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If Roubini is actually saying what I think you say, his "proposal" is idiotic and in any event, an example of pure populist demagoguery.

The idea that banks can freeze these rates and forgive enough of the mortgage balance to keep the borrower in their homes is absurd and insane. The largest banks in this country are in actuality INSOLVENT RIGHT NOW. Now maybe you agree with this and think that is more of a reason to implement this proposal, but the market apparently is not aware that these banks are broke because their stock prices do not reflect it and neither do their publivctly traded debt. This proposal would require a subsequent bailout of the banks which we may end up getting, eEven though both the banks and the borrowers shold suffer the consequences of their utter incompetent stupidity.


"Real estate owned by households is roughly $20 trillion and we've already seen an 8% decline which means a loss of $2 trillion." (prof. Shiller)
Oh-uh.... If professors do math like that then we are in trouble! :)
8% from 20 would be 1.6!!! :)
And another point.
The author quoted Shiller that the Goverment cannot stop falling home prices becuase they were doubled in thes decade (in many areas - in the last 4-5 years!).
The the author urge criticize Paulson that he didn't do anything!
Doesn't the author understand that the major problem is too many people in the country bought houses they cannot afford and took too much other debts?
The only way to improve the situation is to change those people's behaviour. In order to do that they must learn their lesson in the hard way.
Any other steps will prolonge the pain, no more.
Yes, it will be painful, but this is inevitable.
And the faster it happen the better for all of us.



Wouldn't this collapse the USD and the bond market?

Straight into Horns of Dilemma!!



I spoke too soon:

No Underwriter Support For Failed Muni Auctions



And then there is the credit rating on all the US govt debt. AAA right now but not for long. Any surprise that China and Europe are crabwalking as fast as they can to decouple their economies from the US economy.

Elaine Supkis

Remember, I didn't write this piece. I hope this is clear to everyone.

I, personally, believe that NO central bank has EVER stopped a depression freight train! The Fed was created to do this thing and it crashed spectacularly in 1930. Draconian laws

I already know what 'fixes' depressions: WARS. The bigger the depression, the bigger the wars. When the 1848 depression hit the world, England lashed out at CHINA. The US took half of MEXICO and burned Mexico City. Etc.

The 1893 panic, Russia and Japan had a war which Russia lost. The 1873 panic/depression saw similar wars break out.

This is why I do not want a bubble/panic/depression event. This is because we now have nuclear bombs and a country, the US, which has this itch to use them.


The house buyers, bought these properties without having anyone hold a gun to their heads. These simpletons should not have bought anything they could not afford. The banks were complicit in offering fancy mortgages with no money down etc. This is not the fault of the rest of the country, if California is loaded with very stupid people, not my fault or any other citizen of the U.S. Let the chips fall where they will. Why should anybody else be liable for idiotic decisions made by baboons in Calif. or any other place? flotsamoverbd

Ron Holland

From Wolf Laurel in NC - I believe Merrill Lynch is correct about the arrival of recession in the United States. The housing downturn is negatively impacting property sales in second home communities in Florida. This is also slowing sales in NC mountain resorts that depend on Florida buyers.

Still the downturn in prices and building of inventories is starting to attract second home buyers from Florida looking for cool temperatures in our mountains. Also the dramatic decline in the dollar combined with weakness in American real estate markets are beginning to interest some bargain hunting European investors.

Ron Holland, Broker/Realtor with Wolf's Crossing Realty. See www.ronaldholland.com Ron markets resale mountain and ski resort properties in NC in Wolf Laurel and The Preserve at Wolf Laurel.

Liberal AND Proud

I remember a day when Republican capitalists were the smartest people on the planet.

Strike another victory for the '60s anti-establishment generation. They've now completely morphed into the most despicable, corrupt, elitists corporatists collection of crooks in the history of the planet.

And they're role model is the ultimate representation of the Peter Principle...George W. Bush.

The robber barons were pikers compared to this group.


Economist Robert Schiller:

"We should be thankful we have Ben Bernake, who is an expert about the Great Depression, at the helm."

Speaking of Bernake, did anyone else catch the obvious PANIC in his voice during his interview yesterday (which was broadcast over the mainstream media's evening newscasts)? Looks to me as if he's CONVINCED that there is nothing the Fed can do to prevent or forestall another great depression. Ugh.


Ex Goldman Sachs president (who sold worthless paper CDOs) Was Named by Bush as Treasury Secretary... SOLE PURPOSE "LET DUBYA Escape out Whitehouse Back Door Before DEPRESSION CRASHES!

Liberal AND Proud

And we're FREEEEEEE...Freee Fallin''...I'm free fallin', baby..your free fallin, baby...free fallin' baby...dollar's fallin baby...housin's fallin' baby...country's fallin' baby...Ben is bawlin' baby...while we're fallin' baby...

Phil the Thrill

I am currently short 10 yr treasuries... I think that's the best short-term game to play with respect to inflation.

I think we should work on an "inflation fund" on this board: interested people suggest ideas and critique those of others. It'd be quite insightful, I think.

If the Man won't protect us, at least we can protect each other!

Elaine Meinel Supkis

The problem is, the time has finally arrived for HIGHER INTEREST RATES. The bonds markets makes this perfectly clear.

The REVENGE OF THE SAVERS has arrived. And as always, savers tend to be bears, not bulls. So the bears will force everyone to reward savers, not spenders. This is why all madcap spending cycles are followed by bear cycles of savings.

So in the next two years, bond prices will jump. As well as plain vanilla CD prices. They have to get us to give them money. And alas, the attempt to steal money will rise. Say hello to taxes again.


There is the question who will pay for the old credits and who will take new credits?
For both there is nobody out there.

Elaine Meinel Supkis

It is called 'bankruptcy' and when empires do this, there is this big 'boom' sound.

Phil the Thrill

Wow, my mom's own muni bond just failed in auction... of course, I learn this after the fact after calling UBS "wealth mgmt" (oxymoron if ever there were one).

Muni's are "cheap" because deflated homes => reduced property tax income => broke munis => defaulted muni bonds.

Elaine Meinel Supkis

Yes, but the INTEREST RATES they now are being forced to pay are not cheap at all, not at all.

You can't resell older bonds from even last week. A rise of 15% in one week is.. UNHEARD OF. Amazing. Wow.


I regretfully say that we live in interesting times...

Please go half-way down this article: you will then see my investment thesis:




Investment Guru

The real estate industry have been saying that real estate is an awesome investment. Well... Like all investments, you have to know when to cut your loses. If your investment makes money then keep it! If your investment loses money then dump it! If your home aka investment is "upside down" then dump it! Emotionally disconnect with your house, let the bank take it back, rent for a few years, and then buy it cheaper from the bank. Many people say that the bank/lenders screwed the homeowners. Well... IT's PAYBACK TIME! The homeowners should hand the key back to the banks, rent for a few years and then buy a better house at a 50% discount. If many homeowners refuse to buy properties from the banks for not less than a 50% discount, then the homeowners will have screwed the banks instead of the banks screwing them. This NEW, guaranteed, money-making system for homeowners will also save them money when it comes time to pay property taxes. Since the homeowners will have bought their home at a 50% discount, their "YEARLY" property taxes will also go down by 50%. It's a win-win situation for homeowners. Have your cake and eat it too! Buy a house at a 50% discount from the banks, and save 50% on property taxes. This system only works if current homeowners are willing to put in some effort in order to make a LOT of MONEY!

Investment Guru

When you hand your house keys over to the banks, say, "It's only business, nothing personal." :)

Investment Guru


Elaine Meinel Supkis

Banks will process US dollars to foreign currencies but they charge a hefty fee. So either you become a FX trader or you get other people to pay you in euros. In Manhattan, there are many Europeans on buying sprees and more and more businesses are collecting euros and then holding them.


small hatters concern..... 25 percent house tax assessment increase......again and again, again......


Let in a million new immigrants, so long as they purchase a $500k home with a min 5 year mortgage. Then a new housing boom...bank woes lessen...all is good.

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