`It's your 2 Trillion; not the Fed's." Fed Refuses To Provide Any Transparency

Quote from makloda:

Uhm.. other dumbass Americans?

"Hard working Americans" that's a thing of the past.

Now we've got "whining Americans". Worse than the French. It's disgusting.
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Hard working Americans is not a thing of the past. You don't even live here so what whould you know about had working Americans.

It's the scum bag investment banks that creadted these products. Bank Of America did not create them.
 
Quote from jprad:

So, where do you think we're going to be when the rate of default on consumer debt becomes 10-20 times the rate of mortgage defaults?



Unfortunately, it is just as big.

BTW, CDSs, are a different kettle of fish from the underlying due to the fact that a lot of them are essentially naked trades with no underlying asset.



No, Japan refused to force the banks to write off their bad loans.

What I'm saying is not at all the same. First, the unsecured consumer loans should be written off, now.

Second, declare all CDSs null & void.

Third, the government underwrites the mortgages that are underwater which keeps these people in these homes until inflation can raise wages up to the point to where the housing market can start to function again.



Much as I agree with you the unfortunate reality is that deflation never works uniformly across markets, sectors and asset classes.



What you're saying is both logically and viscerally correct but it's completely wrong from practical perspective.

What you'd end up with is the entire country facing the same blight that Detroit, southern CA and parts of Florida and Arizona are facing where large sections of neighborhoods are carrying empty homes.

You not only need buyers, you need occupants otherwise you end up with a wider and deeper deflation of all homes.

There's no point in winning the battle if it ends up costing you the war.
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You're wrong on most of it.

This is very similar to Japan.

Japan had a much greater appreciation in RE values (10 to 100 times original value).

While America had less (2 to 5 times), but those losses compounded through derivative exposure

The "Clean Up" was the same. Japanese Government subsidized, nationalized and took "off book" bad mortgage debt amounting in the trillions.

Fed is doing the same with bridge loans, Sub Alt-A no-recourse loans, bailout mortgage buys ect.

"Inflating Wages" (as you say) without a commensurate effect on CPI is nonsense. Impossible to pump M3 without an offsetting effect in housing, commodities, energy etc. Even printing Trillions and handing it out jumps CPI as more money is chasing static goods.

To wit, you'd prime M3 to get a 50% increase in per capita income?! And maybe pull a few hundred tons of gold outta your ass, while you're at it!!

A 50% increase in nominal GDP is HYPERINFLATION.

At that level, you' kill a huge chunk of GDP through wealth debasement. Remember, wages are sticky. Prices aren't. And wages never keep pace with inflation. So even if you doled out cash to everyone, increased prices would quickly offset (then surpass) the additional "wealth" injected. The result is higher prices for everyone = Reduced Discreationary Income = REDUCED GDP.

Deflation isn't supposed to be uniform.

Every Bubble that explodes, only affects those sectors that it affected.

Again, this is common sense.

The Crash of 29 didn't burst Model-T's. It burst the DOW Bubble.

The Crash of 2001 didn't burst Medicare. Its burst the NAZ.

The Crash of 2007 didn't burst Ipods. It burst the Housing, Stock and Commodity Bubble.

Why would a housing bubble crash disproportionately deflate computers and not houses??

Doesn't make any sense.

As for vacant homes and the negative effect on valuations.

Who gives a shit?!!

Overhang doesn't have to be consumed.

Its a glut created from overproduction.

All these Companies holding junk CDO's and derivatives that book losses as homes lose value, FUCK THEM.

Just because Citi, Merril or Fortis go under because they can't manage risk, doesn't spell apocalyptic doom.

How do you suppose capital markets work, anyway?

We go into a severe recession for 5 years, bankruptcies pile up as excess production is weeded out, and then short-specs that booked equity off all these dog-shit companies on the way down recapitalize the new Citi, Merill or BoA on the way up!!

Its simple. There's a shit load of money out there and its not in the markets. Its just sitting there waiting for ripe conditions.

That’s how Free Markets work. But I guess you Big Government Keynesians "know better"!!!:D
 
Quote from Random.Capital:

You're comparing apples to oranges. Vast majority of defaulted homes did not GTZ or anywhere close.
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You're arguing over minutia bullshit that makes no difference.

The stat i gave was a casual approximation. Clearly, you missed that. After looking it up, the actual average sp value for 2005 is 200K.

So what?


Quote from Random.Capital:

Combined with your earlier incorrect statement about types of loans "to my knowledge" not being securitized, I respectfully suggest you have some reading to do before you're in a position to suggest solutions.
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LOL

How about we do what i've been saying for the past 5 months - outlaw CDS and render them null and void?!

But i guess that doesn't count because credit card debt is securitized.

Hey, guess what?! ITS ALL THE SAME SHIT.
 
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