Home › Forums › Financial Markets/Economics › Trying to understand inflation
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peterb.
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September 21, 2009 at 5:05 PM #460669September 21, 2009 at 7:42 PM #459873
patientrenter
Participant[quote=jpinpb]But with nothing to lose, they can walk. I just read about strategic walkers. With the way it’s set up, seems like a neverending problem.[/quote]
It’s only a problem for future taxpayers. They haven’t gotten the bill yet, so they haven’t said much.
But the system of non-recourse loans with little money down does achieve one goal: it puts paid to any concerns about unstoppable deflation. It also enables existing homeowners to get out at a higher price than they would otherwise. Homeowner A sells a home to Buyer B, receiving $500,000 that A gets to keep. Buyer B gets to default/mod, ultimately paying $300,000 for the home. How can Homeowner A walk away with $500,000 when Borrower B only pays $300,000? Because Future Taxpayer C is made to pay the extra $200,000. Great system, for A! Not so good for C.
September 21, 2009 at 7:42 PM #460063Participant[quote=jpinpb]But with nothing to lose, they can walk. I just read about strategic walkers. With the way it’s set up, seems like a neverending problem.[/quote]
It’s only a problem for future taxpayers. They haven’t gotten the bill yet, so they haven’t said much.
But the system of non-recourse loans with little money down does achieve one goal: it puts paid to any concerns about unstoppable deflation. It also enables existing homeowners to get out at a higher price than they would otherwise. Homeowner A sells a home to Buyer B, receiving $500,000 that A gets to keep. Buyer B gets to default/mod, ultimately paying $300,000 for the home. How can Homeowner A walk away with $500,000 when Borrower B only pays $300,000? Because Future Taxpayer C is made to pay the extra $200,000. Great system, for A! Not so good for C.
September 21, 2009 at 7:42 PM #460400Participant[quote=jpinpb]But with nothing to lose, they can walk. I just read about strategic walkers. With the way it’s set up, seems like a neverending problem.[/quote]
It’s only a problem for future taxpayers. They haven’t gotten the bill yet, so they haven’t said much.
But the system of non-recourse loans with little money down does achieve one goal: it puts paid to any concerns about unstoppable deflation. It also enables existing homeowners to get out at a higher price than they would otherwise. Homeowner A sells a home to Buyer B, receiving $500,000 that A gets to keep. Buyer B gets to default/mod, ultimately paying $300,000 for the home. How can Homeowner A walk away with $500,000 when Borrower B only pays $300,000? Because Future Taxpayer C is made to pay the extra $200,000. Great system, for A! Not so good for C.
September 21, 2009 at 7:42 PM #460474Participant[quote=jpinpb]But with nothing to lose, they can walk. I just read about strategic walkers. With the way it’s set up, seems like a neverending problem.[/quote]
It’s only a problem for future taxpayers. They haven’t gotten the bill yet, so they haven’t said much.
But the system of non-recourse loans with little money down does achieve one goal: it puts paid to any concerns about unstoppable deflation. It also enables existing homeowners to get out at a higher price than they would otherwise. Homeowner A sells a home to Buyer B, receiving $500,000 that A gets to keep. Buyer B gets to default/mod, ultimately paying $300,000 for the home. How can Homeowner A walk away with $500,000 when Borrower B only pays $300,000? Because Future Taxpayer C is made to pay the extra $200,000. Great system, for A! Not so good for C.
September 21, 2009 at 7:42 PM #460674Participant[quote=jpinpb]But with nothing to lose, they can walk. I just read about strategic walkers. With the way it’s set up, seems like a neverending problem.[/quote]
It’s only a problem for future taxpayers. They haven’t gotten the bill yet, so they haven’t said much.
But the system of non-recourse loans with little money down does achieve one goal: it puts paid to any concerns about unstoppable deflation. It also enables existing homeowners to get out at a higher price than they would otherwise. Homeowner A sells a home to Buyer B, receiving $500,000 that A gets to keep. Buyer B gets to default/mod, ultimately paying $300,000 for the home. How can Homeowner A walk away with $500,000 when Borrower B only pays $300,000? Because Future Taxpayer C is made to pay the extra $200,000. Great system, for A! Not so good for C.
September 22, 2009 at 12:05 AM #459979Arraya
ParticipantWe are deflating and they have not stopped it. The Fed anti-deflation policy has failed. Now, I suppose they can start giving high school kids government CCs and commercial loans. That might do the trick.
However, they may succeed at hyper-inflation if the world pulls away from the dollar as it has made steps to do.
September 22, 2009 at 12:05 AM #460168ParticipantWe are deflating and they have not stopped it. The Fed anti-deflation policy has failed. Now, I suppose they can start giving high school kids government CCs and commercial loans. That might do the trick.
However, they may succeed at hyper-inflation if the world pulls away from the dollar as it has made steps to do.
September 22, 2009 at 12:05 AM #460508ParticipantWe are deflating and they have not stopped it. The Fed anti-deflation policy has failed. Now, I suppose they can start giving high school kids government CCs and commercial loans. That might do the trick.
However, they may succeed at hyper-inflation if the world pulls away from the dollar as it has made steps to do.
September 22, 2009 at 12:05 AM #460581ParticipantWe are deflating and they have not stopped it. The Fed anti-deflation policy has failed. Now, I suppose they can start giving high school kids government CCs and commercial loans. That might do the trick.
However, they may succeed at hyper-inflation if the world pulls away from the dollar as it has made steps to do.
September 22, 2009 at 12:05 AM #460781ParticipantWe are deflating and they have not stopped it. The Fed anti-deflation policy has failed. Now, I suppose they can start giving high school kids government CCs and commercial loans. That might do the trick.
However, they may succeed at hyper-inflation if the world pulls away from the dollar as it has made steps to do.
September 24, 2009 at 7:48 AM #460958sdduuuude
ParticipantSeptember 24, 2009 at 7:48 AM #461153ParticipantSeptember 24, 2009 at 7:48 AM #461493ParticipantSeptember 24, 2009 at 7:48 AM #461566Participant -
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