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US Households Are Not "Deleveraging" - They Are Simply Defaulting In Bulk
Lately there has been an amusing and very spurious, not to mention wrong, argument among both the "serious media" and the various tabloids, that US households have delevered to the tune of $1 trillion, primarily as a result of mortgage debt reductions (not to be confused with total consumer debt which month after month hits new record highs, primarily due to soaring student and GM auto loans). The implication here is that unlike in year past, US households are finally doing the responsible thing and are actively deleveraging of their own free will. This couldn't be further from the truth, and to put baseless rumors of this nature to rest once and for all, below we have compiled a simple chart using the NY Fed's own data, showing the total change in mortgage debt, and what portion of it is due to discharges (aka defaults) of 1st and 2nd lien debt. In a nutshell: based on NYFed calculations, there has been $800 billion in mortgage debt deleveraging since the end of 2007. This has been due to $1.2 trillion in discharges (the amount is greater than the total first lien mortgages, due to the increasing use of HELOCs and 2nd lien mortgages before the housing bubble popped).
In other words, instead of actual responsible behavior of paying down debt, the primary if not only reason there has been any "deleveraging" at all at the US household level, is because of excess debt which became insurmountable, not because it was being paid down, the result of which is that more and more Americans are simply handing their keys in to the bank and walking away, and also explains why the US banking system is now practicing Foreclosure Stuffing, as defined first here, as the banks know too well, if all the housing inventory which is currently in the default pipeline were unleashed, it would rip off any floor below the US housing "recovery" which is not a recovery at all, but merely a subsidized bounce, as millions of units are held on the banks' books in hopes that what limited inventory there is gets bid up so high the second housing bubble can be inflated before the first one has even fully burst.
Naturally, two concurrent housing bubbles can not happen, Bernanke's fondest wishes to the contrary notwithstanding, especially since as shown above, US households do not delever unless they actually file for bankruptcy, and in the process destroy their credit rating for years, making them ineligible for future debt for at least five years. It is thus safe to say that all the other increasingly poorer US households (who are not getting paid more as we showed this morning with the chart showing Y/Y change in US household earnings) are merely adding on more and more debt in hopes of going out in a bankrupt blaze of glory just like everyone else: from their neighbors, to all "developed world" governments.
And why not: after all this behavior is being endorsed by the Fed with both hands and feet.
Source: NY Fed
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I am Barack Obama and I approve this message.
You know at first I would curse the banks for their evil lending practices... But you know, I can only understand their position. The muppets are fully to blame for such a situation. Morons who did not prepare or think twice. They simply live with their heads up their asses and hands in the next guy's pocket- I can only agree with controlling or killing the muppets. They are useless morons who literally strive for nothing and expect everything.
http://www.youtube.com/watch?v=-0TSa-jpAmU&feature=BFa&list=PL1766AE15B0...
Let the Muppets vote for their puppet presidents, and everyone with half a brain will leave the US.
First, let's kill all the Muppets.
How about we start with "Muppet of the Universe"?
So... do those defaults show up in the MBS world, or has Benron papered over them in an effort to keep the debt from being extinguished?
In the interim, the banks & financial best friends forever of the New York Branch of the Federal Reserve are deleveraging by selling their most toxic, septic assets to the Federal Reserve for mark-to-unicorn (MAU) prices...
...such a sweet deal for bankster CronyKomradeCapitalists.
The Bernank is the great socializer of losses and toxic assets the U.S. has ever known!
so much for the MYTH that Americans are paying DOWN debt in record numbers...
Yes. The reality is you are paying dowm for them.
And this phenomenon shall be known as the Donald Trump business model.
Great analysis. Shows the complete futility of everything done in the last three years. 20 more and we'll be in the same shape as Japan.
Wrong, in a couple of years we will be like Greece and Spain, with some guns, looting and burning added to the mix.
No- you won't. Japan is an old society with at least 2 millenea of history. We are a multi-racial country of 300+ million that may break apart along racial lines.
OT -
If at first you don't succeed in destroying the U.S. (and global) economy with a heavy dose of fractional reserve monetary retardeness, bring in the thermof*ckingnuclear warheads, bitchez:
10-15 20:39: Fed's Williams says Fed might expand purchases to other assets
And China waves the big middle finger at the Bernank (per Hilsenrath's Bernanke scripted leak/WSJ article).
10-15 21:45: CNY will not enter a new round of strengthening, according to Chinese Press
#CorzineWinning
"Japan is an old society with at least 2 millenea of history."
In the "old days" the Japanese had the honor to commit seppuku (hara-kiri) BUT WE DON'T HAVE THE GUTS (PUN INTENDED)!
bankruptcy is the new liberty. i can see it now the bankruptcy bell,
bankruptcy hall, give me bankruptcy or give me death.
Do whatever you have to to free yourself from the chains of debt.
They had also a lot of civil wars... But keep it a hush hush, it would come as a counter example to the 'american' whim about the benefits of uniformizing the world.
They had also a lot of indoor plumbing... But keep the flush hush, it would come as a counter example to the Chinese citizenism citizen whim about the benefits of AnAnonymizing the world.
This is what should have happened at light speed along with the banks during the early phases of the financial crash. If we had let it "crash" I suspect homes would be half price, debt eliminated and we would have a real recovery in place...even in the face of idiotic tax plans like Obamacare.
I agree with your point, but I wish Obamacare were just a tax plan. It will put a select few from the FED in control of every aspect of our lives. There is no behavior they can't justify controlling/banning. Every decision you make will affect your body and thus the cost of healthcare in the US.
Yes, you are so correct! National healthcare is the back door to ruling all of your life. Now, everyone in the country has a say in what you get, don't get and what you should do for the "collective" good. You can get taxed or fined for being too fat, not taking your meds or perhaps missing an appointment. Obamacare is probably designed to fail as it is a generally incompetent plan. The last phase in true national healthcare under control of the government that loves and cares for us.
I live in a upper middle class area. I can safely say that after talking to many people in my area, not a damn person is able to really pay down debt. At least not without giving up standard of living. Rather, folks are in a holding pattern... they are banking (no pun intended) on the low rates and waiting for a better tomorrow. The only thing that is going to force them out of hole is exactly what will kill the economy.
Like a turd that won't go down when a bankster flushes.
.
Alas, alas (triple alas minus one), such are the problems inherent to the eternal nature of US of A 'American' citizenism. Such a troubling event would never manifest itself in AnAnonymously orthodox Chinese citizenism nations.
I admit it, I am a deadbeat, or the Donald. Filed 2 years ago as my business was crushed. 230k in credit card debt bye bye, 1st and 2nd bye bye but I still live in my home of 24 years as I was current during bk. Now I don't pay the 2nd, plan on making them a deal soon as they have no equity like me. 4 1/2 yrs from retirement and I plan on coming out on the other side not being a burden to my kids. Checks in the mail.
And don't believe there is no credit after BK, start rebuilding early, I have 3 cards now although I kinda dig the whole cash thing I've been on for the last 5 yrs, no real balances.
And what's not to like, the whole proceeding lasts about 90 seconds in an auditorium where you're lined up like cattle, you swear in, verify this that, ID, thank you bye bye come again. Take the wife to lunch, stress goooooooone with that pile of bills. I would do it again in a heart beat if the situation arose. My credit score is now 670.
...
what you did was exactly how a debt based economy works. not all debts can be paid by the very nature of the system we work in. congradulation on playing hte game the right sound legal way. damn it feels good to be a gangsta!
The gangsta part was I declared some pink sheet .09 cent stock, 25k shares that were worthless. I couldn't sell them to save my soul before bk, brokers wouldn't touch them. Trustee didn't want them either. Year later stock ran to $2.50, mine now ! That's gangsta !
Maybe you can get a job as a paid shill.
http://the-tap.blogspot.com.au/2012/10/confessions-of-ex-shill-theyre-re...
(please ignore this message if you already have such a job)
Funny.
Can't blame you, no different than the banks or the corporations or the government.
Give them their own medicine and see how they swallow it.
Hey Timmy, Ben, Hank, Bush and Obama, CONgress, Supine Court, Lloyd, Jamie, and all the other clowns...how you like the circus!?!?
Popcorn please.
Three bullets...One, Two, Three MAU! MAU! http://www.youtube.com/watch?v=BPi2AetitZc
choke on BK, bitchez
Some bizarre stuff going on. I see lots of obvious illegals driving around in brand new Gubbermint Motors trucks.
That's gonna end well....
We're safe until there are machine guns mounted in the truck bed.
Not really.
http://www.wral.com/spring-lake-men-face-rape-attempted-murder-charges-in-17-year-old-s-shooting/11661000/
pods
Obama phones and Obama trucks, with walking around papers signed by Romney.
That's right, Romney, bitchez.
Same guy, different tan.
…..illegals driving around in brand new Gubbermint Motors trucks.
Really, how is that possible? They paid cash? Got a loan? Illegal immigrants can drive around in a brand new truck but you can’t?!? Sounds like they’re more resourceful than you; maybe 10 of them working 16 hour days doing the work that nobody else will do paid for the fucking truck.
Wanna gut chickens for 10 hours a day …. Yeah didn’t think so. Wanna lay sod until 9:00 at night ..oh don’t want to do that either ……… Well just how are you going to get YOUR new truck?
So they bought a truck and are contributing to the economy and paying sales tax on it etc, etc. GOOD!!! JFC
Soooooooooooooooooooooo, you think that those illegals bought those trucks from the dealer lot....paying sales tax.....and local taxes.....dealer comissions......delivery charges.....upgrade......bwahahahahahahahha, you're a f'ing fool. Straight m'f'ing cash homey.
Maybe you don't realize what web site you are on???? Once the currency is ruined and people realize they're "middle management" skills are completely worthless, laying sod and gutting chicken jobs won't stay vacant more than a day. Wake up moron.
So you mean there is a way to buy a new truck without paying sales tax, commissions, delivery charges, no profits for the auto workers and auto companies and they get upgrades and extras without paying for them – damn, you’re right, I must be a moron.
And yes, I do know what website I’m on. I once use to think like you.
Awesome comment Taint Boil. Frankly I've got way more respect for most "illegal immigrants" than for most American citizens, mostly for reasons you allude to in your post.
They "bought" that truck on 27% p/a credit, GMC securitised the debt into 'AAA' bonds and sold it on (with a little fee on the side to some wall street crooks) and the sucker of last resort, the FED, will be buying them bonds as soon as they default. Win & Growth all around
Some people got a new car, everyone could do the same right now. What's not to like?
omigod lmao! great response
perfect opportunity with the million muppet march......we could throw wads of chewed gum on them and then they would be all stuck together in a million muppet furball!
Rut roh...
Muppets, otherwise known as lemmings, kill themselves.
The American Way of Life is non-negotiable.
Until it isn't Spinone
Only until the dollar is non-negotiable.
Going into 2008 my debt was only half of what my real estate was valued at. I did not think I was doing risky behavior, but it fell apart anyway, and I had to default on a mortgage and some credit cards. Lots of people over the past 4 years have had to default even though they weren't muppets. Maybe some of the earlier ones to default started in a bad place, but the values have droppes so much and many people have been laid off since then.
For those on the "foreclosure stuffing" thread who don't have a clue and posted a response to this by me:
"To add to that, down the road when the bank forecloses and sells the house if the bank so chooses they can drag you into court and get a judgement against you for the difference you owed on the mortgage to them and the price they sold the house for. It is no different then defaulting on an auto loan. Even if the bank doesn't go after you for the difference the IRS will expect you to pay taxes on the difference if the bank doesn't make you pay it since the IRS views that as a capital gains and tax you accordingly."
try reading this:
http://www.smartmoney.com/taxes/income/the-taxing-consequences-of-short-...
I am George Bush Junior, I signed the paper that started the endless bailouts and I do not recall that particular piece of information.
HOLY SHIT!
Dalton McGuinty just quit leadership of the Ontario Liberals. They are going to get destroyed. Just released 10 minutes ago.
http://www.ctv.ca/
was he traded to the leafs?
Nope he just up and quit.
This is really bad. Something big is coming because the Ontario political rats are running for the hills.
Could it be Justin Beiber or Justin Trudeau, keep getting them mixed up
Lets not forget that the 110th and 111th senate and house majority were controled by the Democrats... Thats 8 years of control...
Love how people forget that shit... Guess who starts a bill?
Incase you dont know the answer...
http://youtu.be/tyeJ55o3El0
Bill's mother.
and Bob's your uncle.
More blue team / red team nonsense.
I quit and joined the gold team.
Nope, just facts that people like you conveniently ignore.
I blame all of our problems on the Senate and Congress. Again... who were controled by the Democrats.
And thats a fucking fact.
http://en.wikipedia.org/wiki/110th_United_States_Congress
Senate Majority: Democratic Party (coalition) House Majority: Democratic Partyhttp://en.wikipedia.org/wiki/111th_United_States_Congress
Senate Majority: Democratic Party House Majority: Democratic PartyIf you think democrats or republicans are the problem, you don't know who the real enemy is.
The MSM. Without their complicity nothing is possible.
It's all about financing. Ther hand that giveth is greater than the hand that taketh.
What hand does the MSM take from?
What hand do the politicians take from?
Is it the same hand?
"Know your enemy."
~Sun Tzu, Art of War
Sun Tzu, Art of War, is an overrated ancient text. Ask the Japanese how well it worked against them.
a cursory search didn't return much and i'm lazy, what are you referring to
I woke up and saw the enemy, and the mirror almost broke :)
You are a fucking moron and the reason nothing will CHANGE, since having been on this site for over a year you are still drinking your red koolaid.
They all work for the fucking vampire squid whether they know it or not.
Lobbyist hacks?
pods
Hi my name is slick willy and I did not have sex with that woman, nor did I inhale, and it depends on what your definition of "is" is. but I did sign the repeal of Glass Steagal, and doubled down on community reinvestment act to hand out mortgages like candy at halloween.
Which were handed to him by a Republican congress.
It's not red v blue, tools. It's the people you'll never meet v the rest of us.
hey genius...CRA did not apply to Wall Street investment banks which were responsible for 80% of all subprime.
Federal housing data reveal that the charges aren't true, and that the private sector, not the government or government-backed companies, was behind the soaring subprime lending at the core of the crisis.
Subprime lending offered high-cost loans to the weakest borrowers during the housing boom that lasted from 2001 to 2007. Subprime lending was at its height from 2004 to 2006.
Federal Reserve Board data show that:
The "turmoil in financial markets clearly was triggered by a dramatic weakening of underwriting standards for U.S. subprime mortgages, beginning in late 2004 and extending into 2007," the President's Working Group on Financial Markets reported Friday.
http://media.mcclatchydc.com/smedia/2008/10/13/16/647-20081013-ECONOMY-s...
can you fog a mirror?
Read more here: http://www.mcclatchydc.com/2008/10/12/53802/private-sector-loans-not-fan...Social Security, another deceptional bailout, was conceived way before Bush. Bailouts are about control. You need money? Okay, I'll loan you some but here are the conditions.
Once you understand that, you'll understand how BOTH parties are at fault through liberalism. There are no conservatives in the republican party. Oddly enough, various types of SS were attempted as far back in Greek times and unsurprisingly enough, they failed.
You mean if you don't have a JOB you can't pay down debt???
John Maynard.. WTF????
Oh, well shit, then we lower rates.. That ought to stabilize things.
This is true but what’s happening takes a different twist. They didn’t have paper money those days, not that we have it now. Legitimately, the paper we use should be certificates redeemable into a commodity as the holder wishes. Historically the paper was convertible into silver or gold. The holder owned whatever amount of silver or gold his certificates represented. With the introduction of the Federal Reserve everything changed. Federal Reserve NOTES (FRN’s) are just that, NOTES. They represent a debt to the Federal Reserve by the holder. In a way their the same as credit cards. Regardless that paper has to have a commodity backing it up, be collateralized, or it’s counterfeit, which is what the paper they’re printing is. All the collateral that was used to is used up. All the worth of America has been collateralized against paper money. We’re already broker than Rome was. They found a solution. Use oil (Black gold) as the commodity to back the dollar. The dollar is the world’s sovereign currency. All they have to do is make any trade with oil done only in dollars. Oil countries agree to this for it to work. Iraq and Libya didn’t and look what happened to them. Their sights are on Syria, Iran and Russia and any country that won’t step in line, China forinstance. Countries pushing for a new Soverign currency are pushing for America’s collapse. They don’t like doing business with counterfeit money and that’s what the “In God We Trust” country is forcing on them.
Collapses & coups have happened throughout history for the same reasons over & over: greed & corruption. We’re facing the same today no matter who wins this pathetic election. So, this leaves us with the same choice. Face collapse or overthrow the current gov’t. It is our right to do so! If any gov’t is not working as intended for the good of the people, it needs to be replaced. We all know it, but don’t have the guts or plan to do anything about it. The power resides with in us, but unless we take action, we face our own demise.
You do realize, Chupacabra-322, that you're on ZeroHedge, and that 99.99% of us already know everything you just said?
ROFLMAO!
CHART SHOCK: 8 Million Quit Labor Force Under Obama
WHAT THE FUCK IS THIS SHIT ? I turn my back to read my telepromter and....who the fuck is escape key?
thing a ma jig
Debt default is the fiat killer. When you default, all that money that was created for your loan now has no demand on it. Now the Fed is creating that money twice by buying the loan from the bank. My thesis here is Bullish.
bravo
I'm making Italian tonight.
Don't you know austerity is bad for you?
We are having gyros in celebration, oopaaa!!
Bullish for what? Collapse?
Bullish for anything that is not fiat.
I agree. If everyone defaulted these cocksuckers would be on their knees in a New York minute.
Debt default is the fiat killer.
If everybody defaulted they'd set up FEMA Debt Camps faster than you could say "Get on the train."
With what? The money would be toilet paper. And we still have guns, hello.
Where will your food and energy come from?
Food and energy come from paper?
Shit. News to me.
Food and energy come from the collective controlled by the party. I'll have comrade Napolitano explain it ot you.
"Food and energy come from the collective controlled"
And when the collective changes, it will be explained to you.
In that event, I wonder how many of those prissy-ass government leaders would have to die before the rest cave in and flee the country? Of course we'd be on them for life, like the nazi-hunters. Fair game.
Po-lice have more, bigger, guns.
Nothing the cops like better than the opportunity to shoot up some subversive elements. Its like Christmas come Early. They will even be getting some more riot gear and high-capacity mags for enhanced collateral damage based on the reporting of the brave law-enforcement facing all of them crazy, goat-sacrificing, "people with guns"!.
There are more gang members alone in America than there are officers and secretaries and mail room clerks in all of the alphabet soup police agencies in the United States combined. True story.
The roll of the dice is whether or not the military is called into quell social unrest, and what percentage obey.
Sure, but what can that lot do - apart from Blue on Blue and random driveby shootings?
The fact is that several veterans, which all had guns, years of training, experience with being shot at and shooting back, in a hostile environment, were shot and killed by the police, with Zero casualties on the law-enforcement side! People without military training and actual experience of real firefights will not do any better, they will do worse.
You mean FEMA Death camps, right?
No Debt. You can't pay back if you're dead. Think gulag. White sea canal. That sort of thing. Just imagine. Jobs return to America. Double plus good.
Our mortgage was paid off in Sept! $150K of FRNs has been extinguished multiplied by the fractional reserve...
Glad we could be of some assistance!
You are correct in more than one way. Banks do not actually make money out of thin air. They generally loan it against something like a home. So, when a bank lends you $300k for your new home (having $30k in reserves) then $270k has been created in credit and in essence the FRN's are a debt note against the home. If you put $60k down in equity the trade is pretty solid. There is $210k in new money ($300k -reserves and down payment). It is a way of matching up money to real products. As such, fiat can hold it's value relatively well.
When you start defaulting and price discovery puts the home at only $150k then fiat is truly destroyed. Balance sheets go crazy and reserves get thrashed.
http://www.oftwominds.com/blogoct12/Fed-money-laundering10-12.html
Charles Hugh Smith did a fine job of explaining this to the average guy. I printed it all out and put it on the wall of my moldmaking company's building. I even donated again to him (CHS) for coming up with such a well written explanation for my muppets. Not one gave a shit so I took it down, rolled it up as a scroll, and placed it into the hand of my youngest employee. I spent half of an hour with him on his Onerous Debt. He has made some foolish choices in his life up to now but I had to do something for him to get him to reject the load of crap that he seemingly believed. There is hope for him from me, and his level of hope for himself went up substantially.
He did come around fairly quickly and then asked enough questions for me to see that he gets it.
You all should take some time off from internet complaining and do some prosetylizing for freedom on a personal level.
All the cool kids are doing Chapter 7.
Not sure why so many people with zero assets even bother with BK. Unless they have something to protect it's just a waste of time and money.
They(cc,medical peeps,etc) eventually garnish your wages....say for instance you have $80,000 in debt...it only costs $1,300 to go chapter 7 and the debt is wiped (assuming a low enough wage bracket to qualify for chapter 7). Only thing you lose is ability to borrow for a few years.
I didn't consider garnishments - then again, I didn't consider these people would actually have jobs...
Garnishments *can* happen in most states, but they are by no means certain. My book "Debt Hope: Down and Dirty Survival Strategies" explains what someone with money trouble needs to know.
In the great failed state of cauliflower, garnishments are a way of life. I get a minimum of two per day for various employees. They range form Motor Vehicle registrations and child support to tax levys.
I cauliflower, even BEFORE a garnishment, the great state will seize your bank account and any other liquid asset in the system via levys. Banks comply by freezing your accounts.
I draw every dollar I have each payday for a number of reasons, to prevent the bank from re-re-rehypothecating my money, to avoid a bank run in advance and, most seriously, to minimize the amount the state could possibly seize.
Those Obamaville's should be renamed to Orwellvilles. It's 1984 for the next forty years.
This is why they are going to get rid of cash and go all digital.
They will outlaw precious metal transactions too.
It's wrong, but when did that ever stop them?
Several states don't allow wage garnishment except for child support/alimony, taxes, and student loans.. Among them PA and TX.
Actually, it looks like TX is the place to be to default on all your shit:
http://www.nolo.com/legal-encyclopedia/texas-wage-garnishment-law.html
That's surprising. I would've guessed Texas would have been one of those "take personal responsibility" states.
Texas & Florida are both debtors' paradises.
Its true, we believe in second chances to third party creditors. Because scoundrels (and worse, like OJ) abuse our good graces, is no reason to obliterate the line of law between liberty & obligation.
And I take no personal offense in your attribution TIS, don't misunderstand...its just that others might get "ideas". We look down on those who game it...they're usually..."not from round here" ;-)
Disclaimer: I have never filed for personal or corporate bankruptcy and live my life in such a way that I never intend to...that is called responsibility.
No offense taken.
I was speaking in the legal, technical sense, and not remarking on the attributes of either Floridians or Texans.
I know...and none taken here, mine was meant for "öthers" unfamiliar with certain state laws.
We're cool TIS, always have been ;-)
Well, I spent twelve years serving in bondage in the Redneck Riviera. Let me tell a few things that occurred back in the early 80's.
Job...I was basically a peddler back then. I sold insurance door to door on an old style weekly premium debit. Port St Joe was my base and I worked the black people in St Joe and Wewahitchka. Even then segregation was rampant, I would go every other door while another guy worked the white people next door. Dumbest damned thing I ever did. Oh, I was a white kid about 22 at the time working for the Independent Life Insurance Company. I was pretty good at sales, really good actually. Made the top 1% of the company and believe me I didn't have a pretty face (still don't). I was busting my ass.
Once I got to the top of the chain. Things changed suddenly, I was written up for not going to sales meetings (I was actually making sales), I had a couple bookkeeping errors (total $20), and suddenly I was let go and my boss took my route.
Well, shit. Get another job. I started working for Wholesale Foods selling pizza products. Did a similar job on sales. I was the number one sales asshole in the entire company for four months straight after two years. My route grew from three grand a week to twenty five grand. Suddenly I started getting write ups about a dirty warehouse (scrupulously clean, but a case of sauce was on top of a case of mushrooms), but the mystifying capper was being accused of not depositing collections on a daily basis. I spent a night a week in another town because my sales volume had grown so much. But it turns out that what used to be Bay Bank in Panama City wasn't crediting deposits each day if they were made at remote locations. I had no idea. Anyway, I get fired, boss takes my route.
Take another sales job. Working for Steward Sandwiches. This time the firing is a little different. I grew the route, made decent money for white trash, and was the company boy wonder. Somehow my wife got knocked up with our second kid, and I called to tell them that I would not be in to work because I was going to be in the hospital with her for the delivery. Three people showed up in the hospital, I think one was the EVP. They demanded keys to the truck, my receipts and cash and, oh, by the way, you're fired. (What a corporate culture!)
In between this shit, my wife took it upon herself to acquire various things. One that left me absolutely stunned was a car. She had gone to the dealership and, in front of the salesman, signed my name on the purchase agreement. At the time, and I was unaware of it, that was perfectly legal.
A yar later we left for the great failed state of cauliflower, where I grew up, becaue I KNEW that the educational system there was state of the art. I couldn't face another arguement with the school board that not only my son should be held back, but that his teacher should be sanctioned (Florida implemented teacher standards back in 1988. Teachers took a test and 90% failed. The State of Florida immediately lowered the standard so that 90% passed.)
In the south, at least in Florida back then, if you're not a home-grown, good ol'boy, you weren't shit. I learned that lesson multiple times the hard way.
Additionally, there are debt statute of limitation laws for each state. Texas ain't bad, not the best but not the worst. I believe the clock begins with the consumers last activity on the debt but I'm not an attorney. Payment, charge, correspondence, etc.
http://www.bankrate.com/finance/credit-cards/state-statutes-of-limitatio...
A lot depends on income. The WSJ did a piece about doctors taking a bath, and coming out with all their credit cards and borrowing power pretty much in place. NOT a level playing field. Lot's of ways to game the system.
Well, Texas is great for debtors because they can own a 30 million dollar McMansion, and it's absolutely sheltered from creditors-- even judgment creditors (except for the government, of course)-- as long as they claim it as their primary residence.
Thats exactly why O.J. used every dollar he had to buy a residence in Florida. He tied all his money into his "protected" house so that the civil suits couldn't wipe him out. Then, you borrow against the home to fund your life. Just one catch.... You just have to remember not to use a weapon when going to retrieve your old sports memorabilia. Armed robbery is a bitch.
BK is not a waste. The stress before BK is overwhelming. Bills stacked up everywhere, notices arriving everyday. BK makes it all stop. It is a beautiful thing when all the mail and calls just stop. You feeel you can restart your life. I've not done BK, but have helped people completely paralayzed by their situation.
QE put a floor under the equity markets, Shit they doubled them back to where we are. Maybe they think this foreclosure stuffing will have the same impact on housing. They are so screwed. The illusion of a recovery is only going to piss off people who will demand higher interest rates. This whole thing is so desperate. It's gonna be a fucking mess when it unravels.
We're talking hundreds of pounds of spaghetti being thrown against the wall in the hopes that one noodle sticks. I'm not cleaning up that mess.
I think they do believe they can put a floor under the housing market. Could the banks hold all those millions of houses off the market without Fed QE? I think not.
In my parts, housing prices are fantastically high relative to average incomes. Median house price has been $250k since 2007 with no drop whatsoever, and that includes townhouses and mobile homes (of which there are many in the rural parts of the county). Median detached house price is $302k. Average income is $44,614, resulting in a ratio of the median house price to average gross annual income of almost 7:1. That's insane, and as a consequence I have just been saving to buy outright, but probably not in this county!
As far as I can tell, the main reasons for this ridiculous state of affairs is that the county seat is a state college town with too many effing PhDs, and lots of money flows in from corporations and also (amazingly enough) the athletic departments, especially football. It boggles my mind that so much money and energy is poured into such meaningless endeavors. I'm not knocking sports or athleticism, but college sport is an oxymoron.
I very much agree with you that this is going to be a big mess when it unravels, and it will. I keep thinking about what Dmitry Orlov had to say about all the things that make America so much less prepared than Russia for when the collapse comes. My only hope is that the Mad Max'ers are proven wrong and people rediscover that mutual aid is a far better strategy than everyone for themselves.
The good news is we lead the way.
http://business.financialpost.com/2012/10/15/canadians-deeper-in-debt-than-thought/
Nothing wrong with hoping, just make sure you have a plan that does not depend on hope alone.
That's what the shotgun's for.
+1 geekgrrl. Mutual aid. Prepare for yourself plus a couple of other good folks who don't see what you see. Teamwork will be the new normal someday. Much different than now. The world is more likely to become much more local before it reaches again more global. Much pain between now and then... more so for those who refuse to accept to changes that inevitable... or those who are caught in the crossfire. Is the crossfire I worry about more than anything else.
That;s about the same here in Lafayette , La housing going for $145+ sq ft and average income is mid 40's been looking for a home and I am like what the fuck?
New construction- 1600 sq ft sought after development was sugar cane fields just a few short years ago
RESIDENTIAL - DSF - Click photo to enlarge or view multi-photos.MLS#: L12238525 ListPrice: $233,900 Status: ACTIVE LivingSF: 1,600/B Address: 225 CRENSHAW List$/Sqft: $146.19 LAFAYETTE, LA Bedrooms: 3 Zip: 70508 BthFull/Pt: 2/ Parish: LAFAYETTE Stories: 1 Area: (O) O YrBlt/Age: /PropConst MapPage: 679 Key:M Subdiv: MIRAMAR Zoning ParcelID: Style: Trad ElemSch: MILTON Middle: MILTON High: COMEAUX Dir: KALISTE SALOOM TO E BROUSSARD,LEFT, TO 92,LEFT. MIRAMAR ON LEFT.CRENSHAW IS IN PHASE TWO AT BACK OF DEVELOPEMENT. Lot: 207 Legal:
PROPOSED CONSTRUCTION IN SOUGHT AFTER DEVELOPEMENT. LOCATED IN CUL DE SAC AT REAR OF SUBDIVISION WITH PLENTY OF PRIVACY. LARGE ROOMS, POSSIBLE ENTRY TO BACK YARD FOR BOAT. THIS IS A PROPOSED CONSTRUCTION AND IS SUBJECT TO CHANGE WITHOUT NOTICE. PLEASE CALL CHRISTINE TO POSSIBLY CHOOSE A FLOOR PLAN AND CUSTOMIZE YOUR PERFECT HOME.
LowerSqFt: UpperSqFt: PorchSqFt: CarportSqFt: GarageSqFt: StorageSqFt: TotalSqFt: SourceSqFt: BLUPRNT AssnFee: R/Y AssnFeeAmt: 0 AssnFeeIncl: Other:SeeRemarks Warranty: LotDim: IRREG. Acres: MinrlRghts: CONVEYED
Room Type Lvl Dimnsns Constrc: Brick Siding: Brick Parking: 2 Car Garage Fndatn: Slab Roof: CompShingle Heating: CentralHeat, Electric Cooling: CntralAir Fireplc: 2FP Floors: Brick, CerTile, Carpet, Wood Fence: Privacy, Wood Patio: Covered WatrFrnt: Frontage Wat/Sew: PubWat, CommSew Finance: Cash, Conv, FHA, VA Reserved: Lot: Views Pool: Utilities: E:SLEMCO IntFeatrs: 9+FtClg, ElecDryCn, ElecWashCn, IcemkrCn, MasterBth, Attic Access, Walk-inClost, CompNook, CrownMlding, VrdClgHts, Sprt Shower Applncs: CooktopElec, Dishwsh, Disposl, Microwv Equip: CableReady, CeilingFans, GargDrOpnr, SmokeDet, Whirlpool, SecSysWired Exterior: Lndscpd, OutsideLight, Porch Amenities: Misc:--Information deemed reliable but not guaranteed--Copyright: 2012 by the REALTOR® Association of Acadiana
I work in a collision center for a GMC dealer , have a few hundred trucks just sitting in the back lot with a average price of 40k
Debt, at every level, will be this countries undoing.
You forgot to add "by design."
What's it say on the back of "my money" again?
Oh yeah, "Annuit Cœptis" & "Novus Ordo Seclorum."
...and the FED will own them all.
to Serfdom, "Well HELLLooOOO !" - Seinfeld
"In the land of Mordor, where the shadow lies."
Funny how more relevant TLOTR becomes each day.
Adding yet more stock to the "Shadow Inventory"?
At the present "consumption rate" I wonder how many years' worth of stock is really available (but hidden so as not to "distort the Market")
First the Housing Bubble, now the "Shadow Inventory" bubble. Wonder what's next . . . .
I've been searching for a smaller home since my family is shrinking... amazing what older trash 2bd rm 1 bath homes are for sale ~ $90K range... many of them have structural damage and need to be torn down for I doubt that an occupancy permit would be issued for any new owner.
and, cash offers do not seem to effect the selling prices. They are stuck at 90K and will not budge.
Meanwhile, me and the two cats occupy our 4bd rm 2 1/2 bath home that we have lived in since 1986... fortunately it was paid for long ago and was not ATMized.
Another kicker... I will pay more in property taxes if I move into a smaller home since I am grandfathered into the tax rates on this place...
I am about at the point where I say to hell with it and stay here... and the cats like it here.
Since you have an extra bedroom...mind if I rent...though I have a dog.
And if the SHTF, you can eat the cats. LOL.
They can go out and hunt mice and birds for you to eat. Eating the cats would be stupid.
My cats catch rabbits and squirrels (admittedly small ones) - Cook! Where's my Hasenpfeffer!!
"First the Housing Bubble, now the "Shadow Inventory" bubble. Wonder what's next . . . ."
Bulldozers.
So, cut off the Fed's hands and feet?
It's worth a try...
Pirates seem to do very well with the loss of an appendage or two. Take out an eye and the Fed can be even more myopic (if that's possible).
Hmm, not a bad plan. Hide my assets first, then rack up 200k in debt on the credit card buying physical gold and silver. Then declare bankruptcy.
I LIKE IT!!
The FED will be the largest landlord. What happens when all these abandoned and foreclosed homes get trashed or burned to the ground eh? Will the FED actively try to eject people? It's nuts. The FED should not be in the business of managing real estate.
Don't worry, the Fed will just buy up the majority of these foreclosed homes and sell them back to big banks at a fraction of the cost.....who then will rent out these homes at 30% interest.
With those type of profit making schemes, DOW to 20,000......bitchez!
Setting up rental managment firms to service the banks will be a growth industry. All you have to do is go around each month and collect the rent.
That's the part about it that always had me flummoxed... The idea that someone has the authority to print money out of thin air, & in the end, they either get the cheese from interest payments, or, as you say, they end up as landlords... (without lifting a finger)...
I guess it's just me, but I have a vile hatred for [types] who engage in this enterprise...
All with the stroke of a pen (or typing of keys)!!!
--Josiah Charles Stamp; (June 21, 1880 - 16 April 1941)
Industrialist, economist, statistician & banker. He was a director of the Bank of England and chairman of the London, Midland and Scottish Railway.
Banking is a legit and I daresay even RESPECTABLE profession, when it isn't colluding with the government to prevent any threat of failure or loss.
The fact is: there is *clear benefit* which can be realized through the use of finance, and proper risk-assessment for lending is a challenging task. Banks are the primary industrial players in the "market" that sets interest rates.
It's CENTRAL banking and/or bank control of political power which turns it into the greatest swindle ever.
The reckless pursuit of the "sure thing." The "guaranteed return." Is all about controlled risk. Zero risk preferred. Now, everyone is in on the game. Which means the game is over.
Funny story... back on 07' a friend of mine suggesed he was going to flip houses for some money. in retrospect, it was a sure sign the housing market was cooked. The other day, the worker at 7-11 I see all the time went into a complete rant about his rising cost of living despite the bullshit reported figures of inflation. I walked out thinking to myself... did I just experience another moment of recognition?