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Guest Post: Housing, Diminishing Returns And Opportunity Cost

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Submitted by Charles Hugh Smith from Of Two Minds

Housing, Diminishing Returns and Opportunity Cost

It's not about "saving" housing, it's about saving the banks.

The Fed's policies of keeping interest rates at zero and buying mortgage-backed securities are intended, we're assured, to bolster the housing market by making it cheaper for buyers to borrow money. With mortgage rates under 4% and a trillion (soon to be two) dollars of dodgy mortgages transferred from the banks' tottering balance sheets to the Fed's wonderfully opaque balance sheet, then this appears plausible. But of course it's all a PR ruse, like everything else the Fed says.

If the Fed wanted to "save" housing and not the banks, why not buy mortgages directly from homeowners? Instead of buying underwater mortgages from the banks, why not just buy the entire $10 trillion of residential mortgages outstanding and charge the homeowners the same rate the Fed charges banks, i.e. zero?

The Fed's goal is not to relieve debt-serfdom, it's to enforce it. The entire purpose of the Fed's policies is to ensure homeowners keep paying interest to banks for the rest of the lives, and to encourage those who are not yet debt-serfs to join the serfdom with a "cheap" mortgage.

How did that work out so far? Hmm, 31% of all homeowners are under water, owing more than their house is worth:

The Treasury has also been part of the debt-serfdom enforcement, as it bailed out Fannie Mae and Freddie Mac, not the borrowers who pay interest on Fannie and Freddie-backed loans. FHA has stepped in to fill the gap left by the implosion of Fannie and Freddie, and so government subsidies of the mortgage market are running at full steam.

As Lance Roberts brilliantly shows, dumping trillions into housing/mortgages has yielded diminishing returns. Q2 GDP - Nothing Good Happening Here:

I just want to dispel the whole current myth about the importance of a housing recovery relative to the economy. At one point in our history, housing was a very important component of economic growth, currently at a mere 2.6% of GDP, that is no longer the case. So, while we spend billions upon billions of taxpayer dollars trying to bailout homeowners, forgiving bankers of their criminal misdeeds, and not dealing with defunct government agencies all in the name of saving the economy - in reality it has very little effect.

Saving the banks by dumping trillions into housing is classic marginal return. Since the mechanism is broken--housing as the "wealth effect" generator and the source of billions in profits for banks--every $1 trillion in subsidies, give-aways, guarantees and mortgage purchases by the Fed yield fewer benefits to the real economy.

For example, how are those 3% down payment, low-interest FHA mortgages working out? All praise to the new subprime – 1 out of 6 FHA insured loans is now delinquent. Yup, defaults are rising and the taxpayers will be bailing out the banks once again to the tune of tens of billions of dollars.

This raises the question of the opportunity cost of squandering trillions on mortgages and banks: what else could the nation have done with those trillions? Something with a higher return, perhaps, such as upgrading the nation's electrical grid? Something that actually generated sustainable growth because it was a high-yield investment and not a bail-out of fraud, friction and malinvestment?

Once again the question arises: rather than loan $16 trillion to banks at 0%, why doesn't the Fed just buy all residential mortgages for $10 trillion and charge 0.25% interest on the lot? That would cut out the banks, and that is the point here: the Fed's policies are not aimed at "helping housing," they're aimed at protecting the banks' income streams, assets and political power. Since the banks own $10 trillion in mortgages, housing is a key concern of the Fed's "save and enrich the banks" campaign.

Here's the Fed's policy in plain English: Debt-serfdom is good because it enriches the banks. All hail debt-serfdom, our goal and our god!

 


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Fri, 09/21/2012 - 14:36 | Link to Comment neptunium
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<----- All things considered, we are royally fucked.

<----- This isn't half as bad as it looks. They'll work it out.

Fri, 09/21/2012 - 14:43 | Link to Comment neptunium
neptunium's picture

Once again the question arises: rather than loan $16 trillion to banks at 0%, why doesn't the Fed just buy all residential mortgages for $10 trillion and charge 0.25% interest on the lot?

 

It would also have the added benefit of making property ownership and moderate housing investment attractive again.

Fri, 09/21/2012 - 14:58 | Link to Comment exi1ed0ne
exi1ed0ne's picture

0.25% or 3% - makes no difference if you have no job to pay for it, it would be highly inflationary, and the banks would be instantly in the hole due to finite properties supporting unlimited debt. (asset suports debt which creates asset that supports debt which creates asset which eventually leads to turtles all the way down)

Fri, 09/21/2012 - 15:25 | Link to Comment LMAOLORI
LMAOLORI's picture

 

 

Everyone has to have a place to live what this is doing is providing rentals for the plebs via looted assets from the U.S. taxpayers for crony's so it will help the banks and wall st. investors. When Austerity kicks in after the elections you will probably get some more low paid jobs that you will have no choice other then to work at unless you want to live in the streets or have prepared otherwise.

flashback a few months ago

Warren Buffett: I’d Buy Up 200,000 Homes, Houses Better Investment Than Stocks At Today’s Rates

About 6 million borrowers will lose their homes in the next five years because of inability to pay their mortgages, creating demand for as many as 4 million new rental households, according to Scott Simon, head of mortgage bonds at Pacific Investment Management Co. in Newport Beach, California. If funds spend $6 billion on foreclosures, that buys only about 40,000 homes at $150,000 apiece, leaving plenty more for investors of all size to buy rental housing, he said.

Fri, 09/21/2012 - 16:32 | Link to Comment exi1ed0ne
exi1ed0ne's picture

This crisis (manufactured or not) has done is to fundamentally change how housing is viewed. Good or bad, mobility is now more valued then home ownership. The ramification of this shift is beyond the ability of most people to realize it's importance.  We are becoming a society of gypsies, not tied to geography or community, with an even further compressed time horizon of decision making.  I know I'd personally rather rent a house than buy one.  One year contract at a set price, vs 30 years?  Easy math, especially with the reality of having to go where the work is when an area dries up.  Mom and Dad's basement are really the new normal.

Fri, 09/21/2012 - 22:59 | Link to Comment socalbeach
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The article on private equity funds buying housing was good, thanks.  However, Scott Simon's statement was odd.  If millions of borrowers lose their homes, there will be extra demand for rental houses, but if investors purchase the lost homes there will also be millions of extra units for rent.  And if an existing renter purchases the home there will be one less renter to make up for the extra renter who lost his home.

Fri, 09/21/2012 - 15:35 | Link to Comment neptunium
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Well you're going to get inflation either way, you also get plenty of banking collapses either way, the difference is that you don't continue to reward the illiquid entities and (just as with homeowners) allow them to fail if they can't sustain themselves in the marketplace. 

The status quo is preventing the adjustment and the longer that goes on the more the situation will resemble that of Greece, which had it been allowed to default 2 years ago would currently be just about the only nation in Europe going through an economic boom.

Fuckem.

Fri, 09/21/2012 - 16:22 | Link to Comment exi1ed0ne
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You are right that we have inflation either way, but currently the Fed has no conduit to get NEW cash to the masses required to replace funds consumed in interest payments.  Well, other than indirectly through federal borrowings that fund assistance programs.  This scheme would be a direct new cash funnel to main street.  That will never happen because new money is stronger than old money, as inflation occurs over time as money circulates.  Can't have Joe Homeowner get the strong money first.  They only get the tired old money that has had all the inflationary bonus wrung out of it.

Fri, 09/21/2012 - 17:55 | Link to Comment rbg81
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I have another theory.  I've been looking at real estate lately and concluded its not a bargain.  In many cases, the property taxes are MORE than a mortgage would be--sometimes substantially more.   As mortgage rates get progressively lower, property taxes get progressively higher.  In some cases, you could GIVE the house away and it still wouldn't be a bargain 'cause the property taxes are so high.  And it may come to that.  Because, you see, low mortgage rates are just a back door bailout to local governments by enabling them to jack up property taxes.

Fri, 09/21/2012 - 22:34 | Link to Comment BlissPoint
BlissPoint's picture

This dude says home ownership is 45% cheaper than renting.

http://trends.truliablog.com/2012/09/rent-vs-buy-summer-2012/

Sat, 09/22/2012 - 04:30 | Link to Comment Parrotile
Parrotile's picture

And once you've "bought" the property (probably just rented the money from the bank anyhow) you're nicely on the hook.

And look at all the VERY nice Retirement plans YOU will be expected to fund for the "entitlement set" - all the Federal workforce, all (cough "working" cough) or your benefit . . . . . . .

Fri, 09/21/2012 - 16:38 | Link to Comment Robbed by Bernake
Robbed by Bernake's picture

Very nice points

Fri, 09/21/2012 - 17:03 | Link to Comment OpenThePodBayDoorHAL
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yeah, endlessly propping up zombie banks has worked so well for real estate and stocks in Japan...LOL

Japan real estate: 70% decline from peak, still dropping (-3.4% in 2010, -3.1% in 2011)

Nikkei: from 49,000 to 11,000

Oops

Fri, 09/21/2012 - 14:40 | Link to Comment crusty curmudgeon
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Welcome to the party, pal.

 “Politicians, like diapers, have to be changed frequently – and for the very same reason.”

Fri, 09/21/2012 - 14:40 | Link to Comment Vincent Vega
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yippie ki yay!

Fri, 09/21/2012 - 15:07 | Link to Comment LMAOLORI
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Right on Crusty this article is like beating a dead horse we all realize the Fed isn't trying to help Main St. but to help Wall St.  and Obama (even the MSM is alluding to the Fed's policies favoring the rich) as someone else said QEternity right before an election DUH

Obama is stealing Wall Street from Romney

Guess Which President Has Been Best for Stocks?

Federal Reserve policies favor the rich

Fri, 09/21/2012 - 14:39 | Link to Comment Stoploss
Stoploss's picture

Bingo. One way or the other, the FED will own every mortgage, wether they want to, or not, they just opened the door.

Fri, 09/21/2012 - 14:39 | Link to Comment Shizzmoney
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The Fed's goal is not to relieve debt-serfdom, it's to enforce it

The Fed is going to be surprised when the young proles of the future can't afford their precious "land" or have no interest taking "mortgages" that will only eat away at what little income they'll have left.

Here's the Fed's policy in plain English: Debt-serfdom is good because it enriches the banks. All hail debt-serfdom, our goal and our god!

It is funny that in our Constitution, the separation of Church and State is clear.  But on our Currency, the mention of "God" is all over the fucking place. 

And they really also, don't mention which "God" we trust!  Sicne the Wall St Banks and the Fed print the money, are they the Gods?

The Constitution and the US Dollar.  Both are pieces of paper.  Yet one outweighs the other today in our Government, Corporations, and Institutions. 

You can guess which one that is.

Fri, 09/21/2012 - 14:41 | Link to Comment LouisDega
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What is this word mortgage everyone speaks of?

Fri, 09/21/2012 - 14:50 | Link to Comment chunga
chunga's picture

French origin:

"death pledge" alternately "death contract"

Sat, 09/22/2012 - 16:17 | Link to Comment noob
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MORTGAGE
MORTGAGE, contracts, conveyancing. Mortgages are of several kinds: as the concern the kind of property, mortgaged, they are mortgages of lands, tenements, and, hereditaments, or of goods and chattels; as they affect the title of the thing mortgaged, they are legal and equitable.
     2. In equity all kinds of property; real or personal, which are capable of an absolute sale, may be the subject of a mortgage; rights in remainder and reversion, franchises, and choses in action, may, therefore, be mortgaged; But a mere possibility or expectancy, as that of an heir, cannot. 2 Story, Eq. Jur. Sec. 1021; 4 Kent, Com. 144; 1 Powell, Mortg. 17, 23; 3 Meri. 667.
     3. A legal mortgage of lands may be described to be a conveyance of lands, by a debtor to his creditor, as a pledge and security for the repayment of a sum of money borrowed, or performance of a covenant; 1 Watts, R. 140; with a proviso, that such conveyance shall be void on payment of the money and interest on a certain day, or the performance of such covenant by the time appointed, by which the conveyance of the land becomes absolute at law, yet the, mortgagor has an equity of redemption, that is, a right in equity on the performance of the agreement within a reasonable time, to call for a re-conveyance of the land. Cruise, Dig. t. 15, c. 1, s. 11; 1 Pow. onMortg. 4 a, n.; 2 Chip. 100; 1 Pet. R. 386; 2 Mason, 531; 13 Wend. 485; 5 Verm. 532; 1 Yeates, 579; 2 Pick. 211.
     4. It is an universal rule in equity that once a mortgage, always a mortgage; 2 Cowen, R. 324; 1 Yeates, R. 584; every attempt, therefore, to defeat the equity of redemption, must fail. See Equity of Redemption.
     5. As to the form, such a mortgage must be in writing, when it is intended to convey the legal title. 1 Penna. R. 240. It is either in one single deed which contains the whole contract -- and which is the usual form -- or, it is two separate instruments, the one containing an absolute conveyance, and the other a defeasance. 2 Johns. Ch. Rep. 189; 15 Johns. R. 555; 2 Greenl. R. 152; 12 Mass. 456; 7 Pick. 157; 3 Wend, 208; Addis. 357; 6 Watts, 405; 3 Watts, 188; 3 Fairf. 346; 7 Wend. 248. But it may be observed in general, that whatever clauses or covenants there are in a conveyance, though they seem to import an absolute disposition or conditional purchase, yet if, upon the whole, it appears to have been the intention of the parties that such conveyance should be a mortgage only, or pass an estate redeemable, a court of equity will always so construe it. Vern. 183, 268, 394; Prec Ch. 95; 1 Wash. R 126; 2 Mass. R. 493; 4 John. R. 186; 2 Cain. Er. 124.
     6. As the money borrowed on mortgage is seldom paid on the day appointed, mortgages have now become entirely subject to the court of chancery, where it is an established rule that the mortgagee holds the estate merely as a pledge or security for the repayment of his money; therefore a mortgage is considered in equity as personal estate.
     7. The mortgagor is held to be the real owner of the land, the debt being considered the principal, and the land the accessory; whenever the debt is discharged, the interest of the mortgagee in the lands determines of  course, and he is looked on in equity as a trustee for the mortgagor.
     8. An equitable mortgage of lands is one where the mortgagor does not convey regularly the land, but does some act by which he manifests his determination to bind the same for the security of a debt he owes. An agreement in writing to transfer an estate as a security for the repayment of a sum of money borrowed, or even a deposit of title deeds, and a verbal agreement, will have the same effect of creating an equitable mortgage. 1 Rawle, Rep. 328; 5 Wheat. R. 284; 1 Cox's Rep. 211. But in Pennsylvania there is no such a thing as an equitable mortgage. 3 P. S. R. 233. Such an agreement will be carried into execution in equity against the mortgagor, or any one claiming under him with notice, either actual or constructive, of such deposit having been made. 1 Bro. C. C. 269; 2 Dick. 759; 2 Anstr. 427; 2 East, R. 486; 9 Ves. jr. 115; 11 Ves. jr. 398, 403; 12 Ves. jr. 6, 192; 1 John. Cas. 116; 2 John. Ch. R. 608; 2 Story, Eq. Jur. Sec. 1020. Miller, Eq. Mortg. passim.
     9. A mortgage of goods is distinguishable from a mere pawn. 5 Verm. 532; 9 Wend. 80; 8 John. 96. By a grant or conveyance of goods in gage or mortgage, the whole legal title passes conditionally to the mortgagee, and if not redeemed at the time stipulated, the title becomes absolute at law, though equity will interfere to compel a redemption. But, in a pledge, a special property only passes to the pledgee, the general property remaining in the pledger. There have been some cases of mortgages of chattels, which have been held valid without any actual possession in the mortgagee; but they stand upon very peculiar grounds and may be deemed exceptions to the general rule. 2 Pick. R. 607; 5 Pick. R. 59; 5 Johns. R. 261; Sed vide 12 Mass. R. 300; 4 Mass. R. 352; 6 Mass. R. 422; 15 Mass. R. 477; 5 S. & R. 275; 12 Wend. 277: 15 Wend. 212, 244; 1 Penn. 57. Vide, generally,, Powell on Mortgages; Cruise, Dig. tit. 15; Viner, Ab. h.t.; Bac. Ab. h.t., Com. Dig. h.t.; American Digests, generally, h.t.; New, York Rev. Stat. p. 2, c. 3; 9 Wend. 80; 9 Greenl. 79; 12 Wend. 61; 2 Wend. 296; 3 Cowen, 166; 9 Wend. 345; 12 Wend. 297; 5 Greenl. 96; 14 Pick. 497; 3 Wend. 348; 2 Hall, 63; 2 Leigh, 401; 15 Wend. 244; Bouv. Inst. Index, h.t.
    10. It is proper to, observe that a conditional sale with the right to repurchase very nearly resembles a mortgage; but they are distinguishable. It is said that if the debt remains, the transaction is a mortgage, but if the debt is extinguished by mutual agreement, or the money advanced is not loaned, but the grantor has a right to refund it in a given time, and have a reconveyance, this is a conditional sale. 2 Edw. R. 138; 2 Call, R. 354; 5 Gill & John. 82; 2 Yerg. R. 6; 6 Yerg. R. 96; 2 Sumner, R. 487; 1 Paige, R. 56; 2 Ball & Beat. 274. In cases of doubt, however, courts of equity will always lean in favor of a mortgage. 7 Cranch, R. 237; 2 Desaus. 564.
    11. According to the laws of Louisiana a mortgage is a right granted to the creditor over the property of his debtor, for the security of his debt, and gives him the power of having the property seized and sold in default of payment. Civ. Code of Lo. art. 3245.
    12. Mortgage is conventional, legal or judicial. 1st. The conventional mortgage is a contract by which a person binds the whole of his property, or a portion of it only, in favor of another, to secure the execution of some engagement, but without divesting himself of the possession. Civ. Code, art. 3257.
    13.-2d. Legal mortgage is that which is created by operation of law: this is also called tacit mortgage, because it is established by the law, without the aid of any agreement. Art. 3279. A few examples will show the nature of this mortgage. Minors, persons interdicted, and absentees, "have a legal mortgage on the property of their tutors and curators, as a security for their administration; and the latter have a mortgage on the property of the former for advances which they have made. The property of persons who, without being lawfully appointed curators or tutors of minors, &c., interfere with their property, is bound by a legal mortgage from the day on which the first act of interference was done.
    14.-3d. The judicial mortgage is that resulting from judgments, whether these be rendered on contested cases or by default, whether they be final or provisional, in favor of the person obtaining them. Art. 3289.
    15. Mortgage, with respect to the manner in which it binds the property, is divided into general mortgage, or special mortgage. General mortgage is that which binds all the property, present or future, of the debtor. Special mortgage is that which binds only certain specified property. Art. 3255.
    16. The following objects are alone susceptible of mortgage: 1. Immovables, subject to alienation, and their accessories considered likewise as immovable. 2. The usufruct of the same description of property with its accessories during the time of its duration. 3. Slave's. 4. Ships and other vessels. Art. 3256.

mortgage
In Anglo-Amer. law, the method by which a debtor (mortgagor) conveys an interest in property to a creditor (mortgagee) as security for the payment of a money debt. The modern mortgage has its roots in medieval Europe. Originally, the mortgagor gave the mortgagee ownership of the land on the condition that the mortgagee would return it once the mortgagor's debt was paid off. Over time, it became the practice to let the mortgagor remain in possession of the land; it then became the mortgagor's right to remain in possession of the land so long as there was no default on the debt.

Fri, 09/21/2012 - 14:39 | Link to Comment john_connor
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Phuck 'em.  Dump your 401K, pay penalty and tax, and then pay off your mortgage.  In one fell swoop you eliminate two electronic "assets" that have been rehypotheticated 50X.

Fri, 09/21/2012 - 14:50 | Link to Comment SwimmininNawlins
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They'll just enslave you with property taxes and such

Fri, 09/21/2012 - 15:16 | Link to Comment Shizzmoney
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Agreed....hard to escape the tenticles of tax and fees and the middle man in general.

Basically, I'm trying to "delever" myself from as many fees as possible. 

Fri, 09/21/2012 - 19:35 | Link to Comment rayduh4life
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you can never payoff real estate - the minute you don't pay those propert taxes, you'll find out who really owns your property.

Fri, 09/21/2012 - 14:44 | Link to Comment LawsofPhysics
LawsofPhysics's picture

What these paper-pushing fucks forget is that wages matter.

Fri, 09/21/2012 - 15:02 | Link to Comment WarriorClass
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Legal immigration, due to the Immigration Reform Act of 1965, has done more damage to this country than illegal immigration could ever have hoped to do. Americans now think it's OK to replace the population of freedom loving Americans with third world collectivists, as long as it's "legal." Legal immigrants now out number the American population of 1965, which is why we have Obama for President.

Fri, 09/21/2012 - 15:08 | Link to Comment LawsofPhysics
LawsofPhysics's picture

Did you have a point?  That which cannot be sustained won't be.  Many already leaving.

Fri, 09/21/2012 - 15:24 | Link to Comment crusty curmudgeon
crusty curmudgeon's picture

Right on, LoP.  One of my most-often used phrases these days:  Things that cannot go on forever have a tendency to stop. 

Combine that with "If it sounds too good to be true, it probably is" and you have two simple phrases that--if understood--could save a lot of grief.

Fri, 09/21/2012 - 15:28 | Link to Comment JR
JR's picture

The point is "the seeds of diversity are being sown by high rates of childbearing among America’s minorities…” while, in addition to the silence on the negative impact of Mexican immigration such as lower wages and unemployment for American citizens coupled with higher welfare costs and the disadvantages of a Third World culture mentality, there is the misinformation told about immigrants returning home in such large numbers that it makes a difference in the current population.

In California, 72 percent of students are of color, according to the Center for American Progress.  And four American states are majority-minority as of 2010: Hawaii, California, New Mexico and Texas.

In fact, according to a Carsey Institute in Spring 2010, The Changing Faces of America’s Children and Youth:

 “Last year (2009), 48.6 percent of the babies born in the United States were members of minority groups,"

while

“Recent U.S. Census Bureau projections indicate that by the middle of this century, non-Hispanic whites will cease to be a majority of the American population…”

 

Fri, 09/21/2012 - 16:30 | Link to Comment crusty curmudgeon
crusty curmudgeon's picture

So?  What do you want to do, kill them all?  Send them to Africa and Mexico?

Your arguments about taking jobs has been so thoroughly discredited by intelligent economists (e.g., Mises, Hayek and Rothbard) as well as the few enlightened politicians like Ron Paul that it's not worth debating.

Liberty is always dangerous, but it is the safest thing we have. —Harry Emerson Fosdick

Fri, 09/21/2012 - 17:46 | Link to Comment JR
JR's picture

How dare you use the proven economic philosophy of Mises, Hayek, and Ron Paul to fit your upside down understanding of the effects of Third World immigration on Americans’ employment. It’s okay to be wrong but I think it’s insulting to suggest that Austrian economists would support the current corporate/banker propaganda regarding labor, wages and immigration. One of the most endearing characteristics of Austrian economics is its truthfulness against the prevailing lies of the globalist banker economists seeking to build a worldwide planatation-style economy.

The increase in non-skill immigration over the past few years has been phenomenal and the apparent effect on salaries, unemployment, welfare costs and cultural changes is like watching the sun come up; to deny that is to make one wonder about your motivation. Ask the unemployed in Southern California who took their jobs and if those jobs now pay more than before they lost them.

As for rascism, apparently you have Americans confused with La Raza.

 

"While the federal government neglects its constitutional responsibility to protect our borders, it continues to push mandates on the states to provide free education and medical care to illegal immigrants at a time when the states are drowning in debt.   This must not be tolerated any longer." -- Ron Paul

 

Fri, 09/21/2012 - 20:23 | Link to Comment crusty curmudgeon
crusty curmudgeon's picture

Right.  Millions of unskilled laborers flooding in from everywhere are destroying the country.

Fri, 09/21/2012 - 20:01 | Link to Comment crusty curmudgeon
crusty curmudgeon's picture

For the benefit of those who care about this issue, here is Mises himself on this issue:

http://www.economicthinking.org/articles/lvmMisesMove.html

"One must certainly be careful to avoid accepting the false interpretation that workers in lands where the natural conditions are more favorable for production can fare better by prohibiting immigration than they can if migration were free."  - Ludwig von Mises

"Without the reestablishment of freedom of migration throughout the world, there can be no lasting peace." - Ludwig von Mises

Perhaps JR will be so good as to point out how I've got this wrong.

As for Ron Paul, he simply believes the Executive needs to enforce the Constitution.  He's against the welfare state and giving freebies to immigrants.  He's not against immigration and he's very much opposed to shipping illegals back across the border.

Fri, 09/21/2012 - 18:27 | Link to Comment Strider52
Strider52's picture

In SoCalifornia, you don't have to visit Mexico anymore. It's already here.

Fri, 09/21/2012 - 15:20 | Link to Comment Spastica Rex
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My best friend from high school didn't have children becasue they cramped his and his wife's life style.

Tell you what - they'll both be collecting SS as soon as they can.

Demographics are a bitch.

 

Fri, 09/21/2012 - 15:50 | Link to Comment LMAOLORI
LMAOLORI's picture

 

 

Spastica that may be the case for your friends but in the late 1960's early 1970's the mainstream news almost nightly told Americans they were destroying the world by overpopulating. People who dared to have more then 1 or 2 children were looked down upon. It was akin to a giant brainwashing scheme to change the demographics because our government had no problems with bringing in immigrants who populated like rabbits.

Fri, 09/21/2012 - 16:25 | Link to Comment Spastica Rex
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Look at the history of  "guest workers." Start with Rome.

Give me a reason why.

Fri, 09/21/2012 - 14:46 | Link to Comment blunderdog
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Yes, Charles, it's all corrupt and rotten and "all for the banks," but you've got to remember that if the gummit DOESN'T continue propping up the banks, someone's going to have to come up with the $837 billion or so that they CLAIM to have "on deposit" from the citizens.

Fri, 09/21/2012 - 14:48 | Link to Comment LawsofPhysics
LawsofPhysics's picture

Correct.  Eventually the margin call cannot be papered over.  So long as the moral hazard is NOT addressed, nothing changes and possession is the fucking law.

Every financial crisis that the world has had since WWII has in essence been a bank run.  Notice how the duration between each crisis is shortening.

Fri, 09/21/2012 - 15:01 | Link to Comment RSBriggs
RSBriggs's picture

So why not just give the banks 837 billion directly?  That seems a lot cheaper than 16 Trillion.  Something doesn't make sense here....

Fri, 09/21/2012 - 15:02 | Link to Comment LawsofPhysics
LawsofPhysics's picture

debt slavery is more expensive than liberty and individual responsibility.

Fri, 09/21/2012 - 19:46 | Link to Comment rayduh4life
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but what about those opportunity costs?  those negative externalities can be a bitch.

Fri, 09/21/2012 - 15:08 | Link to Comment exi1ed0ne
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When you borrow for a house, you gain an asset (house) and a liability (loan).  The bank you borrow from gains an asset (loan) which then can be used as collateral for a loan creating an asset (money) and a liability (loan).  The secondary lender gains an asset (loan), and so on and so forth.  The only tangible asset is the original house, but it supports practically an infinite amount of debt.

Oversimplified, but that's why shit sucks with all the starving and bullshit, and we running out of fries and burrito coverings.

Fri, 09/21/2012 - 15:12 | Link to Comment LawsofPhysics
LawsofPhysics's picture

Debt is not a problem if the moral hazard is kept in check.  Moreover, what if someone has savings and they agree to loan that out.  It used to be this way before the fractional reserve bullshit.

I don't mind banks going back to the old model, the problem is then they can't steal from us anymore through printing and the eventual inflation that always comes.  At the heart of all this is the issue of value.  The paper-pushing fucks know that there is no value in their labor, hence they don't want to go back to the old model as they would actually have to work harder and do some due diligence.

Fri, 09/21/2012 - 16:06 | Link to Comment calgal
calgal's picture

Yes, you are explaining fractional reserve banking and how the bank monetizes that asset 10 to 50 times and creates more loans on it

MBS /Derivatives - loan goes to shit and bank in deeper shit

Beware the Creatures from Jekyll Island....

Fri, 09/21/2012 - 16:17 | Link to Comment chunga
chunga's picture

It's quite a predicament.

This report from the good folks at SEC is really something else.

A Staff Report of the Task Force on Mortgage-Backed Securities Disclosure

"Most pass-through MBS of each of Fannie Mae, Freddie Mac and Ginnie Mae are eligible to be sold in the "to-be-announced" or TBA market, which is essentially a forward or delayed delivery market. Only pass-through securities issued or guaranteed by Fannie Mae, Freddie Mac or Ginnie Mae and comprised of single-family mortgages are eligible for trading in the TBA market. The TBA market allows mortgage lenders essentially to sell the loans they intend to fund even before the loans are closed."

Throw in a few "credit enhancements" and presto! The ponzi of all ponzis!

Sat, 09/22/2012 - 04:45 | Link to Comment Parrotile
Parrotile's picture

A truly great scheme isn't it - bundle 'em up, and sell the RMBS for pennies to the dollar - then rinse and repeat ad infinitum. And every player along the way is able to skim their cut whilst the risk usually gets sold back to J6P at the end as an AAA Rated "Security".

Freakonomics at its best.

Fri, 09/21/2012 - 15:35 | Link to Comment blunderdog
blunderdog's picture

It's a good idea and would work fine, except it would require the destruction of the current international financial system. 

All the other banks on Earth depend on the flows of money from these banks. 

WHEN the USA is prepared to dump the "current" dollar and float a new currency, I'm sure that's what they'll end up doing.

But floating a new currency will probably require world-war III--to make up for the massive ripoff of everyone who's got "assets" with our zombie-banks.

Fri, 09/21/2012 - 16:14 | Link to Comment LMAOLORI
LMAOLORI's picture

 

 

The FDIC insures our money and recently our govt. allowed BOA to dump $75 Trillion of Derivatives there. Regarding the FDIC and how healthy it is keeping in mind it has the full faith and credit of the US (that's you and I in reality) behind it

 

Bank Of America Dumps $75 Trillion In Derivatives On U.S. Taxpayers With Federal Approval

FDIC To Cover Losses On $75 Trillion Bank of America Derivative Bets

FDIC STATISTICS: READ 'EM AND WEEP (link is PDF)

snip

Per the Q4 2011 FDIC Chief Financial Officer's report to the Board, published on March 30, 2012, the FDIC's Deposit Insurance Fund had a balance of $11.8 billion dollars.

HERE'S THE LINK.

Bank deposits in the United States at the same time are estimated to be between $8 TRILLION and $10 TRILLION. Let's be conservative and say the number is $8TTT.

11,800,000,000 divided by 8,000,000,000,000 equals 0.001475, which I will round UP to 0.0015.

That is read as "fifteen hundredths of one percent". It isn't one percent, it is fifteen hundredths of one percent. That is how much the FDIC is carrying to back all of those little signs on the teller windows that say "Each Depositor insured to at least $250,000. Backed by the full faith and credit of the United States government."

more

http://barnhardt.biz/

Fri, 09/21/2012 - 16:36 | Link to Comment blunderdog
blunderdog's picture

Those are GROSSLY misleading numbers.  Demand deposits are in the $837B range.  There are lots of holdings which aren't FDIC-insured, and technically the government isn't on the hook for them.

http://research.stlouisfed.org/fred2/series/DEMDEPSL

Fri, 09/21/2012 - 18:49 | Link to Comment LMAOLORI
LMAOLORI's picture

 

 

Blunder the FDIC also insures Money Market funds since the crisis and they are trying to get that to continue also your link only shows commercial banks.  FDIC also covers Revokable Trusts, Certain Retirement Accounts, etc. 

Temporary Unlimited Coverage for Noninterest-bearing Transaction Accounts

http://www.fdic.gov/deposit/deposits/insured/temporary.html

 

Trillion dollar bank insurance program may sneak into legislation snip more at link

A little-known bank insurance program implemented in 2008 at the height of the financial crisis may quietly slip into legislation and become permanent.

The Transaction Account Guarantee program was implemented in 2008 and provides unlimited FDIC insurance to deposits for all non-interest-bearing transaction accounts above the limit of $250,000. Today, more than $1.3 trillion in deposits are covered by the program.


And guess what else

A Shortage of Bonds to Back Derivatives Bets


 

Fri, 09/21/2012 - 20:10 | Link to Comment blunderdog
blunderdog's picture

Well, I stand corrected, somehow, but I guess only a real bankerguy can describe the implications.  Looks like the real candy is this: http://www.fdic.gov/deposit/deposits/unlimited/faq.pdf

"Non-interest bearing transaction account" can't be interestbearing accounts, NOW accounts, or money market deposit accounts (“MMDAs”), EXCEPT as expressly provided in 12 C.F.R. § 330.16(b) with respect to certain swept funds.

Swept funds include automated whatever-the-fuck.

OK, anyway, whatever else it is that's insured there--

Can anyone explain what sorts of accounts these ARE in layman's terms?  And how much money they might "contain"?  Interesting/useful cites would be good too.

The referenced insurance program appears to be slated to expire at the end of this year, which could imply something interesting about the near future.

Fri, 09/21/2012 - 14:53 | Link to Comment davidsmith
davidsmith's picture

New problem with ZH--telling us the obvious:

 

Here's the Fed's policy in plain English: Debt-serfdom is good because it enriches the banks. All hail debt-serfdom, our goal and our god!

Fri, 09/21/2012 - 15:02 | Link to Comment NotApplicable
NotApplicable's picture

You should note that this is a guest contributer, who makes his money writing to those who aren't as clued in as the average ZHer.

Fri, 09/21/2012 - 15:42 | Link to Comment Citxmech
Citxmech's picture

The occasional "into" article is nice every once in a while for newbies and also for forwarding to candidates for the blue pill.

Fri, 09/21/2012 - 14:57 | Link to Comment Vegetius
Vegetius's picture

Well looks like the Bankers have a plan Hurrah!!

3-5 years later

Looks like the Disadvantaged have another plan kill the Bankers HURRAH !!! 

 

"We're on an express elevator to hell; going down!"

- Hudson

Fri, 09/21/2012 - 15:29 | Link to Comment zapdude
zapdude's picture

I say we take off and nuke the FED from orbit.  It's the only way to be sure. -- Ripley, or at least what she should have said

Fri, 09/21/2012 - 14:57 | Link to Comment Vegetius
Vegetius's picture

Well looks like the Bankers have a plan Hurrah!!

3-5 years later

Looks like the Disadvantaged have another plan kill the Bankers HURRAH !!! 

 

"We're on an express elevator to hell; going down!"

- Hudson

Fri, 09/21/2012 - 15:00 | Link to Comment Skip
Skip's picture

The US Census had projected, in 1999, that the US population would grow to ONE BILLION by the end of this century, I think it has the potential to occur much faster, just look at all the agricultural land that has disappeared in the last 30 years due to population growth, which is entirely from immigration and the spawn of Third World immigrants. So go strong on housing...

Fri, 09/21/2012 - 15:06 | Link to Comment LawsofPhysics
LawsofPhysics's picture

right because, people don't need to eat.  You cannot transform all other non-human biomass into human biomass.  Sooooo many biological cycles depend on non-human biomass that at some point life as we know ceases to be and after another billion years or so, a new something will arise from the microbial soup that is left behind.  Unlike mammals, there are numerous microbes that can metabolize all kinds of compounds.  Unfortunately from mammals we are confined to essentially glucose, with the electrons going to Oxygen to make CO2 and water.  Don't think biological cycles can change the composition of the atmosphere? _FAIL.

Fri, 09/21/2012 - 15:21 | Link to Comment edifice
edifice's picture

I think in the next decade, Americans will shed much biomass, as calories will be more difficult to come by.

Fri, 09/21/2012 - 15:09 | Link to Comment kevinearick
kevinearick's picture

The warden is caught in the catch 22 of the empire's own self-fulfilling false assumption of wealth effectiveness, breeding the middle class to be efficient robots. to avoid the capital traps, you must walk in their shoes to see all the false assumptions governing the event horizons. it's a distillation. the price of gold simply represents the devaluing currencies. gold cannot do work.

are you ready for "global cash cards"?

Fri, 09/21/2012 - 15:08 | Link to Comment pndr4495
pndr4495's picture

The Fed's purpose is to make its owners richer than they are already , period.

Fri, 09/21/2012 - 15:09 | Link to Comment strangeglove
strangeglove's picture

First they stole the land
Then they stole the Gold
Next the silver was removed from circa
Next go the homes

What are we left with?

Fri, 09/21/2012 - 15:11 | Link to Comment falak pema
falak pema's picture

it helps pax americana, look beyond the banks to the global construct. Its an imperial game.

Fri, 09/21/2012 - 15:13 | Link to Comment JR
JR's picture

“Home equity, the primary source of wealth for most American households, has just barely started to recover,” according to an AP story yesterday.

The article, Higher Stock Prices Help Americans Regain Wealth, says that “home equity rose in the second quarter for only the second time since 2006, up 2.1 percent to $16.9 trillion. That's up from a bottom of about $16.1 trillion. Home equity remains far below the $22.7 trillion reached in 2006, at the peak of the bubble.

http://www.npr.org/templates/story/story.php?storyId=161482212

 

Fri, 09/21/2012 - 15:16 | Link to Comment edifice
edifice's picture

The public has been hoodwinked into thinking things like cars and houses are assets, when they're really liabilities. This is true even when they are paid off. I mean, when you buy either of these things, you pay for it at least twice: once with the principal of the loan; twice with interest, taxes, fuel, and maintenance.

Fri, 09/21/2012 - 20:00 | Link to Comment rayduh4life
rayduh4life's picture

And insurance.  I have a 1980 pick up I bought in 1982.  I've paid many times more in car tabs and insurance than I paid for the truck.

Fri, 09/21/2012 - 22:36 | Link to Comment Curt W
Curt W's picture

I bought a 72 cougar in 78 and drove it till 85, sold it for the same price I bought it at.  In the mean time, tags and Ins. cost more than the purchase price.

Fri, 09/21/2012 - 15:21 | Link to Comment Catullus
Catullus's picture

The housing prices are still too high.

The bank buys the house and let's you live in it for the term of the mortgage. People don't buy houses with mortgages. The bank does. And the banks are not giving out mortgages not because rates are too low, but because the housing prices are too high. They know people are dirtbags and will default. They just don't want to be stuck with an overpriced asset.

Fri, 09/21/2012 - 15:22 | Link to Comment CheapBastard
CheapBastard's picture
Unemployment rates rise in half of US states

 

http://news.yahoo.com/unemployment-rates-rise-half-us-states-143515602--...

 

The only way house sales rise is if they are accepting EBT cards.

 

Good luck!

Sat, 09/22/2012 - 23:04 | Link to Comment Clinteastwood
Clinteastwood's picture

better write your Democratic congresscritter------i think you're onto something there.

Fri, 09/21/2012 - 15:23 | Link to Comment Jack Burton
Jack Burton's picture

Clearly the Government sees much benefit to it's main masters in pushing this form of housing recovery.

Banks basically used a business model that failed in spectacular fashion in 2008. Once this failed business model brought them to the brink of insolvency, the government stepped in with the full force of it's Federal reserve money printers and put in place policies that were just as the main post makes clear.

Priority number 1 was to save these insolvent banks.

Priority 2 was to maintain mortgage debt as a form of debt slavery whcih produces docile workers who must conform to corporate standards to keep their jobs and to keep paying their mortgages.

A debt enslaved population causes no political problems, it goes to work for what it can get and asks no questions, the debt must be serviced, the American dream of that too expensive home must be maintained. The kids must be raised to obey authority.

In the end this housing policy is of great use to the Powers That Be. A population who must service it's debts has very little freedom to cause any type of political unrest.

It is just that true that all this mass money printing to juice housing by keeping interest rates at rock bottom is meant to maintain strict debt slavery.

As a side note, and I know this will offend the ladies, much of this drive for people to buy above their income range and to borrow at the limit of their income stream was pushed by the Lady of the house. In my personal experience among friends, family and coworkers, it was almost always the lady who drove the families to borrow ot the limit, to buy as much of a house as they possibly could get a loan on. The local paper is full of foreclosure notices, I know many of the families and it was more often than not women trying to outdo each other in McMansion buying that put their families into such deep mortgage debt. At work I listened to the women talk endlessly about how big and fancy a house they could get a loan on! Personal responsibility? Why go so deep into debt to have bragging rights on your house. Most of us were raised in smaller modest homes and we had great childhoods and I never remember folks talking and bragging about their houses.

I bought what I could afford, I built a nice modest new home on land I already owned. I had saved before hand and held 66% equity on the finished house, Mortgage payments are well under 20% of take home pay. No , we can't brag about our McMansion, but yes, we sleep well knowing we can afford it and have a nice equity stake.

Fri, 09/21/2012 - 16:41 | Link to Comment Overfed
Overfed's picture

I bought my place a few years before the peak of the bubble. When I was looking, I made sure to find a fixer-upper, made the seller hire a cheap carpenter to put lipstick on the pig, got a subprime loan and bought it with zero down. I refied it four years later, and after some work, I have $30K in equity even after the crash. And a payment that is at least $300-$400 cheaper than I would pay in rent on a comparable place.

Sat, 09/22/2012 - 02:38 | Link to Comment AynRandFan
AynRandFan's picture

@JackBurton

I talk to a lot of people who refuse to take responsibility for their actions and their failures.  You seem to elevate that attitude to a moral right.  No one forced people to borrow more than they can afford.  I pay my bills, I buy houses below market value, and I put a lot of sweat equity into any property I buy.

You seem to share my point of view regarding paying you own bills.  Why, then, are you championing more debt and selective default?

Fri, 09/21/2012 - 15:25 | Link to Comment Bob
Bob's picture

Nicely to the point, Charles! It ain't hard to see what's going on around here. 

Bill Black catches the DoJ handing,--explicitly--the corporate elite their script for dismissing criminal prosecution in the "public interest."  This is the most basic and scathing example of Black speaking purely as a lawyer that I've seen:

http://neweconomicperspectives.org/2012/09/fiat-justitia-breuer-fires-blanks-on-elite-financial-frauds.html

Fri, 09/21/2012 - 15:41 | Link to Comment ebworthen
ebworthen's picture

"All Hail Caesar"

http://www.youtube.com/watch?v=dbsrVWvtcUc

Bread and Circuses did not save Imperial Rome from the comeuppance of its' corruption, and it won't save the U.S.S.A. either.

Fri, 09/21/2012 - 15:48 | Link to Comment Tombstone
Tombstone's picture

With never-ending QE, the central planners have engaged in a new 5 year plan.  When this one fails, they will start another 5 year plan.  No worries, mate.  Benny and The Dictator have us covered.

Fri, 09/21/2012 - 16:08 | Link to Comment sessinpo
sessinpo's picture

From article: "If the Fed wanted to "save" housing and not the banks, why not buy mortgages directly from homeowners? Instead of buying underwater mortgages from the banks, why not just buy the entire $10 trillion of residential mortgages outstanding and charge the homeowners the same rate the Fed charges banks, i.e. zero?"

 

One answer among others: Because this would reduce or eliminate a laundering stream in which the FRB launders money through the banks which are also able to use that money to lobby (buy) the government.

Fri, 09/21/2012 - 16:30 | Link to Comment helping_friendl...
helping_friendly_book's picture

We should start backing Palistine. Cut Israel off completely. Bring the Fleets home and start scrapping Aircraft Carriers to make tracks for high speed rail. We can put every sailor and soldier to work scrapping the Fleet and Abrahms Tanks. 

Let China and Russia deal with Europe and the ME. They are more than capable.

I say fuck everybody not living in this hemisphere.

 

Fri, 09/21/2012 - 20:47 | Link to Comment WTFx10
WTFx10's picture

The Zionist banksters would not like that. thats why were doing what were doing because the owners\creditors want it that way.

Declare a War on the BANKS the only true terrorists on the planet. Draining away the life of 100's of millions debt slaves.

The issue which has swept down the centuries and which will have to be FOUGHT sooner or later is the people versus the banks. Lord Acton

THE BANKS ARE WINNING AND THEIR GOVERNMENTS formally known as "we the people" are letting them.

"Gentlemen! I too have been a close observer of the doings of the Bank of the United States. I have had men watching you for a long time, and am convinced that you have used the funds of the bank to speculate in the breadstuffs of the country.

When you won, you divided the profits amongst you, and when you lost, you charged it to the bank. You tell me that if I take the deposits from the bank and annul its charter I shall ruin ten thousand families. That may be true, gentlemen, but that is your sin!

Should I let you go on, you will ruin fifty thousand families, and that would be my sin! You are a den of vipers and thieves. I have determined to rout you out, and by the Eternal, (bringing his fist down on the table) I will rout you out."

From the original minutes of the Philadelphia bankers sent to meet with President Jackson February 1834, from Andrew Jackson and the Bank of the United States (1928) by Stan V. Henkels

"To know what Fascism really is we must first of all know what it is we are fighting, what the Fascist regimes really are and do, who puts up the money and backs Fascism in every country, and who owns the nations under such regimes, and why the natives of all Fascist countries must be driven into harder work, less money, reduced standards of living, poverty and desperation so that the men and corporations who found, subsidize and own Fascism can grow unbelievably rich."

George Seldes, 1943

 “Truth hurts. Maybe not as much as jumping on a bicycle with a seat missing, but it hurts.”

                                      -Naked Gun

NOT So Cool Facts About Israel:

Israel, a country the size of New Jersey, can only claim to the following achievements:

Israel was founded upon the ruins of another nation that she destroyed: Palestine.

Israel holds the world record for the number of towns and villages she ethnically cleansed;

Israel holds the world record for the number of refugees she deported: 4 million+;

Israel holds the world record for the number of homes she demolished: 60,000+;

Israel is the country with the highest number of UN condemnations: 500 times+;

Israel is the country with the highest number of protective US Security council vetoes: 100 times +;

Israel has killed more innocent civilian captives than any other country: 50,000+;

Israel has imprisoned more civilian per capita than any other country:  250,000+;

Israel has rendered more innocent civilians handicapped per capita than any other country: 50,000+...

Israel is the only country on Earth that has legalized assassination...

Amongst all countries, Israel is the only one that has legalized torture...

Israel is the only country on whose checkpoints women, denied access to hospital, give birth, babies usually die...

Israel claims its enemies want to wipe it off the map, but she has indeed wiped a whole country off the map!...

Will it be IRAN we BOMB for the BANKSTERS or do we BOMB the real evil CENTRAL BANKS and the GANGSTERS they call CENTRAL BANKSTERS?

Nazi's know best

"Of course the people don't want war.

But after all, it's the leaders of the country who determine the policy, and it's always a simple matter to drag the people along whether it's a democracy, a fascist dictatorship, or a parliament, or a communist dictatorship. Voice or no voice, the people can always be brought to the bidding of the leaders.( "we the people " are not the leaders anymore) That is easy.

All you have to do is tell them they are being attacked, and denounce the pacifists for lack of patriotism, and exposing the country to greater danger."

Herman Goering
Nuremberg Trials

 “Truth hurts. Maybe not as much as jumping on a bicycle with a seat missing, but it hurts.”

                                      -Naked Gun

SHALOM mutha fuckers

Sat, 09/22/2012 - 00:42 | Link to Comment Joseph Jones
Joseph Jones's picture

A+, best post in quite a while.

Add this one too:

More Israeli nationals convicted of espionage against the USA than any other nationals.  

So much for our "unbreakable bond" (H. Clinton, Obama)

It's strange thinking how this "race" of people coined the term "anti-Semite" when the book that defines the "Jewish" state of Israel's existence (The Talmud, their other/second "Torah") states: "Even the best of the gentiles deserve only death."  How is this not a hate crime?

How do you naive goyim females like this daily prayer of Judaic males?  "Thank you g_d you did not make me a slave, a woman, nor a gentile." 

And we want to bring "freedom" to Muslim women! 

Sat, 09/22/2012 - 02:30 | Link to Comment AynRandFan
AynRandFan's picture

One word, "holocaust".  That is the reason for the State of Israel.  Everything else that followed was an act of survival.

It is almost unbelievable that people can ignore the one and only reason for reestablishment of the State of Israel.  But, of course, the Nazis had a majority of support and still has many sympathizers such as yourself.

Sat, 09/22/2012 - 00:34 | Link to Comment Joseph Jones
Joseph Jones's picture

I'll write in your user name for president.

Fri, 09/21/2012 - 16:44 | Link to Comment devo
devo's picture

Yeah. Good luck selling a house after a second bubble where buyers are twice as poor.

Sellers will be able to buy a loaf of bread with their reinflated houses.

 

Sat, 09/22/2012 - 02:25 | Link to Comment AynRandFan
AynRandFan's picture

Can't imagine a more perceptive and succint response to this half-baked article.

The Fed can't buy mortgages from homeowners, for one thing, because they are the debtors.  The article is either facetious or just hyperventilation.  The idea that all mortgages would be monetized in order to reflate the housing market is beyond absurd.  Might as well use Monopoly money from that point on.

Fri, 09/21/2012 - 16:49 | Link to Comment Snakeeyes
Snakeeyes's picture

The Fed just blew out agency MBS spreads and risk, huritng retirees and risk averse investors. All in the name of a dead asset class - housing.

http://confoundedinterest.wordpress.com/2012/09/21/eurozone-deflation-netherlands-housing-spanish-mortgages-but-greek-yields-fall-below-20/

Fri, 09/21/2012 - 18:39 | Link to Comment JR
JR's picture

What a crime to force Europeans and through leverage Americans to save a European train-wreck organization. The Eurozone was always a step from marketing to currency control to political control to becoming the European piece in a world government puzzle. There would be resistance along the way, of course, from peoples reluctant to turn over their sovereignty and their lives to unelected bankers. And now we know why. Those suspicious citizens, it turns out, were right all along. As always, Sanders presents the evidence for the prosecution.

 

Fri, 09/21/2012 - 16:57 | Link to Comment q99x2
q99x2's picture

Make the FED pay with their children's money not mine.

Nothing has been going on. Its and S&M show. Let something happen. Anything.

Fri, 09/21/2012 - 20:47 | Link to Comment Curt W
Curt W's picture

Want to do one better, buy the mortgages from banks for $10 Trillion

And just hand the titles to the homeowners.  He was going to print to eternity anyway.

Imagine the boost to the economy, if all homeowners no longer had a house payment.  And the banks had $10 Trillion in cash.

Can you say home equity loan and a new boat, car, ATV !!

Now that would be a fun BUBBLE

Sat, 09/22/2012 - 14:26 | Link to Comment Grand Supercycle
Grand Supercycle's picture

Due to recent central bank intervention and short covering spikes, all these daily charts are extremely overextended & a significant correction is expected very soon ~ SPX,DOW, NZDUSD, GBPUSD, AUDUSD, COPPER, CRUDE, GOLD, SILVER.

http://www.zerohedge.com/news/2012-12-24/market-analysis

http://trader618.com

Sat, 09/22/2012 - 15:07 | Link to Comment MoneyShaman
MoneyShaman's picture

Well of course the Federal Reserve is trying to save the bailed banks. That's what the Fed was created in the first place, to sustain a fractional reserve banking cartel. Housing is a right is just a extra socialist proganda juice to add on top of it to justify banks mortgaging people to death. Banking effects more than just mortgages. It's a credit system, or loan-able funds market.

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