Morehead: Bond Ponzi Scheme = Housing Bubble

Don’t shoot me, I’m just delivering the message. I’ll be getting back on my bicycle now and pedaling faster than the METAR crowd at a Josh Hawley 5K Run.

‘The biggest Ponzi scheme in history’: This CEO warns that the Fed’s strategy has created a big bubble in housing. Here’s what he likes for protection

Jing Pan
Mon, July 25, 2022 at 3:40 PM

But when you can borrow money at 2.68% to buy properties that are going up 20% in value per year on average, both homeowners and investors are going to go for it, explains Morehead.

“Over the past two years the Fed bought government and mortgage bonds equivalent to over 200% of all mortgage lending in the U.S.”

While that doesn’t match the exact definition of a Ponzi scheme, Morehead argues that the Fed’s easy money policies has created a huge housing bubble.


Morehead argues that the Fed’s easy money policies has created a huge housing bubble.

There’s been a 90-percent jump in foreclosures in the Bay Area since last year.…

And the SF Bay Area is well below the national numbers of foreclosures YOY. Much of the foreclosures are due to forbearance loan programs that banks offered during COVID. Now, banks are now requiring homeowners who were on these programs to come up with all the arrears from the forbearance period.
Most of these homeowners can’t re-fi their loans being 15months behind. Normally of you have a balloon payment coming up, you can simply re-fi.

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TB, if they are forced to come up with money owed which is in arrears, do you know if its a one-lump payment they owe, or can they stretch if over months like a mortgage? That’s something I haven’t seen addressed. Thanks for pointing it out.

This is a bank by bank prerogative, I know that US Bank is demanding balloon payments. I know that banks were very aggressive in offering forbearance programs to people who have mortgages. I have also read some of the stipulations of forbearance programs offered by banks and they are quite clear that they will demand money in full At the end of the forbearance period…
On the other hand I don’t think banks really want to get into the foreclosure market

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