Jump to content
House Price Crash Forum

8% of US mortgages in Forbearance "Nobody Knows How to Ever Get Out of This Mess"


Recommended Posts

47 minutes ago, Saving For a Space Ship said:

8% of US mortgages in Forbearance 

"Nobody Knows How to Ever Get Out of This Mess"

https://wolfstreet.com/2020/07/26/nobody-knows-how-to-ever-get-out-of-this-mess/

...The Great Forbearance 

Yep, I’m thinking Q4 2021 onwards, if you haven’t got debt, and a house, then you will be left behind by the “great Reset” that will sold as the only way to deal with the insane levels of debt. I am buying January or February no matter what now. 

Link to post
Share on other sites
1 hour ago, HovelinHove said:

Yep, I’m thinking Q4 2021 onwards, if you haven’t got debt, and a house, then you will be left behind by the “great Reset” that will sold as the only way to deal with the insane levels of debt. I am buying January or February no matter what now. 

I'm beginning to think this might be the case

Link to post
Share on other sites
1 hour ago, HovelinHove said:

Yep, I’m thinking Q4 2021 onwards, if you haven’t got debt, and a house, then you will be left behind by the “great Reset” that will sold as the only way to deal with the insane levels of debt. I am buying January or February no matter what now. 

I have to say it is a doom scenario that I easily see more and more happening.

Link to post
Share on other sites

Not sure I understand your strategy in this economic climate of taking on house price debt though. House prices will continue to decline in both scenarios, either default or forbearance. If a reset occurs interest rates will rise since the amount of serviceable debt declines. More than likely with the forbearance scenario, banks will eventually be provided with rights to take ownership. They will have no interest in holding property especially in a declining market. 

Link to post
Share on other sites

A debt reset will give an instant Zimbabwe dose of inflation. Remember credit debt is, effectively, a claim on future work.  Since debt money is printed via Fractional Reserve Banking (FRB), any reset means that currency has no backing against future work - it becomes worthless.

Who holds this debt? Are they willing to be written off?

Any debt reset needs a replacement 'new currency'.   We ruled out GBP > EUR, so we either go USD (which is in the same boat) or RMB (and surrender to China).  The social impact of a new GBP are the stuff of nightmares

Link to post
Share on other sites

The us is more likely to try letting normal commercial rules apply. 

Fannie may and Freddie mac go bust (again) . Some us banks go bust. Bureaucracy is trimmed.  Life goes on. 

The "new deal" will be forced labour for the unemployed  etc. 

Link to post
Share on other sites
3 hours ago, HovelinHove said:

Yep, I’m thinking Q4 2021 onwards, if you haven’t got debt, and a house, then you will be left behind by the “great Reset” that will sold as the only way to deal with the insane levels of debt. I am buying January or February no matter what now. 

Hmm.

Ideologically, debt is the spending future production today.

If a debt is defaulted on, the debtor has had their cake from tomorrow and the creditor has lost it.

Many of the things we consume are funded with the promise of surrendering future production.

 

So what are the consequences of a large scale debt default?

  1. Pension funds (who are the large scale creditors) go bust. The pensioners will not have the consumption they saved for and were expecting.
  2. Fiat savers lose their savings, either through direct confiscation, or by the destruction of value of the currency.
  3. Debtors and those dependent upon debt for their consumption see a large scale reduction in their quality of life as no one has production to lend them, nor would they lend to these people even if they could

No one is getting out of this intact.

Creditors and debtors are going to experience declines in standards of living, the scale of which will be as unimaginable as living through the firebombing of Dresden. 

Except it is happening to everyone, everywhere, at the same time.

Link to post
Share on other sites

In which case wouldn't it make sense to buy a house before it all implodes, as then you at least have a tangible asset rather than worthless fiat ? If not that, perhaps change it all into RMB or some other currency that might survive the reset intact and hope you get a decent exchange once it's played out.

Link to post
Share on other sites

I can see inflation above inflation uplift clauses in pensions being the true reset.

it will gift those with houses by inflating away mortgages, while killing the unfair unfunded boomer pensions. 

this will have a double whammy of forcing the oldies to actually downsize (not talking bungalow but flats) and causing wage inflation. 

And it’s baked in, a housing crash takes out the economy which causes huge inflation as the £ becomes worthless. 

there is not a scenario where houses crash and the £ retains its spending power.

or houses correct in ‘real terms’ but no-one cares as wage inflation has changed how we value stuff. 

 

Link to post
Share on other sites
4 hours ago, HovelinHove said:

Yep, I’m thinking Q4 2021 onwards, if you haven’t got debt, and a house, then you will be left behind by the “great Reset” that will sold as the only way to deal with the insane levels of debt. I am buying January or February no matter what now. 

Yep no capitalism and not fair either.

The Steven keen cheque idea may become interesting in that scenario.

25,000£ to be used to settle debts and if no debts retained as money.
 

Link to post
Share on other sites
52 minutes ago, petetong said:

In which case wouldn't it make sense to buy a house before it all implodes, as then you at least have a tangible asset rather than worthless fiat ? If not that, perhaps change it all into RMB or some other currency that might survive the reset intact and hope you get a decent exchange once it's played out.

House purchase is my preferred option, but even though it is a tangible asset that you think you own, it sits inside the jurisdiction of UKgov and therefore subject to the whims of that government and the electorate. I could see vast increases in local taxation on property owners etc. In effect, it is only your house as long as the government lets you live there. In terms of currencies, I am thinking there are not many options in the western world, and I would never trust a currency that relies on a dictatorship with an equally indebted banking system.

Scary times. The count posted a really depressing summary of how little control we actually have if the vile powers that be decide to screw us. Gold...can be confiscated...etc

Edited by HovelinHove
Link to post
Share on other sites
11 minutes ago, HovelinHove said:

House purchase is my preferred option, but even though it is a tangible asset that you think you own, it sits inside the jurisdiction of UKgov and therefore subject to the whims of that government and the electorate. I could see vast increases in local taxation on property owners etc. In effect, it is only your house as long as the government lets you live there. In terms of currencies, I am thinking there are not many options in the western world, and I would never trust a currency that relies on a dictatorship with an equally indebted banking system.

Scary times. The count posted a really depressing summary of how little control we actually have if the vile powers that be decide to screw us. Gold...can be confiscated...etc

I think a house is probably the safest option out of the lot though given the vested interests involved, but obviously that means either paying top dollar now or waiting and hoping you time it right for any drop, assuming one comes.

Link to post
Share on other sites
3 hours ago, HovelinHove said:

House purchase is my preferred option, but even though it is a tangible asset that you think you own, it sits inside the jurisdiction of UKgov and therefore subject to the whims of that government and the electorate. I could see vast increases in local taxation on property owners etc. In effect, it is only your house as long as the government lets you live there. In terms of currencies, I am thinking there are not many options in the western world, and I would never trust a currency that relies on a dictatorship with an equally indebted banking system.

Scary times. The count posted a really depressing summary of how little control we actually have if the vile powers that be decide to screw us. Gold...can be confiscated...etc

Stuff your cash in a matress.

Link to post
Share on other sites
4 hours ago, jiltedjen said:

I can see inflation above inflation uplift clauses in pensions being the true reset.

it will gift those with houses by inflating away mortgages, while killing the unfair unfunded boomer pensions. 

this will have a double whammy of forcing the oldies to actually downsize (not talking bungalow but flats) and causing wage inflation. 

And it’s baked in, a housing crash takes out the economy which causes huge inflation as the £ becomes worthless. 

there is not a scenario where houses crash and the £ retains its spending power.

or houses correct in ‘real terms’ but no-one cares as wage inflation has changed how we value stuff. 

 

Every day hundreds of final indexlinked final salaries die....when they are gone they are gone.;)

Link to post
Share on other sites
55 minutes ago, winkie said:

Every day hundreds of final indexlinked final salaries die....when they are gone they are gone.;)

The burden of these pensions seems the root cause of the public spending crisis we have.  Over half the Social Security spend is on Pensions and the Public sector pension burden is over double the private sector and unfunded

Use the Reset to remove / alter the terms to be less generous and bingo..public expenditure becomes affordable.

For every £1 of private debt written off, you also write off £5 of National Debt

Link to post
Share on other sites
Posted (edited)

11 million households could be evicted over the next four months

A new tool helps you see the contours of the approaching housing disaster

https://www.fastcompany.com/90532305/11-million-households-could-be-evicted-over-the-next-four-months

Edit: Deserves its own thread imo...

Done

https://www.housepricecrash.co.uk/forum/index.php?/topic/237024-11-million-us-households-could-be-evicted-over-the-next-4-months-says-new eviction-estimation-tool/ 

Edited by Saving For a Space Ship
Link to post
Share on other sites

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.

Guest
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.

Loading...
  • Recently Browsing   0 members

    No registered users viewing this page.

  • 416 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%



×
×
  • Create New...

Important Information

We have placed cookies on your device to help make this website better. You can adjust your cookie settings, otherwise we'll assume you're okay to continue.