MERKWAARDIGE TOESTANDEN…

18 april, 2010 | door MHAAGEN |

Die lees ik op www.investyourself.com : mensen die met hun hypotheek “onder water zitten” (de hypotheek is groter dan de waarde van de woning) worden, in tegenstelling tot wat je zou denken, niét uit hun huis gezet…  Is i.y. op de grootste bail out gevallen die je je maar kan voorstellen ? Hoe denkt u hier over ? Wij vernemen het graag…

The biggest bail out never noticed

There’s a plot playing out that millions of people are part of and yet you won’t hear about it on your nightly news. You won’t hear about it on financial TV. You won’t hear about it from the Fed. And yet it’s a plan worth virtually trillions of dollars. Yes you heard right, trillions of dollars and yet no one seems to “get it”.

When Obama came out a few months ago and virtually “told” banks that they’d have to take what ever a “short sale” on housing brings them, I began to wonder something. If Obama is forcing this, who’s paying for it?? Not only that, but is it bigger than that? You bet it is. Let’s take a stroll for a moment and see how this all works.

Millions of people are upside down on their homes. According to the real Estate experts, some 7.9 million homes are violently delinquent. So, at first the administration came out with all manner of “help programs” for these problem loans. But, it turns out that over 50% of the mortgages that get reworked, go on to fail anyway. Then they got more aggressive with the plans, with outright “forgiveness” of principle programs. Now right there, someone with a thinking brain would say something along the lines of this…If a bank loaned someone 400 grand to buy a home, but Obama is making the bank forgive 150K dollars worth of that principle…isn’t the bank in the red for that 150K? Well sure they are. Or are they? Follow me on this folks, it’s bizarre.

What we are witness to is the single biggest bail out in all of history. This is bigger than TARP, bigger than all the stimulus ever announced. We are witness to the bail out of the American citizen. This is truly spectacular in scope folks. For many years the American public lived far beyond their means. Big houses, big TV’s, big SUV’s, big malls, big everything, all of it based on loose credit. The housing market credit bubble was the icing on the cake, and yes we’re all familiar with how it ended. Not well.

But, with 7.9 million homes in trouble, with millions of foreclosures, with millions more in some state of delinquency, how on earth are people going to spend money on the big Corporate products like Ipads and 3D TV’s if they have no money??? This was so troubling to the Corporate fascists, they simply devised a truly epic plan. They would let people simply walk away from their debt scott free. Well, wait a minute Bob, that’s insane! Is it?

I have told you all the story of the gent I met in Florida back in February who bought a new vehicle because he stopped paying his mortgage over 12 months ago, yet the bank doesn’t call him. No one has shown up to toss him out. He’s a squatter in a very nice home. He also has an extra 1500 bucks a month in his bank account. So, he went and bought a 600 dollar a month car. Do we know why the bank hasn’t called this guy? Yep. They don’t want his house. It’s now very clear what’s happening. The FED has been buying all those toxic loans from the banks. The bank doesn’t care that the guy lives in his home free and clear, the Fed bought out their portfolio of trash mortgages.

The more I look and listen, the more of this I see. It’s not just housing. I read a letter the other day, where a guys daughter who owed over 10 grand in credit card debt called the bank and said I can’t pay any more. The bank came back with a deal. Nope, not good enough. Another offer came and …nope not good enough. Finally, they told her if she paid $150/month for 2 years (total of only $3600 with no interest), they would call it paid in full! She accepted in a heartbeat. It is less than a month later, and she celebrated her good fortune by going on a cruise to Hawaii

In another instance, his brother-in-law wanted to know if he should stop making payments on everything. He lives in Virginia and his carpentry skills are not as marketable as they were in the height of the boom. He and his wife’s best friend have lived close-by for many years. For the past 13 months since they strategically decided to stop paying their mortgage, they had yet to be contacted by their bank. Not even one letter! His brother-in-law doesn’t understand how they get to pocket the mortgage and spend carefree, including a 10-day Caribbean vacation.

Do you see what’s going on here folks? Corporations only thrive and pay out mega million dollar bonuses when consumers buy their products. But with the consumer tapped out, they have devised a way to bail him out. It’s called the ”Don’t pay, Don’t chase em” plan. People are being encouraged to strategically default on their debt. This way they still have shelter, but they also have 10,15, 20 grand a year to go spend on Corporate goodies. It’s brilliant. Of course it raises the question, “if people aren’t paying, who is?” Well the answer of course is the Fed at first, and then You and I in collective taxes and more inflation as they print more money to buy up the discarded debt.

I don’t know that this approach has ever been tried in the past, I cannot find evidence of it. But there is no doubt in my mind that the Government is going to allow everyone to strategically “walk away” and “start over”, and they’ll mop up the losses. This is really quite an interesting development.

It’s pretty common knowledge that at some point the US was going to have to default on it’s debt. It’s mathematically impossible to pay back. But what happens if they don’t default on Government debt, they just let everyone in the country default on theirs, then mop it all up, and then via use of a VAT tax, etc, on all the new consumer spending…try and spend down that debt? I don’t know folks, but from up here in the cheap seats, it seems to me that’s what we’re going to find out.

This is exactly why the Fed keeps telling us how they are going to keep monetary policy very cheap for an “extended period”. This is why they also left the door wide open for them to come back in and buy up more toxic trash any time they want. I believe that they’ve bought up a huge portion of the already foreclosed mortgages, and as more and more people walk away, they’ll re institute the plan and start buying more toxic crap again. I think the reason so many people are not being kicked out of their homes is because the banks got paid, and Uncle Sam knows if they go buy another house, they won’t have money to spend on goods. So, they are just left alone, ignored. Squatters.

This is really biblical in nature. Considering that just this week we found out foreclosures are up huge, breaking all the records again, this has implications that none of us are really sure about yet. But given some time for all this to sink in, I’m sure we’ll be able to put the dots together and draw the right picture. Here, take a peek at this headline:

07:50 AM BofA (BAC), JPMorgan (JPM) and Wells Fargo (WFC) could face up to $30B more in losses on home-equity loans, almost as much as analysts’ estimates of profit at the three banks this year.

That’s just three banks. Can you imagine the amount of money ALL of banking is losing over this? Its a staggering number, and it’s so big I believe they’ve decided to just let things sit, let people do what ever write down they want, or don’t even pay. Maybe in the future, someone will come calling, but right now they’d rather have the consumer spending his mortgage payments on lawnmowers, TV’s and Ipads. Expect better retail numbers because of this. But just “know” that it too is unsustainable. Unless Uncle Sam decides to give everyone free homes, at some point, squatters have to get kicked out. So also imagine the incredible amount of homes that are going to continue to come to market.

They can try and “let things be” for quite a while, but all it does is put off the day of reckoning. That day will still come.