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Archive for November 15th, 2012

FHA to join Fannie and Freddie in conservatorship

Posted by Charles II on November 15, 2012

According to Bill McBride, the Federal Housing Authority is fundamentally insolvent, and will require a $16B bailout. This is based on a HUD report which has been taken down, perhaps due to early release, and reported in the Wall Street Journal.

This isn’t entirely unexpected. I mentioned the FHA as a possible casualty in January 2010. But this is going to substantially complicate the problem of reaching a fiscal deal, since it will have to be factored in in the middle of the craziness in Washington.

However, this is only notional insolvency, based on model projections and not a sum that has to be paid out, cash-on-the-barrel. Apparently the fact that house prices have stopped falling while foreclosures continue and interest rates continue to fall reduced the projected revenue stream enough to turn what looked like a surplus into a deficit. Expect Darrell Issa and John McCain to demand a Watergate-style commission. Back in Realityville, expect the taxpayers to have to pony up a couple of billion a year for the FHA to continue operations.
In the course of looking up the history, I am reminded of Bill McBride’s co-blogger Tanta (Doris Dungey), who died very young almost four years ago. Wherever you are, Tanta,

Posted in mortgage crisis | 1 Comment »

Papa John’s CEO Lied About Obamacare Cost

Posted by Phoenix Woman on November 15, 2012

In news that will shock nobody who isn’t a FOX News devotee, we find out that John Schnatter, Papa John’s CEO, lied about the cost of Obamacare — aka the Affordable Care Act — to his business:

Caleb Melby of Forbes has graciously done the math on Obamacare’s cost to Papa John’s and according to his analysis, to cover the cost of Obamacare, the pizza chain would have to raise prices by 3.4 to 4.6 cents per pie — way less than the 11 to 14 cents Schnatter claims he needs.

And there are other changes the chain could make to save some money, Melby notes, like not giving away 2 million pizzas for free at a cost of between $24 and $32 million to the company, for example.

(Read Melby’s full analysis here)

We’re guessing Obamacare won’t impact life at Schnatter’s lavish home, a 40,000 square-foot mansion in a tony suburb of Louisville, Kentucky, that features several swimming pools, a private golf course and a 22-car garage among other amenities, according to


Posted in Uncategorized | 8 Comments »

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