Fannie Mae, Freddie Mac Ordered To Consider Crypto As an Asset When Buying Mortgages 102
An anonymous reader quotes a report from the Associated Press: The head of the federal government agency that oversees Fannie Mae and Freddie Mac wants the mortgage giants to consider accepting a homebuyer's cryptocurrency holdings in their criteria for buying mortgages from banks. William Pulte, director of the Federal Housing Finance Agency, which oversees Fannie and Freddie, ordered the agencies Wednesday to prepare a proposal for consideration of crypto as an asset for reserves when they assess risks in single-family home loans.
Pulte also instructed the agencies that their mortgage risk assessments should not require cryptocurrency assets to be converted to U.S. dollars. And only crypto assets that "can be evidenced and stored on a U.S.-regulated centralized exchange subject to all applicable laws" are to be considered by the agencies in their proposal, Pulte wrote in a written order, effective immediately. Pulte was sworn in as the head of FHFA in March. Public records show that as of January 2025, Pulte's spouse owned between $500,000 and $1 million of bitcoin and a similar amount of Solana's SOL token. [...]
The policy change is meant to encourage banks to expand how they gauge borrowers' creditworthiness, in hopes that more aspiring homebuyers can qualify for a home loan. It also recognizes that cryptocurrencies have grown in popularity as an alternative to traditional investments, such as bonds and stocks. The agencies have to come up with their proposals "as soon as reasonably practical," according to the order. "This is a big win for advocates of cryptocurrencies who want crypto to be treated the same way as other assets are," said Daryl Fairweather, chief economist at Redfin.
Currently, stock investments are treated as qualifying assets that count toward reserves that banks want borrowers to have. But assets that are more volatile, like individual stocks or crypto, may be discounted by lenders, Fairweather noted. "As long as lenders are appropriately discounting crypto based on volatility, it's fine that crypto investments count toward reserves," she said.
Danielle Hale, chief economist at Realtor.com, added: "If Fannie and Freddie are going to accept cryptocurrency as collateral, that's a strong incentive for banks to shift their practices. Because people who might otherwise have to sell cryptocurrency to qualify -- and maybe that's a deal-breaker for them now -- under this new policy, they can qualify. It sort of expands the potential pool of eligible buyers."
Pulte also instructed the agencies that their mortgage risk assessments should not require cryptocurrency assets to be converted to U.S. dollars. And only crypto assets that "can be evidenced and stored on a U.S.-regulated centralized exchange subject to all applicable laws" are to be considered by the agencies in their proposal, Pulte wrote in a written order, effective immediately. Pulte was sworn in as the head of FHFA in March. Public records show that as of January 2025, Pulte's spouse owned between $500,000 and $1 million of bitcoin and a similar amount of Solana's SOL token. [...]
The policy change is meant to encourage banks to expand how they gauge borrowers' creditworthiness, in hopes that more aspiring homebuyers can qualify for a home loan. It also recognizes that cryptocurrencies have grown in popularity as an alternative to traditional investments, such as bonds and stocks. The agencies have to come up with their proposals "as soon as reasonably practical," according to the order. "This is a big win for advocates of cryptocurrencies who want crypto to be treated the same way as other assets are," said Daryl Fairweather, chief economist at Redfin.
Currently, stock investments are treated as qualifying assets that count toward reserves that banks want borrowers to have. But assets that are more volatile, like individual stocks or crypto, may be discounted by lenders, Fairweather noted. "As long as lenders are appropriately discounting crypto based on volatility, it's fine that crypto investments count toward reserves," she said.
Danielle Hale, chief economist at Realtor.com, added: "If Fannie and Freddie are going to accept cryptocurrency as collateral, that's a strong incentive for banks to shift their practices. Because people who might otherwise have to sell cryptocurrency to qualify -- and maybe that's a deal-breaker for them now -- under this new policy, they can qualify. It sort of expands the potential pool of eligible buyers."
Winning! (Score:5, Funny)
"This is a big win for advocates of cryptocurrencies who ... most of the time, are losers."
Fixed that for you.
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Or frauds! Don't forget fraudsters!
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All money made from bitcoin was lost by someone else. The total value of winners and losers is identical. It isn't an investment where capital is used to make money. It is a legal Ponzi scheme were winners are paid for by the losers. It is just that some people don't realize they are the losers yet.
So it's just like the regular stock market.
Re: Winning! (Score:2)
The stock market is not a zero sum game. You invest in companies that have useful economic activity, and get a share of their profits as dividends.
With cryptocurrency, the only thing you have is capital appreciation. There is no social utility. Even commodities like gold that also aren't income producing still have industrial uses, and are not purely speculative.
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The stock market is not a zero sum game. You invest in companies that have useful economic activity, and get a share of their profits as dividends.
Fair point, but there are a lot of large and influential companies that don't pay any dividends, because they invest their profits directly into growth and development. For example Nvidia.... well, they seem to pay 0.03 % of the current stock price, so essentially zero. The only economically sensible reason to invest in them is speculation; if there's some "useful economic activity" involved, the only way you'll get a piece of it is by buying low and selling high.
With cryptocurrency, the only thing you have is capital appreciation. There is no social utility. Even commodities like gold that also aren't income producing still have industrial uses, and are not purely speculative.
Cryptocurrencies have the same utility as
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Re: Winning! (Score:2)
Cryptocurrencies are a liability, not an asset. This since you will be scrutinized by the authorities.
Sums up the housing crisis (Score:5, Interesting)
Re:Sums up the housing crisis (Score:5, Interesting)
The housing crisis really has shafted a lot of people, and it seems like it is a permanent problem now. Those huge increases in property values that make people wealthy are not going to be repeated. If you buy a house young somehow, it won't be worth 5x as much, adjusted for inflation, when you retire. That was an offer for boomers only, and some select members of gen X.
Can't easily be undone either, because of course people who already own these expensive assets don't want to see them devalued. Some are still paying the mortgage on them, and could be in negative equity.
Apparently the only solution politicians have is to start another sub-prime mortgage bubble.
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Since that time prices have recovered
Prices tell almost none of the story alone. The people paying those prices are the ones renting them out rather than living in them. It inflates both rent and house prices because there's no other safe place to stuff your cash assets and wealthy people are desperate to get rid of excess cash that will be devalued by inflation.
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The people paying those prices are the ones renting them out rather than living in them
My point exactly! People are leaving the wealth parked in residential real-estate because, the people that want to live in it can't get the capital together to buy in a high rate environment already. The ones who can do, but otherwise the owners are becoming land lords. At the same time there isn't enough 'easy money' available to do higher risk, lower return efforts like putting in whole developments. That come with the cost of doing roads, water, sewer, retention ponds, etc after you manage to acquire the land and get thru often contentious zoning actions.
However the moment the FED opens the taps, developers will see strong housing demand and once again see building as safe bet for beating inflation and turning a nice profit. We need prime rates down around a couple %2 over inflation rates for that to happen though. Until then you can just hold existing stock and basically soak the wealth out of the renters.
Re:Sums up the housing crisis (Score:5, Insightful)
Yeah, not only does he not know what a traitor is, but he apparently is unaware that the Obama and Biden administrations were far more successful at limiting immigration than either Trump admin. Largely because Trump is corrupt and only interested in performative attacks on immigrants (hence going after kids here for leukemia treatments and cancelling the visas of people here legally, rather than going after the people who supposedly are taking American jobs by doing the under-the-table work, and their employers. The people who employ illegal immigrants are 99% Republicans, they'd scream and stop funding Trump if he damaged them in any way.)
Re:Sums up the housing crisis (Score:4, Interesting)
I don't mean just since 2008, I mean since the 1970s. In the UK the price of an average home went from about 2.5x average salary to about 10-12x average salary, depending on location. So even adjusted for inflation, houses got about 5x more expensive.
Of course if you got on the ladder in the 1970s or earlier you did well out of it. Hugely valuable asset that you can leverage or cash in by downsizing/moving somewhere cheaper when you retire. If you are buying in 2025... Well, by 2075 I doubt that house will be worth 50-60x average wages.
It screws up so much else as well. People end up putting everything into a mortgage, instead of a pension, and pensions are crap now anyway. Boomers got defined benefits, but they proved unaffordable, so now you get defined contributions, and your fund has to cover the defined benefit costs for those lucky enough to get them.
The issue isn't demand either, it's supply. NIMBYism and house builders manipulating the market. Again, boomers benefited for massive building after the war. New towns, lots of new houses, new infrastructure. We can't build any of that now, because of NIMBYism, green belt wankery, and incompetence at all levels of government.
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and pensions are crap now anyway.
I find pensions mystifying. You sign up for a deal and they appear to be able to turn around and say "you know what, nah" and pay you less.
NIMBYism and house builders manipulating the market.
It's not NIMBYism that's the problem, just house builders, Brexiters and the government. There are something like 1.5 million homes with planning permission which aren't being built. Partly they're not profitable enough, and partly we just don't have enough builders and we have decided t
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We just bought a new house last month. It's 1.23x our total household salary.
Of course, I'm gonna lose my job soon, putting it at more like 1.6x my wife's salary );
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No. I didn't say that at all.
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I appreciate how each side of the political spectrum has their own fairy tale about real estate:
Conservatives: illegal immigrants are buying all the homes!
Progressives: hedge funds are buying all the homes!
Neither is correct and these are just bugbears for politics. The actual answer is we as a nation, states and cities embraced housing restrictions, some bad regulations, bad zoning and general NIMBYism and let bad faith community groups restrict development for decades and now here we are in a simple dema
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To be clear I don't think 'illegal immigrants are buying up all the homes'
I think bringing in people by the millions every month means a long term demographic trend that represents significant population growth, vs not doing so which represents relative population stagnation.
I think population growth equals home price growth over time, we were talking about how boomers saw the value of their real-estate investments appreciate 500% over their lifetimes, on a 30 year scale, immigration policy - drives populat
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If they're not buying those homes then it makes my case, we just don't have enough homes.
We've had huge population growth before, all this stuff doesn't really matter since it comes back to the core issue: not enough homes where people want to live.
Population growth is good, it means economic growth, it shouldn't cause any housing spikes if development is allowed to keep pace.
If we don't like demographic shifts then just stand ground on that and let's not use housing a dirt little reach-around to get the im
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It also doesn't matter because the answer is always the same: just build more homes. Affordable homes, luxury homes, market rate units, doesn't matter, you just need supply.
There are more houses per household now than there were 50 years ago. The tightest squeeze in recent history was 1980. The biggest glut was mid-1990's.
Artificial interest rate suppression by the Federal Reserve Bank has driven housing prices up into the stratosphere since about 2001. With effective interest rates that were negative for over two decades.
And now we have average home price at an all-time historic high when compared to median household income. Our salaries did not keep up with the real estate
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Sorry, not enough homes where people want to live
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citation needed
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>Neither is correct and these are just bugbears for politics.
Oh?
While estimates vary, studies indicate that investment companies account for a substantial percentage of home purchases, with some reports suggesting they may own around a quarter of all single-family homes.
ONE QARTER of all single family homes. That's quite a lot. And the more money they have the more homes they will purchase, and the higher prices will be.
I'm not saying supply isn't a problem, but if you can't admit that THIS is a problem
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Now I know your American hating scumbag tard!
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In terms of serous reply, yes Democrats are traitors here. Look up the Hart-Celler Act.
Democrats absolutely lied to public about the demographic and with them cultural changes that was going to bring about. It got came to pass because Democrats lied to gain power.
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Democrats are traitors here. Look up the Hart-Celler Act.
White supremacists have been sad ever since.
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Well, that would fix the problem. Of course homeowners don't want the value of their largest asset reduced. But easier mortgages, well, that will just increase it right? Oh no, a crash, who could have seen that coming?
I doubt it's on purpose, but it might be the only way to solve the problem.
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I'm one of those people who already own one (actually 1.5) of these "expensive assets." And guess what, I have ZERO influence on the progression of property values. If values go down, I can't stop it, if values go up, I'm happy, but I can't stop that either, or even slow it down. So suggesting that those of us who own things, won't let prices go down, is suggesting that we have more power than we actually do.
So please don't blame those of us who have made wise use of our money all our lives. We bought old c
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what’s happening now is classic fiat economics: inflate assets, push debt, sell illusions. altcoins are just digital versions of the same scam — all hype, no fundamentals. bitcoin doesn’t promise returns, doesn’t inflate, and doesn’t bend to politics. it’s not here to fuel pyramids, it’s the only cr
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You fucked yourself because you refuse to actually do someone to buy property.
Wait, what?
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Women's lib dude, its not a just a strategy for girls anymore :-).
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"Rent boy" is an old expression, though one not usually associated with real estate investment advice,
I can see... (Score:5, Insightful)
...the next subprime mortgage crisis on the horizon.
Re:I can see... (Score:5, Insightful)
"So, Mr. Jones, you secured your mortgage you're struggling to repay with £1m of... ah, crypto. And what are those holdings worth now? $500k you say? Well, if you'll just vacate the premises and hand over your house keys, I'm sure we can sort all that out to minimise our losses as far as possible. I hear there are some nice bridges and stuff to live under not too far from your neighbourhood. Next!"
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And the billionaires have shown they're happy to leave those houses empty. The way it works is if you've got three houses and you can rent all three for 1,000 a month or two of them but $2,000 a month you rent two and leave one empty because that's a net $1,000 gain.
Basically our ruling class is arti
Wait until Wall Street (Score:2)
The crash that comes from that is going to make 2008 look like the good days of the
And the best part is when the crash comes people are going to get kicked out of their homes cuz they can't pay their mortgages but apartment rent is going to cost more than the mortgage they were paying on...
We are heading for Mass homelessness. We already have a large popula
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rsilvergun, even you know this wrong. Stop and think for moment. Let's imagine we do the 2k8 thing again, and people start getting foreclosed.
Who does that serve? -Maybe possibly would be real-estate barons looking to snap up property on cheap. Banks certainly don't want to be holding vacant property. Why would they want a bunch of depreciating assets, with high risk of being vandalized and further devalued.
So lets assume various property investment firms snap all them up. You think they can keep rents
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Trump raised rents before and he will do it again. The GOP has been attacking the middle class for a century; more now than maybe ever. Corporate Democrats are not good but if you can't see the difference between Trumpists and Conserva-Dems that are closer to traditional Republicans then you are blinded by the hype... Cognitively impaired by a cult-like religious dogma... in a word, a Trumptard.
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I can see the difference. The Trumpist populist wing of the party has done a lot more for the middle class - that expanded child tax credit alone... than DemoRATs have in decades.
That is not say every policy choice they make is great but still 100X better people that are not on the dole already. Basically if you actually work and earn a living, Trump is good for you, he may be even better for you if are 1%er and enjoy a bunch of investment income but that still waaay better than higher taxes and more expe
Re: Wait until Wall Street (Score:2)
My wife (Score:1)
My wife insisted on buying a new house in May. We paid $365 (listed at $350). I gave no idea how much, if anything, it is "overvalued", but two other houses on the same street sold at list price within a couple of weeks of ours. Sadly, we're putting another $75-$100K into it before we even move in, so while we won't be underwater, we will have a lot more into it than we will get out of it any time soon.
Compare that to the house we already had, we owe just under $100K, with a 15 year mortgage at 2.25%. If w
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I totally agree and made that argument. I was unpersuasive.
Asset (Score:2)
You keep using that word. I don't think you know what it means.
Risk based adjustment applied. (Score:2)
Asset
You keep using that word. I don't think you know what it means.
They may. Like stocks, crypto would not be valued at its full face value. There would be a risk based adjustment applied.
volatility (Score:4, Funny)
Reoccurring income is key (Score:2)
They can consider crypto all they want, but they won't lend you the money without reoccurring income. You can buy a $250,000 house and show the bank that you have $1 million in your savings account and they won't care. That million dollars, like crypto, is liquid. Lenders focus on reoccurring income, job, stability and your ability to keep earning.
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If you have a million in cash, and you want to buy a quarter million dollar asset in a 7.5% prime rate environment. I think you should just use the cash.
7% is a pretty good ROI in the market. Can you beat for a short time sure, but not paying 7% on 250k is a sure thing and therefore the better bet.
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If you have $1M in cash, why wouldn't you buy a $250K house with cash?
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Lots of reasons..,,is this a serious question?
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Yes, it is. How can it make sense to get a mortgage if you can pay cash, unless you think you can get a higher rate of return on investment than you pay on a mortgage... which I really doubt is doable nowadays unless you invest in a pretty high-risk investment.
(Note: I'm in Canada and mortgage interest here is not tax-deductible which might very slightly change the calculus.)
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Ok, I'll bite.
1). As you suggest, one may be better off borrowing the money and investing their own money. I think you know how that works.
2). Some people, valuable quite reasonably, having liquidity. So, for example, rather than having $250K tied up in a house, they have that money "sitting around", available for other opportunities that may arise in the future (which could be virtually anything.
3). Same as number two, but for emergencies, rather than opportunities.
4). Maybe they want to use their own $25
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Just a correction to the above, the numbers didn't sound right, but I was too sleepy to catch it.
When we got the new mortgage, we PAID OFF what we owe on the current house. Oops! That's why we owe $503K on a house purchased at $365K.
So when we sell the old house, our net proceeds will not be $165, but more like $260K. So we COULD re-mortgage the second house for more like $243K rather than $340K. We are required by the terms of our financing to get it down to no more than $300K. So, we're in the position
Consider (Score:2)
Well, yes. So now they can consider any ownership of coin assets as a negative toward hat person's credit.
but fairs fair - they have to accept (Score:2)
CEXs (Score:2)
Making mortgage backed securities even riskier (Score:4, Informative)
That seems like the fast path to destabilizing the mortgage backed security market. Crypto valuation can (and frequently has) wildly swing. What may seem like a million dollar asset value could be a $200k or $100k or zero value asset that would be unable to help a creditor if they needed to liquidate assets to cover a loan payment.
I'm all for fixing the GSE situation (stupid to have TWO agencies that do the same work and are both owned by the US Treasury so why pretend there's competition?), but this seems reckless.
Best,
LOL (Score:2)
What about my Rolex collection and my Pokemon cards?
On the surface, the idea of considering crypto an asset for a mortgage sounds stupid. But at the same time, if I've got one or two million in Bitcoin it should count for something when seeing a $500k mortgage. Anyway, shouldn't the property be the collateral or asset in consideration?
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If you have a million or two in Bitcoin, sell $500K of it to buy your house with cash.
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If you have a million or two in Bitcoin, sell $500K of it to buy your house with cash.
That's definitely one way to do it. But, what if your investment return was higher than your mortgage interest?
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Then you lose out. On the other hand, Bitcoin is a very risky investment, so you could very well win big by cashing out and buying something less risky.
IMO, if you have $1M or $2M invested in a highly volatile asset, cashing out 25% to 50% of it for something with almost no risk is not a bad decision.
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I agree that it's definitely not a bad decision. But, there are those that have a higher risk tolerance than me that would definitely take the mortgage and leave the capital invested. That's probably how they came to have millions in Bitcoin in the first place.
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Hindsight is 20/20 and I was referring to liquidating a portion of your bitcoin holdings, not all of them.
Quite right (Score:2, Insightful)
Of course they should take cryptocurrency holding into account. I would never consider lending money to someone who had substantial cryptocurrency "assets".
So the government is telling companies how to do b (Score:1)
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"Communist"? Do you just pick out words from a hat? In what way is this "communist" (citations needed). This is pure end-game capitalism scams
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projects like breadchain build on these ideas pushing blockchain for communal ownership democratic governance and redistribution. this echoes core communist principles like
Re: So the government is telling companies how to (Score:2)
Unsurprising (Score:1)
"who want crypto to be treated the same way" (Score:3)
And yet those same "advocates" don't want crypto to be regulated the same way as other assets are.
Housing Prices a Lot LIke Crypto Prices (Score:5, Informative)
Housing prices can only go down when there are large numbers of people prepared to sell their house for less than they paid for it. It takes a lot for that kind of forced sale to become common. When prices do start to fall a lot of people can't sell because they are under water, owing more on the home than the sale price. Since no one sells for less than they paid, that puts a floor under prices even when people are having a hard time paying them.. When people can afford to pay more the prices go up. So housing prices will always ratchet up
Crypto works the same way (although with less leverage). Almost no one sells for less than they paid because only a small number of people are going to be forced to sell. What this rule does is make it even less likely someone will sell because they want to use the money to buy a house. It allows them to use their crypto to qualify for a loan instead.
So this is putting another support under housing prices. Everyone wants housing to be more affordable, just not their house. And public policy reflects that. No one is advocating policies to drive housing prices down, only up.
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There's one huge difference between a house and crypto: a house has intrinsic value, and even if it's value falls, you can still live in it.
Another difference: everyone *must* live somewhere, but no one *needs* crypto. If crypto suffers a rug pull, it's just gone. If the housing market tanks, the houses are still sitting there, ready to be lived in. Eventually, just like after 2008, prices will come back up.
I sold a house at the end of 2008. I had to sell it for about 25% less than what it would have gone f
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There's one huge difference between a house and crypto: a house has intrinsic value
Which is both and advantage and a disadvantage. With houses there are external forces that effect the price. If the local economy gets hammered people can be forced to sell at a loss because they need to move. With crypto there really aren't. It is entirely driven by the market.
Eventually, just like after 2008, prices will come back up.
That has been true recently. I am not sure it is a universal truth. Low interest rates and a flood of cash have made purchasing a home possible with very little money up front. Easy money will remain as long as prices increase.Its e
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Yeah people can be forced to sell their houses, and people can also be forced to sell their crypto, if they need cash. That's not really a difference.
Home prices have followed a generally upward trend for at least the last 100 years. https://ancillary-proxy.atarimworker.io?url=https%3A%2F%2Fwww.longtermtrends.net... [longtermtrends.net] Yes, there are ups and downs, but the larger trend is always up.
The 2008 crisis happened because banks loaned money to people who couldn't repay. When too many of those people defaulted, investors--duh--lost their money!
Numerous cryptocurrencie
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The 2008 crisis happened because banks loaned money to people who couldn't repay. When too many of those people defaulted, investors--duh--lost their money
Not really. The crisis was caused by the price of the collateral dropping making the bonds far less safe. Bond holders (investors) don't care if people can pay if they can foreclose and recover their investment. The bad debt narrative is just shifting the blame from the lenders to the borrowers.
That's not really a difference.
Well yes there is. People bought the house because they needed it and are selling the house because they no longer need it. No one "needs" crypto, its purely a gambling exercise. Most people with any sense don't buy
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I'm not sure we're really disagreeing about the causes of the 2008 financial crisis. Yes, bond holders "didn't care" that they were taking on risky loans, because they saw them as a short-term investment. That does not negate the point that people were given loans they shouldn't have been given. https://ancillary-proxy.atarimworker.io?url=https%3A%2F%2Fwww.rba.gov.au%2Feducati... [rba.gov.au]). The "blame" is squarely on the lenders, not the borrowers. The lenders should have rejected many loan applications that they did not reject.
People don't buy houses because they ne
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The "blame" is squarely on the lenders, not the borrowers.
No, the blame is squarely on the finance industry that created the bonds. They were the market for loans that lenders were creating. And since the lenders' finance industry customers didn't care whether the borrower could make payments, neither did they. The problem wasn't that people couldn't pay, that was accounted for by having collateral to pay back the loan when they defaulted. The problem was property values dropped and the collateral wasn't enough to make the bond holders whole when people defaulted.
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I don't disagree with your take on the 2008 crisis.
Buying a home is inherently a financial choice. A purchase, especially a large, durable one, is always an investment. If someone decides they want to live in a certain place, they then have a second decision to make, within that place: buy or rent. Those two options exist in every place where someone might want to live. The choice is one of financial tradeoffs. Buying has better long-term returns, as long as you don't move frequently. For those who move fre
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There is no such thing as an infinite ceiling.
Infinity itself is a bit belief based. My point is that those who think it is inevitable that bitcoin will fail like it is with Ponzi schemes may be missing how the real crypto market works. Although, as I understand it, the infamous "Ponzi" insisted for the rest of his life that his scheme could have gone on forever too.
I think its important to remember that buying and selling crytpo has some uses for keeping certain transactions confidential. The price is irrelevant for those "wash" trades and that means
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Note that I didn't say crypto was a Ponzi scheme, just Bitcoin and its cousins. There is no meaningful difference between Bitcoin and a Ponzi scheme. None.
Stablecoins, on the other hand, are useful for what you are describing. They are useful for international transactions, for example. I can see them replacing money wires and remittances as we know them today. On the other hand, don't get sucked in to the promise of anonymity. Researchers and law enforcement have again and again proven that crypto transact
Right... (Score:3)
What could possibly go wrong with that? Seems like the mortgage meltdown of the mid 2000s was centuries ago.
Margin calls in ... (Score:2)