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flacorps

Gaze With Me Into The Credit Crystal Ball

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If you really want to get a wake-up-call, Look into who Truly Owns what we call the. " Federal Reserve System"

Oh the conspiracies never end............................ B)

 

I thought that Bruce Willis recovered it in Die Hard With Vengeance?

 

:D:rofl::rofl::rofl::rofl:

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The IMF is going to audit the U.S. financial system. This has never happened to the U.S. It is really big news that the U.S. press is ignoring.

 

http://www.google.com/search?q=IMF+Audit+U...mp;sourceid=ie7

 

President Bush has stipulated that the audit may only take place if the results are delayed until after he leaves office.

 

Forget the price of oil, forget the declining dollar, forget the mortgage crisis.

 

This audit overarches all of them. Whatever bodies are in the crawlspace, whatever skeletons are in the closet, whatever crazy aunt is in the attic ... it's all gonna come out.

 

And I guarantee that one way or another, it will cost you money if you don't correctly anticipate its effects.

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The BBC is noting that U.S. borrowers are now walking away from mortgages they could manage to pay because they are deeply upside-down in their homes. They estimate the impact to be $1.3 trillion, which essentially would wipe out all the equity (stock value) in all the banks in the U.S.

 

http://news.bbc.co.uk/2/hi/business/7529277.stm

 

Due to laws put in place during the depression that limit the availability of deficiency judgments for home loans, many borrowers will not be on the hook for the six-figure deficiencies they stick the banks with.

 

While there may be some states (California is said to be one of them) that do not permit deficiency judgments on purchase-money mortgages, a great many mortgages are re-fis which may not be covered. Other states, such as Florida leave deficiency judgments within the discretion of the court. Although in Florida deficiencies aren't customarily pursued, there is case law that a judge who uses his discretion to toss a deficiency claim must state a reason for so doing. The requirement that a reason be stated willl allow higher courts to review the lower courts' decisions for "abuse of discretion" that can be used to overturn them. There is no court decision that mirrors the requirement of a stated reason when a court upholds a lender's claim, which makes appealing such a ruling much more difficult. Heads the bank wins, tails you lose.

 

It is important that anyone thinking of walking away from a mortgage understand the legal environment in which they do so. Do not take the offhand advice proffered by a lawyer. I can't tell you how many lawyers in Florida I have read who flatly state that deficiency judgments on a home aren't permitted. Even those who understand the legal niceties will claim it just doesn't happen. That was then, this is now. One key notion to understand is that many states have a concept of a contract "under seal" and the mortgage note may be one of those, giving it a 10-20 year statute of limitations period. Is your note "under seal"?

 

The bottom line is that these deficiencies will have a value, and lenders (or the successors to their interests) will package and sell them to the JDBs. The JDBs in turn will pursue them, perhaps even judicially.

 

The notion that homeowners can walk away from their home purchases with acceptable consequences could lead to a massive deflationary death spiral which the Fed would not be able to forestall. Because of the interconnectedness of today's global economy and the increasing sophistication of financial markets in the past 80 years, a repeat of the Great Depression is unlikely. But what we would see is a shallower yet prolonged workout period similar to what Japan suffered in the last 20 years. Be ready.

Edited by flacorps

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Oh, I'm sorry, you guys. I owned the Federal Reserve and I put it in my dog's name when I ran out of biscuits. She's a pretty smart dog, though.

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people who use credit cards as supplemental income best find another resource

My next door neighbor has been on the "borrow your way to wealth"-system for quite some time. Needless to say, it`s like watching an impending trainwreck in very slow-motion.

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My next door neighbor has been on the "borrow your way to wealth"-system for quite some time. Needless to say, it`s like watching an impending trainwreck in very slow-motion.

 

Yeah, and every person who "borrows his way to wealth" just convinces 10 more people to do it, because it raises expectations about what a person deserves at a particular income level. Living within your means becomes that much harder for everybody.

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I have been stocking up < Guns and Ammo , > and getting ready for this the past 5 years :cry2:

 

My parents didn't teach me much about money and credit... but they did pass on their paranoid ideas about being prepared...

 

I took good notes - stocking up complete :cry2:

 

Not that I think it will come to a point where I need them, but if it did I wouldn't be one of the ones who wasn't prepared.

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There is nothing wrong with customers in CA walking away from their homes if they are seriously underwater. A home is a financial decision - no more, no less - it does not make any sense to keep making payments on a $600K home when your neighbor sells his home for $290K (Actual story in Norco).

 

The lenders package the whole shebang into MBS and then expect the Fed to bail them out via special lending windows, preferred guarantees on debt (Bear Stearns), etc. In return, Honest taxpayers have no choice but to use every single loophole available to them in order to survive.

 

The BBC is noting that U.S. borrowers are now walking away from mortgages they could manage to pay because they are deeply upside-down in their homes. They estimate the impact to be $1.3 trillion, which essentially would wipe out all the equity (stock value) in all the banks in the U.S.

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There is nothing wrong with customers in CA walking away from their homes if they are seriously underwater. A home is a financial decision - no more, no less - it does not make any sense to keep making payments on a $600K home when your neighbor sells his home for $290K (Actual story in Norco).

 

The lenders package the whole shebang into MBS and then expect the Fed to bail them out via special lending windows, preferred guarantees on debt (Bear Stearns), etc. In return, Honest taxpayers have no choice but to use every single loophole available to them in order to survive.

 

I'm not entirely opposed to people walking away.. I'm not even saying that I might not do it if it were me.

 

But, they weren't forced at gun point to purchase at $600K. They must have thought it was worth it, or that it would keep going up in value right?

 

I don't really know where I stand on it completely. I feel bad for people who are that far upside down but I just don't think it's right they can just shrug their shoulders and walk away. Real estate will stay realatively flat for that reason until laws are changed and banks are allowed to chase the defficiency. Lenders aren't going to lend and allow prices to shoot up again knowing that if they fall back down everyone's just going to walk away like last time and stick them with the bill. (And I don't feel sorry for banks either - they're even worse than the home buyers who didn't pay attention to reality.)

 

I don't have a solution - just an opinion :clapping:

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Living within your means becomes that much harder for everybody.

Watching him is a daily booster-shot incentive for me to live within my means :grin:

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Living within your means becomes that much harder for everybody.

Watching him is a daily booster-shot incentive for me to live within my means :)

 

Is it just a non-stop parade of process servers and repo guys or what? :angry:

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I have been stocking up < Guns and Ammo , > and getting ready for this the past 5 years :P

 

My parents didn't teach me much about money and credit... but they did pass on their paranoid ideas about being prepared...

 

I took good notes - stocking up complete :(

 

Not that I think it will come to a point where I need them, but if it did I wouldn't be one of the ones who wasn't prepared.

 

 

Sounds like they did a good job... Nothing like knowing you have enough Ammo and guns to take on a small Army. Also knowing and willing to live off the land is priceless. It is also funny to me how a few years ago folks thought I was crazy stocking up the way I was. Crazy thing now days is they come asking how to do it and how to store the goods and what~not. Be ready for whats about to happen :D:D

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Living within your means becomes that much harder for everybody.

Watching him is a daily booster-shot incentive for me to live within my means :lol:

 

Is it just a non-stop parade of process servers and repo guys or what? :lol:

No, nothing like that at all. He has no credit at all,...at least, not in the "normal"/CRA/TL sense of the word. He drives an old beater he got for $50. He gets 2 checks every month("disabilty" and a small pension check) totalling about $1300 a month. He pays $100 a month

rent, $50 a month for electric, $50 a month for cellphone, and about $75 a month for car insurance. He doesn`t do any kind

of work unless he feels like it, or HA$ to due to being prematurely broke and unable to find anyone else to lend him money.

 

I`ve known him many years, and we used to work at the same place. I remember when he first got his disability windfall,

and stupidly blew through several thousand dollars like a drunken sailor on long overdue shore leave, with nothing left to

show for it. Anyway,...I remember when all he got was just his disability check, and for quite some time, he managed to squeak

through the month on just his disability check. Sure, he`d be pretty darn broke the last 3-4 days of the month, but he managed to

squeak through until his check came. Later on, he started borrowing small amounts of money($10 here, $20 there) from local people

here so he wouldn`t have to tighten his belt the last few days of the month. Of course, when he got his check and paid those people

back(which he always did), he now had less money to see him through the month than he did before he started borrowing, leading

to him borrowing a little bit more money from a few more people to make up the shortfall. Can you see where this is going? :D

 

Fast forward 3 years, and he now finally starts getting a monthly pension check, as well. Not a LOT, mind you, but an extra $250 or so

a month represents about a 25% increase in his income. Problem solved, right? Or so you would think? ;) NOT A CHANCE! :P

By this time, his main check was GONE in less than 2 weeks, so his borrowing to make up the shortfall had increased dramatically

over the course of the last 3 years, and by THIS time, the infusion of cash from his pension check was barely enough for him to

squeak through till his main check came in, due to the fact that by borrowing so heavily, his main check was fully 50% GONE the same day he gets it, because he now has to pay all those folks back that he borrowed from, leaving him half a check, and his small pension check,

to see him through the month, which it now won`t, which means borrowing money from people again, and paying them out of his next main check, which will leave him maybe half a check, which now won`t make it through the month, even with his pension check added in, leading to him borrowing money so he can make it through to his main check, which by now is looking more and more like his pension check, after he gets through repaying the folks he borrowed money off of the previous month, ad infinitum.

 

This isn`t merely a dog chasing it`s own tail, it`s a human hamster running on a wheel that`s ever-so-slightly increasing in speed each month. It`s just a matter of time...

 

Fast forward 2 more years, and my neighbor had crossed a new threshold - for the first time ever, he elects(?;) to stop paying his rent

from his main check, now drawing it from his pension check instead - because now, there is NOTHING left of his main check within 72

hours of him receiving it - THAT check now mainly(about 75%) goes to repay people he borrowed money from the previous month, so

now he is basically left with 1/4 of his main check, and his pension check, to get through the month, and when he got THAT check

last week, it was GONE in 48 hours. It is now only the 7th of the month, his main check is GONE, he is flat broke, already borrowing against NEXT month`s main check, and is still 2 weeks away from recieving his pension check.

 

A vicious cycle indeed, and one he got himself into, despite my repeated warnings and attempts to educate him, help him set up a budget,

manage his money and live within his means. You can`t help someone that doesn`t want to be helped, not when their idea of "help" is still lending him(or better yet, giving him) some money.

 

He was actually walking around on foot the other day, looking for one of his enablers to lend him money so he could put some

gas in his car to go drive to a potential odd-job so he could make some cash. Perhaps if he hadn`t spent his last $20 on a case

of beer the previous day,...oh, well....it`s gonna get real interesting when winter comes, what with kerosene approaching $5 a gallon,

and him unable to deal with $3 a gallon kero last winter. (and no, I won`t let him freeze...well,...not for TOO long anyway ;) He knows

he can always come to me and borrow some kero to see him through - afterall, I am his friend and neighbor. I just find it exasperating

to see him continue his ever-increasing cycle of borrow-and-spend, and get himself in ever-so-slightly deeper with each passing month.

It`s like watching someone commit slo-mo financial suicide.

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They have been warning of a recession since the beginning of 2007. I will beleive it when I see it. The way it stands now there cannot be a recession till Feb 2009 since you need 2 quarters of contraction and the Apr-Jun qtr was not a contraction.

 

Recession said to last 18 months, destroy hundreds of banks:

http://www.reuters.com/article/bondsNews/i...0080803?sp=true

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They have been warning of a recession since the beginning of 2007. I will beleive it when I see it. The way it stands now there cannot be a recession till Feb 2009 since you need 2 quarters of contraction and the Apr-Jun qtr was not a contraction.

 

Recession said to last 18 months, destroy hundreds of banks:

http://www.reuters.com/article/bondsNews/i...0080803?sp=true

 

Well, if its announced on Feb 2009, does that mean that we started the recession in July 2008. Or does the recession start the quarter after the 2 consecutive contraction quarters?

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Keep in mind that the government statistics are:

1. Redefined into oblivion (or at least meaninglessness) for political ends; and

2. Reported now as whatever the politicians deem appropriate and then revised later to be more correct.

 

http://www.shadowstats.com/

 

Real unemployment is said to be about 13.7%, for instance...

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Interesting article sez the '07 loans are going bad at a greater rate than the '06s, which are worse than the '05s.

 

When the party really got out of hand, the saner lenders grabbed their keys, hats and coats and headed for the front door, while the ones that were on a real bender just whooped it up even more!

 

http://online.wsj.com/article/SB1218059476...=googlenews_wsj

Edited by flacorps

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If the recession occurs it will be the most highly predicted and *hoped for* one ever in history :huh:

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