Comment by pksebben

(forgive me if I don my aluminum chapeau going forward)

> Black rock isn't buying up all the housing, your neighbors are.

So in '08 we saw the veil drop on the mortgage folks. For a brief moment the sort of advantage they were taking of individual homeowners (I'm including landlords here) was plain for all to see, because the systems they had built to extract that value had been pushed too far and started to break.

The really clever/evil/nasty thing that happened next was that they all said "we're sowwy" and pretended to close up shop on the Mortgage Backed Securities markets, while sowing the seeds for a resurgence in mortgage lending by having Fannie run REO-to-Rental programs that sold foreclosed homes in bulk to investors. It would have been too obvious in the numbers if large institutional investors had bought those directly, so they let mom and pop go into business as landlords, effectively buying obfuscation of the stream of finances for the cost of whatever margins they had to take a hit on to allow for low interest rates to pump housing prices up to a place where, like in 07, they could go back to fucking around with mortages.

In less word salady terms, the plan looked like so:

- "oh fuck we pushed it too far and here come the torches and pitchforks"

- Stop making money on mortgages, but we're investment banks as well as mortgage lenders, so we can make up for the loss of mortgage money by buying a more significant fraction of the housing market at near-zero interest rates

- Wait for low interest rates to pump housing prices over time

- Okay cool, people have forgotten about the whole 08 thing and we've peeled back all the subsequent regulation so we can go back to making our money bundling risky ass mortgage securities again <--- we are here>

The essence of the problem as I see it is that finance has gotten so byzantine and complicated that the only people who understand it in real time are the people who are actively trying to manipulate it to maximize their profits, and by the time it becomes clear what dirty tricks they're pulling they've moved on to the next grift so it looks like they're innocent.