<== Site Review (2008-09-27) ==>

Y-Intercept Blog

I am making myself site of the day again. My personal blog is called It is named after the point where a line crosses the y-axis; which can be seen as the starting point of a line.

This last year, I've pushed out a number of blog posts on the mortgage mess and stock market collapse.

I believe that the collapse of FannieMae and FreddieMac show that there is a core problem in the way that we finance housing. This collapse is just one in a long string of failures in our effort to build a mechanism to re-insure mortgages.

The problem with mortgages is that they are divorced from the property being financed. I contend that a better way to go about housing is to create a system of equities wherein the property owner and lending institutions share the equity and risk involved in home ownership.

I contende that mortgages create systemic risk because people simply don't know what they own. The equity you have in your house is the selling price minus the mortgage (but you don't know the selling price until you sell.) The equity owned by the bank is the face value of the mortgage, minus the people who default on the loan.

Things look pretty when the market rises, but when the market dips people are suddenly in the dark about the equity they own.

Sharing the equity creates a mechanism where both the bank and homeowner know what they own.

In a like fasion, I've turned against the use of short sales (see through shorts). It is my contention that short selling clouds ownership of equities while externalizing risks.

Photoblog Efforts

I've slowed down on my photo blogging efforts. Here are few of the photo blog pages:

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Site NameY Intercept
Review History2008-09-27
Category Salt Lake Sites: Home Pages
Page Views5237
PreviousDavid Archuleta
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