROPERTY RIGHTS, ETC., ETC. IS IN ANY POSITION TO BE CRITICIZING THE U.S. NOR AM I ADVOCATING MODELING OUR HOUSING OR FINANCIAL MARKETS AFTER CHINA’S. I FOUND THEIR IMPLICIT CRITICISM TO BE HUGELY IRONIC, AND THEREFORE FUNNY AND WORTHY OF NOTICE.

#housing