Walking Away Fad Will Destroy Entire Economy

First snow storm in weeks on our mountain!

January 30, 2008

Elaine Meinel Supkis

Everything can be turned into assets and all things including gold can suddenly turn into debits. I see a need to explain this since people imagine there is some rock-solid form of asset that always gains in value no matter what and can be used as 'money' at all times. Nothing is that easy or we would all be trillionaires. Recently, there has been a madcap belief in using our houses as assets rather than necessary evils that drain our incomes. The crash of the housing asset bubble has returned housing to its traditional role as a necessary overhead COST rather than as a positive money flow. Time to talk about 'jingle mail' where people are not honoring their promises and are walking away from foolish 'investments'. This has a high social and economic cost we will all be forced to pay.

From Mish:

If banks can make "business decisions" to ignore risks, to lend money with no down payment, and fire people at at the first sign of trouble without any remorse, why shouldn't consumers be able to do the same?
*snip*
Will Deutsche Bank and the other 20 lenders attempt to walk away from this mess as a business decision? You bet. The business of walking away is going to be booming for a long time to come. This is yet another reason why Things That "Can't" Happen are about to.

This isn't 'walk away'---this is SKIPPING OUT OF TOWN. I hate this sort of thing. I had a rich neighbor who used his mansion and other properties in this area to gamble in the Dot Com markets. He played derivative games and when that crashed in the scandals we saw back then, he lost everything he bet. Since he did this by signing promises with banks that he would pay back and he used the value of his properties to do this, when the crash happened, he went belly up. He dealt with this by skipping town. After vandalizing his mansion.

Now I live next door. About a quarter mile away. We both share this part of our small mountain outcropping. When he did this act, he lowered the value of my own house. Not to mention, I was now worried about his mansion burning down due to the teenagers in the village below us. Recently, the poet, Frost, had his museum farm house totally vandalized by drunk teens. So it is a constant worry. as it was, another family below the mansion also abandoned ship and teens raided the garage for drunk parties.

So the irresponsible gambling of my rich neighbor turned into a crime when he vandalized his house significantly. Then this leads to the temptation to commit arson, etc. A cascade of criminal actions ends up destroying the community. This is why 'skipping out' is frowned upon.

I am a traditionalist. I happen to believe that old ways of doing things is often the best. Actually, most 'get rich quick' schemes are not new at all but often were figured out hundreds if not thousands of years ago. These thing flourish in 'boom' or 'bubble' times which always are times when there is 'easy money' being lent. Many bubble schemes are launched by governments seeking money for wars but reluctant to tax the populace. Traditionalists want harmony, peace and simple pleasures. We plan for the future, we look forward to a ripe old age where we can be surrounded by loving children and grandchildren. I suspect much of the fear we see these days is due to people ceasing to have children and so they rightfully fear being able to afford to be old. More about that thought, later.

The most precious investment is the family. This has been breaking down for the last 40 years as we sank into collective debt. There is no mystery that the destruction of the family has run right alongside the increase in debts. Both national as well as individual. The prime economic powers on earth are all seeing a collapse of the family. In Japan, the family has ceased to grow to an astonishing degree with the children never leaving home and the marriage/child bearing rate continues to fall. In some minority communities in America, 80% of the children are born out of wedlock and don't ever know their fathers. This is due to the collapse of working wages and increasing debts of society.

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Are you stressed out about your mortgage payments?

Do you have little or no equity in your home?

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You CAN have the foreclosure REMOVED from your credit!

It's important to act now before it's too late!

Wow. Live for FREE by stiffing the banks! Live for FREE if you don't honor your word! Hey, the people at the very top do this all the time! And they do.

Let's review why our banking system, our governments and our families are collapsing: it's OK to lie, cheat and steal. And to be dishonorable. And to play risky games like having sex outside of marriage or children out of wedlock. I did this in my wayward past. But then, men were not interested in marriage. I discovered that when I got property and built up capital, men wanted to marry me. When I was in college and got pregnant, no one wanted me. When I was an old hag at 40 years of age and had property, I had guys down to the age of 25 banging on my door with the parson in tow.

I had girlfriends of 90 years old who, when a husband died, had marriage offers. But at the other end of the scale, people are struggling. Children are expensive to raise, I have done this more than once. They can be viewed as generational investments. If raised properly. It is the obligation of the elders to help them get into property. I started off with rental/owner properties when I was my kid's age. Now they are doing it, too, with the family nest egg invested in their home/rental combos. These are held until the kids can live with a token mortgage for tax deduction purposes. Then they can buy a house for themselves only.

The entire clan looks after each other's properties to insure all are run properly. I know many tight immigrant families who do this. They end up jointly owning a dozen properties, half of which are rent generating properties, often in poor neighborhoods where the rents are higher than the cost of the buildings. One has to be tough to be a landlord in these places, of course. I filed my fangs being a landlord of a good property which was well run but in a slum. I would sweep the sidewalk of the entire block, hassle tenants of other landlords for 'airmailing' their garbage and I ran a street patrol that grew increasingly powerful and successful as we improved the crime stats. Today, that neighborhood is called 'Park Slope' and is very wealthy.

But most of the house buyers in this last bubble were irresponsible and foolish and note this web site urging 'walking away' after living for free for almost a year: they show pictures of smiling, happy, intact families. I assure everyone reading me, the families playing this game of cheating banks, cheating the neighbors and living like deadbeats will lead to DESTRUCTION. They teach their children bad morals and will cheat each other. I have seen this all my life. When the lights went out in NYC in the middle of our city's bankruptcy in the 1970's, many of my neighbors thought this was a grand opportunity to loot. They burned down the neighborhood and I moved out. It remained a horrible shell of empty, crime-filled ruins for 30 years. Before this looting, it was poor but intact and vibrant! All the stupid things they looted didn't improve their lives. They lost everything to gangs and drug dealers who moved into the ruins. They lost everything.

Morals matter. The attitude, 'I'm skipping out on America/devil take the hindmost' is dangerous. Thinking, 'all the rich steal, I will steal' leads to anarchy.

A message to other ruling elites: YOU BASTARDS. LOOK AT WHAT YOU ARE DOING, YOU ARE DIGGING YOUR OWN DAMN GRAVES! My family has a long institutional memory. We know that if we screw up, the price will be paid by our heads in revolutions, riots, wars and insurrections. Heads can roll. The need for the rulers to set a good example is life and death. When they fail, all fails and this is highly explosive. Treating the working class well is primary. Indeed, it should be of highest concern, not lowest regard. Yet we are in a culture where people with lots of money and power are setting a very bad example to everyone else. The Moral Majority has become the Amoral Walk Away Majority.

When the honest, good people of the land ape their 'betters' when these betters are the worst, we get social chaos and a collapse of the government as well as the economic life. Roman orgies, anyone?

This chart is from the Walk Away web site. Note how bankruptcies are relentlessly climbing. More liquidity can fix this only if housing rises in value. And it can't rise if incomes are being eaten alive by inflation and the collapse of rewards to the working classes who moved into the middle class for the first time right after WWII.

Mish: Things that 'can't' happen.

The party is over once the ability and willingness of banks to lend, or ability and willingness of consumers and businesses to borrow is exhausted. Those signs in place today for all but ostriches.

One thing I want to be clear on is that I am not calling for another "great depression". We could have one, but I am inclined (at least right now) to doubt it. Japan went through 18 years of deflation and the world did not end. The US will survive deflation as well.

However, we are likely to see something the US has not seen since the great depression: a falling standard of living and a declining middle class. Many things will be A Matter Of Choice but no one alive knows exactly what choices government will make.

Comparing Japan's fake depression to our looming real one is a mistake many economists make. Japan never had a true depression! This is not when prices fall. It is when INTERNATIONAL TRADE COLLAPSES. Far from it, Japan's trade has shot upwards like a rocket, an unprecedented 6 years of huge increases every year! They are #1 in trade profits! They are #2 in trade surplus. Far from a depression, this is a roaring economy. One proviso: it is based on keeping prices in Japan low as possible so they have depressed wages and this has caused the collapse of working class families. Japanese families were famous for loving children and being very strong with no divorces. Well, divorces are on the rise but what is more telling is, NON-MARRIAGE is rising much faster! There is no marriage in the first place, anymore.

Japan's elites are marrying. And they can afford children. But the workers are not able to buy much of anything including the ability to have children.

Interest wanes in cars, once a must-have for young people

Some men cannot afford the costs of owning a car, while others simply have no interest, raising concerns among auto industry officials in the nearly saturated domestic market.

"I usually ride a bicycle to go out shopping, and there's my parents' car at home, so I don't have any particular interest in having my own car," said a 22-year-old man in Nagoya who has a driver's license.

The man, who quit a full-time job late last year, says few of his friends have their own vehicles.

Full time jobs are hard to find if a man is young in Japan. They are living at home. The Japanese call men like these, 'NEETs'. They play video games online and work only in the most desultory fashion if at all. Auto sales in Japan are now lower than in 1983 and dropping. The depressed workers are giving up even on the dream of owning a car. The rest of the world can't sell Japanese imported cars if the entire market is collapsing there. But Toyota doesn't give a hoot. They are selling like crazy and making increasing profits overseas and this depends on a weak yen and the only way to get that is to depress wages at home which kills the home markets but makes powerful sales abroad.

A fatal choice, I would say, in the long run just as the US turning our culture into a pro-deadbeat culture is fatal to us.

A survey by the Japan Automobile Manufacturers Association (JAMA) also found that the ratio of those who do not own a car jumped from 21.3 percent in 2001 to 32.1 percent in 2005 among men in the first half of their 20s.

The percentages for those in their 30s and older showed little changes during the same period.

JAMA officials attribute the decrease in ownership among young men to the widening income gap.

We are copying Japan! Depressing worker's wages. Killing the ability to have families. Degrading everyone into deadbeats. Rich deadbeats are protected in various ways by their fellow elites. Working class deadbeats die. Often, in prison. Rich people like Donald Trump can lose everything and then get it all back really fast, making deals. Workers who hit rock bottom seldom rise and their children pay a very heavy price. If American males follow the path of the Japanese males, we will see a contraction worse than the 1930s. Back then, there was a desire to own a car, to build a family despite the depression, there was this hope.

This time around, has that died? Will young men dream of marriage, family and love? Or even fast cars? Or will they lose all their dreams? Anyone who can tap into this future potential is very dangerous. We can see tiny bits of this with the Ron Paul energy that is now rapidly fading due to the ruling elites removing him from view and letting us know he won't be allowed to even address these issues. One funny thing here: Guilliani, when he quit last night, admitted that Ron Paul was the only good person in the debates and was right! I grind my teeth, hearing this sort of thing.

Saving becomes a campaign issue

Concerns are fueled by a combination of events that affect millions of households. Traditional pensions that paid a set amount for life are being phased out in many workplaces. The 401(k) savings plans that have replaced them do not assure enough to retire on, except for those who have saved carefully for many years. They are also vulnerable to the kind of sharp market downturns that rattled Wall Street last week.

Almost 1 in 2 workers -- 48% -- has less than $25,000 in savings, and 71% have less than $100,000, according to a 2007 survey by the Employee Benefit Research Institute.

On top of that, more than 75 million Americans, or about half the workforce, have no opportunity to participate in a retirement plan. Experts say many of them are headed for a bleak future.

Too many people were thinking their houses which are money machines---which they are NOT unless they include a rental, they are money sinks, not profits unless one manages to pay off all debts. All housing has a big overhead in the form of repairs to mechanicals and structures, yard work, etc. Ever call in an electrician or plumber? Replace roof shingles? We are talking many thousands of dollars here. Out of pocket.

Holding gold is the same. You have to protect it and care for it which is why it ends up in vaults in caves.

The withdrawal of pensions from workers has been insidious and long run. Many can't afford to put money in 401k programs due to inflation and others who do can end up being burned by dishonest dead beats who infest the investment arms of the banking system. An army of Evil Kerviels screwing up everything. People will walk away from houses they bought last year but walking away from a lifetime home is hard and the downside will show up over time as rootlessness and despondency builds up. The fall from grace will be hard and last years. The loss of flower patches or front porches where one hung out with friends will torment the night hours. Moving to some faceless town in another community will not heal these social wounds.

In Arizona, I used to watch this at work. People would give up on real communities in Detroit, say, and move to Tucson. At first, they imagine they are in paradise. But they fall apart because there is no community unless they join the university community or the military community. Building a new life is not as easy as people imagine. This is why families matter. You build them and they can expand near and far and still be a community. This is why immigrants are stronger than people atomized by economics. They tend to cling to one neighborhood. Bit by bit, they buy up neighboring houses and commune together. When I was Mrs. Levy in NYC, my husband's family lived all around us, aunts, uncles, cousins, grandparents. All within walking distance.

Here in upstate NY, we forged another family which includes the Levy family and some of them moved up here so we are together in a community up here and this is how it works. But you need family connections. The people 'walking away' from new-bought homes too expensive to hold were atomized by moving into houses they couldn't buy, often far from work and friends. And now they will be rootless as well as far from home.

Bond ratings set to drop on insurers tomorrow

Wall Street bond rating agencies are poised to downgrade two big bond insurers, Ambac Financial Group and MBIA, even though New York state insurance regulars would like to get a postponement until the state can develop a bailout package, CNBC has learned.

Losing a Triple A rating could be devastating for the bond insurers, preventing them from drumming up new clients -- and possibly forcing them out of business.

Barring some last minute agreement on a bailout package, the downgrades could come as early as Wednesday.

And why are they going bankrupt? They insured loans to people who couldn't possibly pay any ARM, etc, loans. The spread of deadbeat destruction is moving outwards, sucking in all systems. We are in a debt crisis that was started by both easy money loans and 100% financing. Over the centuries, bankers figured out that if a home buyer doesn't plonk down at least 20% of the value of the house, the temptation to 'walk away' is irresistible. And they don't resist it.

Indeed, the temptation of businesses, investors and homebuyers to 'walk' grows as the insurance covers ever-closer to 100%. Here is some thoughts from an email sent by a reader who wishes to remain anonymous:

OK, let’s expose this magic money and prove the Emperor has no clothes. A simple example will show how this works. Let’s take 26 people and call them Mr. A, Mr. B, Mr. C, etc. Each of the 26 are identified by the letters of the alphabet.

Mr. A writes on a piece of paper, "I.O.U. one million dollars" and signs his name. Everyone else writes out an identical note. Mr A. then hands his I.O.U. to Mr. B. Mr. B hands his signed note to Mr. C., and everyone else hands his piece of paper to the person on his right.

What we have just created are 26 instant millionaires. Each person is the recipient of a million dollar asset–a note promising to pay him a million dollars. The fact that he does not tell anyone that he also has given his promise to pay someone else a like amount is not revealed. It is called on "off balance sheet" liability. He knows he owes it, but he does not fess up to it. From a realistic standpoint, nothing has changed. Every person is the same off as before he became an instant millionaire. In fact, he could take the note to a bank and have it discounted and added to his checking account. Now the bank has the basis to make 10 million dollars worth of loans to other customers. There is nothing backing up the I.O.U. each person gave to his neighbor. Neither is there anything backing up the cash that Mr. A received when he gave the note to his bank in exchange for cash. The pieces of cash in various denominations have nothing backing them up except that they can be redeemed for other pieces of paper that are backed up by the promise to be redeemed by other pieces of worthless paper.

As we can see so far, nothing of value has changed hands. There are trillions and trillions of pieces of paper mixed in with I.O.U.s from people all over the globe. If someone said to the 26 people in our original example, "on the count of three, everyone destroy your neighbor’s I.O.U. that he gave you," in reality nothing would change. No one would suffer any negative consequence. They all might feel a little poorer, but it was all "paper profit" just like when a stock goes up and then falls back to the price one paid for it. It’s all fantasy.

The bank, on the other hand, gave out pieces of paper called cash to Mr. A for the I.O.U. he claimed as an asset. But it was worthless. The bank can seize the balance of the funds in Mr. A’s checking account and request that he pay the difference. If Mr A already spent most of that money, the bank is out of luck and has to write it off, and that will reduce the profit it makes from collecting interest on the money it gives out to other people bringing in phony I.O.U.s. Since the bank collects interest on phantom I.O.U.s, it doesn’t hurt it when it has to give some of that up. The banking system has no skin in the game, so they should not complain when they don’t collect as much ill gotten gain.

The moral of the story is that the whole money, currency, securities, CDO, SIV, etc., system is based on nothing. So when some of this nothing disappears, there is no real loss either–only a psychological loss as in the case when Mr. A. had to destroy the I.O.U. his neighbor gave him. But he also gained in the sense that his I.O.U. to Mr. B became worthless also. It all balances out in the end.

The cascade of problems caused by the loss of profits is considerable. I keep pointing out that FLOW matters when we talk about either trade or finances. When the EXPECTATION of future profits dies, many other things attached to the possibility of future prospects also die and we get a negative flow. This cascades out of control if too many people destroy too many expectations of future earnings too fast.

UBS Reports Record Loss After $14 Billion Writedown

UBS AG, Europe's largest bank by assets, had a record loss after raising fourth-quarter writedowns on assets infected by U.S. subprime mortgages to $14 billion.

The Zurich-based bank announced today a net loss of 12.5 billion Swiss francs ($11.4 billion) for the fourth quarter, almost double the median estimate of analysts surveyed by Bloomberg. The annual shortfall was about 4.4 billion francs, the first since UBS was created through a merger a decade ago.

UBS fell as much as 4.1 percent in Swiss trading as its loss exceeded those reported earlier this month by Citigroup Inc. and Merrill Lynch & Co. The collapse of the U.S. subprime mortgage market has led to more than $130 billion of losses and markdowns at securities firms and banks since June.

The banking crisis continues. The US is floundering and the rise in 'walk aways' is dangerous if the walkers are part of the world's #1 economy which happens to also be the #1 destination of world trade. The flow of trade will shift and change but we will pay a price. We can look to Japan to see what that means. It means the end of the 'American Dream.' And the beginning of the 'American Nightmare.'

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Comments

[shargash]

I'm certainly not going to defend walking away from one's morgtage. However, one of the benefits of a recession (maybe the main/only one) is that it destroys debt that is choking off growth.

If Americans are going to have any money to save, invest, or spend, they are going to have to unload their crippling debt burden. Bankruptcy used to be a way to do that, but the financial lobby was able to get Congress to make sure that you can never get out from under your debts.

That is going to drive us to (at least) a recession, and it is going to make it nearly impossible to get out of it once we're in it. We need a change to the laws to make it possible for people who made foolish decisions (or were unlucky) to restructure and get on with their lives. Until we have that, we're going to have impromptu and destructive means of doing it, such as just walking away.

[EEngineer]

Elaine, I like your point on atomization. I think the trends of suburbanization (crowd dispersal) and careerist job hoping have essentially dissolved the community bonds of a large percentage of the US middle class. This normally politically active segment has thus been rendered apathetic and voiceless. The result is a national discourse that now closely resembles a TV game/reality show.

[EEngineer]

At least we haven't yet descended to the point where you have to sell yourself into slavery to clear your debts. Yet.

[JSmith]

Well, I'll be damned: an article I agree with! (In substance...)

"This isn't 'walk away'---this is SKIPPING OUT OF TOWN."

Business will be good for Skip Tracer, Private Eye.

"I think the trends of suburbanization (crowd dispersal) and careerist job hoping have essentially dissolved the community bonds of a large percentage of the US middle class."

I think that trend has been apparent for 30 years.

[Canuck]

Hmmm, Declining car ownership...

Hey look a solution!

http://www.zipcar.com/

[Elaine Supkis]

Hi, Canuck. Long time, no see ya. Winter warm here. I suspect where you are, too. Weird, isn't it? My road in January has been mostly mud.

Smith, you win a lollipop for being agreeable. Good boy. Heh.

[Elaine Supkis]

Shagrash, bankruptcy has some good factors but only if rarely invoked. When Trump was allowed to stiff everyone and go belly up, he should have been SHUNNED.

Instead, he got more money and even had the chutzpah to start a stupid TV show, 'You are FIRED!' He should be in prison. He set a very, very bad example. All of his sort should suffer some slings and arrows as punishment when they do these things. It is the only way to keep a nation from going on bankruptcy binges.

I hear so often people gurgling with joy over the idea of cheating the hard working Chinese or the Arabs who own oil out of the money we pay via going bankrupt. Shame, shame, shame. If we don't want them to get wealthy, all we have to do is not buy their stuff!

Not cheat them. This psychology leads to riots, looting and mayhem. I have lived through this.

[Canuck]

Oh I've been lurking all along, not much to say really.

Bitch'n cold up here now.

Recent Edmonton conditions, these are not normal are but seasonal temps. I've seen at least 7 semi-trucks broke down from cold in the middle of the road over the last 3 days. That's unusual even when it's this cold.

Outlying rural areas hit -44 C night before last.

Sky cond., Temp(C), Humid, Dewpnt(C), Wind, Windchill(C)

29 January 2008
8:00 Cloudy -35 64 -39 S 4 -40
7:00 Cloudy -35 63 -40 calm
6:00 Mostly Cloudy -35 62 -39 WSW 4 -40
5:00 Clear -34 66 -38 calm
4:00 Cloudy -35 63 -40 SW 5 -41
3:00 Clear -33 58 -39 SSW 5 -39
2:00 Clear -32 64 -36 calm
1:00 Clear -32 66 -36 calm
00:00 Clear -32 65 -36 calm
28 January 2008
23:00 Clear -32 65 -36 WNW 4 -37
22:00 Clear -32 67 -36 NW 4 -37
21:00 Clear -32 60 -37 WNW 13 -43
20:00 Clear -31 58 -37 WNW 8 -39
19:00 Clear -31 59 -36 NW 8 -39
18:00 Clear -31 56 -37 NW 11 -41
17:00 Sunny -31 53 -37 NW 18 -44
16:00 Sunny -30 53 -37 NW 18 -42
15:00 Sunny -30 54 -37 NW 21 -43
14:00 Sunny -30 55 -37 NW 26 -45
13:00 Mainly Sunny -31 57 -36 NW 26 -46
12:00 Mainly Sunny -31 55 -37 NW 32 -47
11:00 Cloudy -31 56 -37 NW 26 gust 37 -46
10:00 Cloudy -31 58 -37 NW 26 -46
9:00 Cloudy -31 58 -36 NW 28 -46
8:00 Light Snow -30 58 -36 NNW 26 gust 39 -45

And I don't feel one little bit bad about thawing my truck out for 15 minutes.

This is our first week of wicked cold, stay tuned for at least one more before March.

http://www.nationalpost.com/rss/
story.html?id=271864

http://canadianpress.google.com/
article/ALeqM5i2ZnJwTC7ZRe554Fr
87a8tDTOKLQ

Enjoy the mud, it's better than this.

[Elaine Supkis]

Ouch. I have been in -40 before, while in a TENT. Heh. It was weird. When it is that cold, the chickens have to move into the house.

Back then, I had lovely scottish sheep. The chickens lived with the sheep and slept on their backs, burying their legs in the wool. But tat winter, the -40 weather killed their combs which never grew back.

[Canuck]

Killed the combs!

Maybe that explains my receding hairline :)

[Elaine Supkis]

No combs but lots of brushes....

[Greg]

A message to other ruling elites: YOU BASTARDS. LOOK AT WHAT YOU ARE DOING, YOU ARE DIGGING YOUR OWN DAMN GRAVES! My family has a long institutional memory. We know that if we screw up, the price will be paid by our heads in revolutions, riots, wars and insurrections. Heads can roll. The need for the rulers to set a good example ..

Ok LOL........"A message to other ruling elites"........the supposition then is that this is a message from ONE RULING ELITE TO ANOTHER???? is this correct?

The need for the rulers to set a good example...Elaine, are you one of these rulers that is setting a good example????

[Elaine Supkis]

I am a bad example. HAHAHA.

And I wrote that for dramatic effect. The elites are not all rich. But letting things get out of control like it has lately is a bad idea, very bad. Maybe they imagine private guards will protect them.

[EL JOHNNY]

Oh EMS,

I wish I had that nice warm tent of yours that night I slept in -10 with only an axe, 2 sleeping bags, and some matches.I lived in Alaska in the 1970s. It was frosty to exist like as Survivor Man.

Right now, its 68 degrees here in Brownsville, Tx. and it is very nostalgic to hear people comment on the cold. It gives me a warm feeling.

Many of the towns and cities here in Texas were found by speculators from New York; the city of Houston being its greatest example. It succeeded. Many were total failures. Products of boom and bust economies, or victums of the unforgiving environment.

We have this tradition in our history of building and abandoning our towns, villages and farms. Often times, the land was free. All it took to be rich and make the towns and farms work, was work. If it did not work you, could walk or ride to the next town.

The principal is timeless and is still the same.

Who among us would turn down free land?

Do not blame the walk away Renes, blame the foolish lenders who made the loan, using someone else's money from someone else's country....as you point out.

Just because someone is a loner does not necessarily mean that he/she is a bad person.

In 18 century America, solitary figures would push out into the wilderness looking like flowing figures from the bible, alone.

They would hunt, trap, and trade with the Indians. Soon, the settlers would be right on the loner's tails. When the loners felt the settlers moving in, the loners would head west, pushing further out. They disliked the rules and social constructs the emerging community was bringing with them. They lived free. They needed space. They sought companionship once a year at the
round-de-view, and eros with natives and maybe a lost ewe or two.

When they grew old and moved to town, their journals indicate an utter sadness from not being out there alone.

They made positive contributions to their century by supporting themselves alone, without trashing their community, too much.

Today, we loners have electronics where communities can be built at long distances. Connected to each other by the wind and the electro magnetic waves,our E community can be just as enriching, satisfying and challenging to the inhabitants as those of yesteryear.

EMS...connecting to this blog for me is participating in the community I need and want but is not available on this Mexican border town. Gracias for being so civic minded.

It is always a pleasure being with you townies.

[OC]

So u think u can just walk away after pissing off the communist and terrorist Sopranos without payback???

Really, that easy huh???

[Elaine Supkis]

I grew up on top of high mountains and had to survive in the desert. At one point, we lived in Death Valley before airconditioners were available.

Loners: the land was NEVER 'free---it was violently stolen via using armies with guns fighting barely armed stone age natives. The death toll was terrible.

[Greg]

LOL sorry Elaine i should rephrase the question.....

Are you one of the ruling elite??????????

[EL JOHNNY]

NOTICE TO ALL SEEKERS OF FREELAND

DUE TO THE GENEROUS EFFORTS OF MR SEWARD,

FREE LAND IN THE AMOUNT OF 200 ACRES IN THE

PRISTENE WILDERNESS OF ALASKA IS NOW

AVAILABLE WITHOUT REGARD TO RACE, RELIGION,
OR ETHNICITY,FOR IMMEDIATE OCCUPANCY TO ANY
MAN,WOMAN, OR CHILD WHO CAN STAKE THEIR
CLAIM AND MAINTAIN CONTINUOUS OCCUPANCY FOR
2 OF THE MOST CHALLANGING YEARS IN YOUR SHORT LIFE. FEE SIMPLE WARRANTY DEED WILL BE ASSIGNED TO ANY AND ALL HOMESTEADER UPON SUCESSFUL, CONTIGUOUS, COMPLETION OF 2 YEAR 0CCUPANCY.

[JSmith]

I had some time this AM to read this article in more detail...

"It is the only way to keep a nation from going on bankruptcy binges."

The revised bankruptcy code will help there!

I saw that 60-Mins that "Mish" was writing about. One Kevin Depew was quoted in Mish's article as saying, "But [a person interviewed on "60" who plans a walk-away] is outlining a perfectly rational economic argument for exiting the mortgage contract and is willing to accept the full penalty - credit impairment - for her actions."

Fortunately or unfortunately as the case may be... it's not that easy, and "credit impairment" isn't the full penalty. The implication is that you walk away, the bank forecloses, done and done. However... after foreclosure, the house is sold at auction and the sale price at auction (if any!) is used to defray the original mortgage. If the auction price is lower than the mortgage - which is very likely, these days - the spread, called a "deficiency", is treated as an unsecured debt and the bank has the same right to go after you as they would on a credit card debt.

So I expect that many of these "walkers-away" will learn to their chagrin that the banks still own their ass.

(But if you were dumb enough to pay $350,000 for a 1200-sq-ft house like the people on "60" did...)

[DeVaul]

I saw the 60 Minutes show that finally talked about the subprime mess. It vindicated Elaine in stating that the housing bust occurred in 2005. Wow! They finally admitted it.

There were two couples shown. The black couple claimed total ignorance and said they signed the papers as a way to get out of the neighborhood they were in. I can actually believe that to some extent.

The white couple claimed they knew what they were doing all along and had a "plan", but it didn't work out because the economy and interest rates did not go the way they expected them to. They planned to walk away as a "business decision" in the same manner as Trump and his friends always do. (I wonder if there are any deficiencies hanging over Trump's head?)

I found the white couple to be somewhat cold-blooded and very calculating. I think that despite the attempt to enslave everyone via that bankruptcy law, it will not work in the end. If someone is upside down 100 grand with no way to pay it back in their lifetime, they are not likely to be worried about any deficiences that may be left over after foreclosure.

As millions walk away from their homes, the banks that would inherit the "deficiencies" will probably go under and never get the money back that they created out of thin air in the first place.

Regarding the morality of the white couple, there is an old saying: what goes around, comes around. Our leaders have shown us how to live, and so now we live like them.

[Elaine Supkis]

Correct, DeVaul. You are a moral person who knows the downside to life. We learn harsh lessons!

Yes, if the leaders are amoral wolves ravaging the land, everyone wil imitate them. This troubled our Founding Fathers who right off the bat, got into trouble over the issues of handling the natives [kill them or chase them out was the hideous solution] and slaves [our nastiest and most brutal war was over that issue].

[CK]

Stalin's Law ( restated )
If one couple walks away from an upside down mortgage debt, it is an immorality.
If 10,000 couples walk away it is an community disaster.
If 3,000,000,000 walk away it is a statistic.
If a nation of 300,000,000 million walks away from its debts it is a victory.

[JSmith]

"They planned to walk away as a "business decision" in the same manner as Trump and his friends always do. (I wonder if there are any deficiencies hanging over Trump's head?)"

Why... no. Not "in the same manner" at all.

If you're Donald Trump (or Trammell Crow, before he died), or someone else for whom real estate is your business... you do business under a corporation so that your liability is limited. The corporation may be a few hundred million in the hole, but the creditors aren't going to come after you, peersonally (unlike these people who have signed mortages personally, and are making a so-called "business decision". Them, they'll go after... big time.)

[JSmith]

Correction... it appears that Trammell Crow is still alive, at age 94.

[DeVaul]

I've worked on countless litigation where the owner signed as personal guarrantor in addition to the company he owned or ran. The result was always the same. No liability if the person was rich or connected.

I'm sure Donald signed some personal guarranties throughout his career, and I am equally sure he never had to pay up.

[DeVaul]

BTW, Donald made a career out of doing this. You cannot blame people for imitating him when he is idolized all his life for losing millions on bogus deals.

[Elaine Supkis]

Gads. Der Trump worked in NYC when I and others were trying to drag that city out of the gutter of bankruptcy. And he was the Clown. We all despised him.

What a jerk. And I never, ever went bankrupt. He did. So who ends up on the cocktail circuit and on TV? And what are the masses who watch him?

BAAAAAAA.....

[Elaine Supkis]

And note his married life. A wreck. The poor people imitating him don't know how he stays afloat. Connections within the Community/clan helps a lot.

Most Americans don't have multimillionaire cousins to lend a hand and forgive. Indeed, these same people will go after the average deadbeat hammer and tongs, in spades.

[Elaine Supkis]

And I can tell stories of people who tried to stiff the wrong clans. Both Italiano and Jewish. Accidents happen. You never know when you might fall off a bridge or get eaten by alligators.

This is why playing deadbeat isn't wise in the long run. Eventually, you end up owing the Mafia or someone.

[JSmith]

"You cannot blame people for imitating him when he is idolized all his life for losing millions on bogus deals."

Yes you can. They're not "imitating" him because they didn't structure the deal in such a way so they're not on the hook if things went in a southerly direction. They're just, as Elaine says, skipping town.

Skip Tracer will be hounding them for years to come.

"And I never, ever went bankrupt."

Were you playing on the "midtown brownstones" level, or the "skyscrapers and office parks" level?

[cheap canada goose]

There are no trails of the wings in the sky, while the birds has flied away.