printI’ve just heard McMussolini say that the American dream of home ownership should not be crushed under the weight of a bad mortgage.
What about that fundament of the American founding: self-reliance and responsibility?
McMussolin went on to promise to buy up bad home mortgages, which is what I thought the Sell-Out Bill did indirectly. These idiots don’t really understand the bill they just signed. As Ron Paul cautioned, Warren Buffet confessed to not understanding the derivatives market. Do we really think the buffoons in Congress get it?
I bought my house 10 years ago for $ 282k – it got valued last year at $ 750k and now $ 650 k – why?? Answer: home speculation, encouraged by Fannie/Freddie “ownership society” advocates, fast buck loan officers, and idiotic “financial gurus” – which enabled supermarket grocery baggers to purchase McMansions. And if my house price were to settle to a mere $ 500 k – would that be the end of civilization?? Would it be any worse than a 50% drop in the Dow Jones? Keeping housing prices up is as ridiculous as Herbert Hoover ordering industry to keep wages up in 1929.
And supermarket grocery baggers with McMansions should be foreclosed upon. The market should be allowed to work, however painful in the short run. By the way, with the Federal government buying up mortgages, you can be sure that Harry Reid will insist that Las Vegas realty values be kept high (and the same for the rest of the Congressional buffoons for their states as well as “honest” McInsane).
[Your municipality also helps push up home prices so it can plunder you for property taxes. These mean that you only ever own your home nominally, not really.–IM]
It seems like there is very little difference between McCain and Obama on many issues. They both want to buy up private mortgages. They both carped about the Paulson Plan bailing out Wall Street instead of Main Street. They both want to continue foreign intervention; the debate is simply about where to intervene (invade).
The miracle of fractional reserve banking has brought us to where we are today. Using monetary policy to engage in social engineering, and setting up Freddie Mac to establish a ‘market mechanism’ to give government backing to bad loans and sell them, fiat money was pushed towards the housing market, causing prices to rise.
Banks purchased these packaged mortgages as derivatives. As the price of housing went up, so did the value of the derivatives. Being held as assets, the banks could now loan out more than twenty times the value of the increase, and they did – right back into the housing market. Which pushed prices up further. Rinse and repeat.
It’s a positive feedback loop that will exponentially increase, feeding on itself, forever. Or not. Nobody wanted to question what was happening as they raked billions from the expansion.
It seems the price of these toxic derivatives ballooned to $1 Quadrillion, about ten times the value of all the assets on Earth!
With that much leverage, only a few loans had to go bad to put the banks into insolvency.
The collapse is inevitable. It can’t be papered over with mere trillions in printed money, nor with zero interest, not even with Soviet-style takeover of the banking industry.
The core was rotten when the fifth plank of the Communist Manifesto was enacted into U.S. law in 1913 as the Federal Reserve Act, along with the second plank, the income tax.
McCain has no more clue than Obama. They are both committed to the same Communist economic theory, neither one understands what is happening, and both of them are guaranteed to make it worse. The only tools in a statist’s economic toolbox are more government control and more inflation.
We are doomed to suffer an unprecedented contraction in our standard of living. The entire world’s central banks played the game and are collapsing as well.
The scary part is that these statists think the way to fix economic crashes is to fight a world war, and they’ve been teaching this in schools for generations.
Bad, bad times may be just ahead.
–John Danforth–