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aa3

My Proposal For Foreclosure Crisis In Usa

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At this point it looks like the bondholders do not have a legal claim on the properties in the event of default. Of course the people still owe the money, but it is now unsecured debt. A potential unwind is that the bondholders sell the notes back to the originating banks, who do have the legal title.

But my idea is that the bondholders be allowed to sell their bonds to the fed at par, and the fed decides not to pursue those who choose to stop paying their mortgage. Beyond reporting the default to the credit ratings agencies.

As people stop paying their mortgages, either by choice or because of the terrible economy, or borrowed too much.. the fed would just suck up the losses. This would be an effective QE, as ordinarily as the debtors paid back the loans, the principle portion of the payment would disappear into money heaven.

If you look at so many young families their family income is like $4,000 a month after tax, but $1,800 is going to mortgage payments. And probably near 2,000$ is going to cost of living, like electricity, food, oil, car insurance, etc..Leaving very little to participate in the discretionary part of the economy.

But if you nuke the entire 1,800$ mortgage payment, we are talking a HUGE increase in disposable income. Like a 500% increase. Which is going to create vast numbers of new jobs, and make it easier for other people to actually make money.

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Propping up this pig is what is causing all the damage, the US (and others) need to get away from this inflayed absudity sitting at the centre of their economy as it has distorted and destroyed the fundamental efficiency and competitiveness of the economy.

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the very poor were evicted and stopped paying long ago.

they wont be entirely happy with people with Jumbo loans just stopping paying.

and whats to stop EVERYONE stop paying....a sense of fairness?

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the very poor were evicted and stopped paying long ago.

they wont be entirely happy with people with Jumbo loans just stopping paying.

and whats to stop EVERYONE stop paying....a sense of fairness?

Quite, the sense of fairness would indicate that they themselves should not bother paying either - or take out massive loans that they have no way (or intention) of honouring.

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Quite, the sense of fairness would indicate that they themselves should not bother paying either - or take out massive loans that they have no way (or intention) of honouring.

and next, which MBS, CDO, CDO squared is worth anything at all.. dont forget, it STARTED in the US, and spread here, because our peopel BOUGHT these things...the mess is so convoluted, we would immediately get another liquidity crunch.

no, what should happen is that the MBS holders should pass the bag back to the banks that made them...only 6% are behind, they made BILLIONS in profits if you listen to Doomberg, should be a walk in the park.

My pension needs to be worth something and the criminals that thought they could sidestep the law, lie and defraud MUST lose ALL their ill gotten gains, their rep and their jobs, THEN spend some...MUCH time in the PEN.

See, the debt never went away, and in spite of QE..its come back to haunt....as it will again if its not DEFAULTED and the issuers LOSE.

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aa3, why do all your "solutions" involve letting people off their bad decisions scott free? Everything you suggest will make society worse.

because he's a nice guy, a very nice guy. Well intentioned, but cant see the consequences.

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Propping up this pig is what is causing all the damage, the US (and others) need to get away from this inflayed absudity sitting at the centre of their economy as it has distorted and destroyed the fundamental efficiency and competitiveness of the economy.

Big talk lately is the USA is going to embark on massive QE, partly to beat down the price of the dollar to improve competitiveness. But the other nations of the world say they are ready to buy up as many dollars as possible to keep the US dollar high, and help their export industries.

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Big talk lately is the USA is going to embark on massive QE, partly to beat down the price of the dollar to improve competitiveness. But the other nations of the world say they are ready to buy up as many dollars as possible to keep the US dollar high, and help their export industries.

The US record speaks for itself, a policy of failure that is being continued.

http://blogs.wsj.com/economics/2010/10/09/polands-central-bank-governor-belka-on-currency-wars/?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed:+wsj/economics/feed+(WSJ.com:+Real+Time+Economics+Blog

Poland’s Central Bank Governor Belka on Currency Wars

“Of course it worries me. All those wars produce a lack of stability, and the warring parties forget the basic point. The bottom line is devaluations and appreciations change your competitive position temporarily but they don’t change your competitive position for good. If you want to strengthen your competitiveness by devaluing your currency, this is a sign of despair, this isn’t a policy. I am worried because this destabilizes the global economy and it does not lead to rebalancing, something we all long for.”

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That would be very unfair towards those that didn't get themselves into debt, unless those get free cash instead.

This is very true. It seems the USA is at a point where something big is going to happen soon. And some people are going to get relatively shafted.

I don't see how they could realistically proceed with the foreclosures as now. 7 million Americans are now behind on their mortgages, and this in a nation with 80 million houses. And in addition to the several million already foreclosed.

Edited by aa3

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because he's a nice guy, a very nice guy. Well intentioned, but cant see the consequences.

You are too charitable.

There is a certain myopic type who never seem to get the consequences of a set of actions - I think its a genetic flaw - a kind of short term intelligence that does not allow them to see long impact or any risks associated with todays actions. Seems that politicians as a whole suffer from this type of short sightedness. Maybe aa3 is wasted - he needs to become a politician - their his qualities of stuffing up all our tomorrows for all of us today will be appreciated.

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This is very true. It seems the USA is at a point where something big is going to happen soon. And some people are going to get relatively shafted.

I don't see how they could realistically proceed with the foreclosures as now. 7 million Americans are now behind on their mortgages, and this in a nation with 80 million houses. And in addition to the several million already foreclosed.

well yeah!...the something BIG happened in the build up to the credit crunch. IT hasnt gone away...and if they patch this debacle up, it will arise again in some other monster. And it will keep popping up until....the debt is repaid or defaulted....and they are avoiding both. And if they do that, come closure time of all the 25 year MBS....it will explode again as these things havent self liquidated.

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But my idea is that the bondholders be allowed to sell their bonds to the fed at par, and the fed decides not to pursue those who choose to stop paying their mortgage. Beyond reporting the default to the credit ratings agencies.

As people stop paying their mortgages, either by choice or because of the terrible economy, or borrowed too much.. the fed would just suck up the losses. This would be an effective QE, as ordinarily as the debtors paid back the loans, the principle portion of the payment would disappear into money heaven.

Well,

In theory a good Idea, but would mean that any half sensible person with less than 10% equity will do this! It could work if the loan is transferred to the FED who give Mortgage holidays and the loan interest continues to acrue. So at least when the economy does pick up then they have to pay it back....oh, hold on, that is the UK model! Banks owned by Govt, agree repayment holidays for those out of work which is subsidised by the govt hopusing schemes but the individual is still on the hook.

aa3, I think you need to do some more 'thinking about this' as I would give you a c-!

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Well,

In theory a good Idea, but would mean that any half sensible person with less than 10% equity will do this! It could work if the loan is transferred to the FED who give Mortgage holidays and the loan interest continues to acrue. So at least when the economy does pick up then they have to pay it back....oh, hold on, that is the UK model! Banks owned by Govt, agree repayment holidays for those out of work which is subsidised by the govt hopusing schemes but the individual is still on the hook.

aa3, I think you need to do some more 'thinking about this' as I would give you a c-!

the problem ISNT the loan...that was made.

the problem is LEGAL TITLE to the deed.....the whole thing is messed up.

If the Fed paid off the MBS, there is still the problem of the title deeds and who has them, who can sell them on and who can take true title in a purchase.

This is MUCH bigger than just the money.

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the problem ISNT the loan...that was made.

the problem is LEGAL TITLE to the deed.....the whole thing is messed up.

If the Fed paid off the MBS, there is still the problem of the title deeds and who has them, who can sell them on and who can take true title in a purchase.

This is MUCH bigger than just the money.

Yes this is starting to go to the heart of US property rights. Right now even a young couple thinking of buying a foreclosed property for super cheap from a bank trying to offload it, its not clear that couple would get legal title!

In my scenario the fed would take the bonds, but not move to claim the deed. There would probably need to be legislation where the deed could be legally given to the current occupants.

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Yes this is starting to go to the heart of US property rights. Right now even a young couple thinking of buying a foreclosed property for super cheap from a bank trying to offload it, its not clear that couple would get legal title!

In my scenario the fed would take the bonds, but not move to claim the deed. There would probably need to be legislation where the deed could be legally given to the current occupants.

So where's my free house? Gimme gimme gimme. If they are getting one, I want one!

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Yes this is starting to go to the heart of US property rights. Right now even a young couple thinking of buying a foreclosed property for super cheap from a bank trying to offload it, its not clear that couple would get legal title!

In my scenario the fed would take the bonds, but not move to claim the deed. There would probably need to be legislation where the deed could be legally given to the current occupants.

I dont think the 5th Amendment would allow....property transfers are subjet to the course of LAW....that means a judge, a paper trail and proof...

and letting the banksters off scott free? is this going to be a happy USA for much longer if fraudsters simply walk, and continue to lie and cheat and gain?

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So where's my free house? Gimme gimme gimme. If they are getting one, I want one!

My preferred solution has always been the national dividend. My proposal for the USA was 800$ tax free, non-means tested for every adult citizen, every month, from now on.

But everyone seems against that idea, except a few big thinkers. So my newest plan I'm thinking might be more acceptable because it does bail out the rich who hold these bonds, while also bailing out tens of millions of Americans. And its opportunistic, this problem looks unsolvable and has severe consequences in and of itself.

I think it was that philosopher George Bush who argued in a press conference before the Iraq War.. 'The risks of doing nothing, outweigh the risks of the action'. The American society is nearing that point in the economy.. something big is going to have be done soon, because the current doing nothing is leading to an ever worsening situation.

Foreclosing on 10% of the housing in the country is starting to call into question property rights in the nation.

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I dont think the 5th Amendment would allow....property transfers are subjet to the course of LAW....that means a judge, a paper trail and proof...

and letting the banksters off scott free? is this going to be a happy USA for much longer if fraudsters simply walk, and continue to lie and cheat and gain?

Possibly the fed could pay 90 cents on the dollar instead of take par?

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My preferred solution has always been the national dividend. My proposal for the USA was 800$ tax free, non-means tested for every adult citizen, every month, from now on.

But everyone seems against that idea, except a few big thinkers. So my newest plan I'm thinking might be more acceptable because it does bail out the rich who hold these bonds, while also bailing out tens of millions of Americans. And its opportunistic, this problem looks unsolvable and has severe consequences in and of itself.

I think it was that philosopher George Bush who argued in a press conference before the Iraq War.. 'The risks of doing nothing, outweigh the risks of the action'. The American society is nearing that point in the economy.. something big is going to have be done soon, because the current doing nothing is leading to an ever worsening situation.

Foreclosing on 10% of the housing in the country is starting to call into question property rights in the nation.

i take it your understanding of American culture and psyche is nada, i suppose technically something like your proposal might be accepted in Europe although i doubt it, but how do you propose raising further govt tax following the tax strike that would start the day after, i wouldnt bet against such a proposal starting another civil war

Edited by Tamara De Lempicka

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i take it your understanding of American culture and psyche is nada, i suppose technically something like your proposal might be accepted in Europe although i doubt it, but how do you propose raising further govt tax following the tax strike that would start the day after, i wouldnt bet against such a proposal starting another civil war

First if disposable spending rises by 2-3 times, people are going to be making far more money, so paying more taxes. And as millions of new jobs are created, millions of unemployed will come off benefits and be net tax payers.

That young family I mentioned who finds themselves with 2000$ to spend in discretionary, instead of 200$ at the end of the month.. I guaruntee they will go and blow the whole 2000$. I should also add, actually until the credit crunch hit that young family was spending 2000$(even though they only had 200$).. because there was endless credit being funneled to them.

Lastly some of us believe the Fed balance sheet needs to expand from the current 2.3 trillion, to more like 15 trillion.

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First if disposable spending rises by 2-3 times, people are going to be making far more money, so paying more taxes. And as millions of new jobs are created, millions of unemployed will come off benefits and be net tax payers.

That young family I mentioned who finds themselves with 2000$ to spend in discretionary, instead of 200$ at the end of the month.. I guaruntee they will go and blow the whole 2000$. I should also add, actually until the credit crunch hit that young family was spending 2000$(even though they only had 200$).. because there was endless credit being funneled to them.

Lastly some of us believe the Fed balance sheet needs to expand from the current 2.3 trillion, to more like 15 trillion.

thats all very nice but its still a wealth transfer via inflation/tax whatever and Americans would not accept it. So the original question remains what do you do about the tax strike that starts the day after, what you are suggesting would likely break up the US. The average Republican would rather starve and see the economy collapse rather than accept your proposal.

And even suggesting your proposal works what do you do to solve the next bubble that involves the entire population who have been taught to participate. This bubble is basically a direct result of the inflation route taken out of the 70s economic problems, naturally its bigger and more catastrophic than that one because people in the 70s were taught to participate via the inflation solution

Edited by Tamara De Lempicka

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My preferred solution has always been the national dividend. My proposal for the USA was 800$ tax free, non-means tested for every adult citizen, every month, from now on.

But everyone seems against that idea, except a few big thinkers. So my newest plan I'm thinking might be more acceptable because it does bail out the rich who hold these bonds, while also bailing out tens of millions of Americans. And its opportunistic, this problem looks unsolvable and has severe consequences in and of itself.

I think it was that philosopher George Bush who argued in a press conference before the Iraq War.. 'The risks of doing nothing, outweigh the risks of the action'. The American society is nearing that point in the economy.. something big is going to have be done soon, because the current doing nothing is leading to an ever worsening situation.

Foreclosing on 10% of the housing in the country is starting to call into question property rights in the nation.

i think you forgot...they already tried that....worked for about....mmmm a week.

ZImbabwe tried printing...Germany and Argentina, France and Poland....it NEVER Works because it takes WEALTH to deal with debt.

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  • 261 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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