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BlackRock’s Chief Executive Officer Laurence D. Fink said the U.S. housing market is “structurally more unsound” today than before the financial crisis because it depends more on government-backed mortgage companies such as Fannie Mae and Freddie Mac.
“We’re more dependent on Fannie and Freddie than we were before the crisis,” Fink said today at a conference held by the Investment Company Institute in Washington, noting that he was one of the first Freddie Mac bond traders on Wall Street.
Fink co-founded BlackRock in 1988 after a career at First Boston Corp., now part of Credit Suisse AG, where he was known for his work slicing and pooling mortgages and selling them as bonds. Fink, who has built New York-based BlackRock into a $4.4 trillion money manager, said today that with strong underwriting standards, ownership of affordable homes can again become a foundation for American families.
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But exactly how is this attainable? Everyone is stating the banking institutions have been in excellent shape? Additionally, the thought of housing is recuperating? That things are all on their way normal again? As Fink illustrates…. it isn’t and we’re heading to Subprime 2.0 when the administration gets what they want.
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