rant · moment 5 of 32
The Housing Bubble, GSEs, and the Death of Malibu
from Andrew Schulz | The Tim Dillon Show #436 · #436
3 min
Tim and Andrew discuss the economics of inflated home prices, government-backed mortgages via Fannie Mae and Freddie Mac, and speculate that with Hollywood's decline, Malibu real estate may no longer hold its value.
- Chamath and the all-in guys discussing homes on tiny lots worth $100 million as an example of crazy ideas that need rethinking.
- Tim explains how the US government pushed homeownership through GSEs like Fannie Mae and Freddie Mac, inflating prices and pricing out first-time buyers.
- America is one of the only countries offering 30-year fixed mortgages, made possible by the implicit government guarantee behind GSEs.
- Government-backed entities depress interest rates and create asset bubbles where houses are worth absurd amounts of money.
- Tim looks at photos of burned-out Malibu homes and questions what makes them worth millions when they're destroyed.
- Looking at the scorched Malibu shoreline with gray water and overcast sky, Tim asks why anyone would pay $8 million to live there.
- The only reason Malibu was ever valuable was because Hollywood existed in LA.
Fannie Mae and Freddie Machousing marketChamath Palihapitiyaall-in