Real estate -> territorial -> turf -> self-preservation -> wide knobby bike tires
Ok, so the timeline doesn’t work, but hear me out. I used to fix my own flat tires, now I rely on the bike shop so I don’t have to get dirty.
As I have mentioned on more than one occasion, government on a federal level seems unable to ease the credit/housing market pain. Congress can’t seem to move forward with housing relief in any meaningful way. The Federal Reserve missed the signs of growing housing stress and took action too little too late. The GSEs seemed to be part of the problem as enablers of poor lending practices (made painfully apparent with its agreement with NY AG Cuomo ).
GSEs Fannie Mae, Freddie Mac, plus FHA were designated as the housing saviors for Congress to rely on in the stimulous package. They’ve lost more than $15B in the past 6 months by my calculations and everyone is rooting for them.
On a monday, a comment by a Federal Reserve official  and a Lehman analyst  sent GSE stocks plummeting , an illustrating just how nervous investors are about the effectiveness of the GSEs role in all of this is.
Aside from letting time pass, I am fresh out of ideas, and I have resorted to incessant whining so watch out.
The problem is more complex than Congress can wrangle an effective compromise out of, and the OTS is still angry about the Cuomo deal with the GSEs.
It seems like a government solution’s time has passed.
On the bright side, the Tour de France , my all time favorite sporting event after March Madness, might have a prayer of being drug free this year or close to it. Of course, like housing, there is a turf war between the Tour de France and the International Cycling Union over their more stringent testing policy. Coincidentally, none of the usual cycling stars are in the race .
Perhaps an unknown, generic solution to housing may appear at some point. The current situation is over the heads (and handlebars (sorry)) of the usual government participants until they can get together.
UPDATE2: Mortgage Fears Send Global Shares Down [NYT]