What is the best scenario?

[ironman]

To stay on course:

Joe Six-pack borrowed money against his house value and spent it on a nice vacation
His bank sold the loan to Fannie with guarantee
Fannie sold it to the Chinese GOV with guarantee
Joe Six-pack’s house dropped in value and he stops servicing the loan and dumped the house
The Chinese Gov now has a loan that is not performing and sends it back to Fannie
Fannie sends it to the bank
The bank works with other people money and has it own reserve, what does it do?
a) Use its reserve – very unlikely
b) Use people’s deposits – more likely
The latter is guaranteed by the US Gov so it backs the bank liability as promised
Everybody pays Joe Six-pack load

To HarryBosch:
If you multiply the above situation by a million and US Gov goes broke (bankrupt) who so going to guarantee your relative pension or money in the bank?
If there is a depression everybody suffers. If there is super-inflation everybody savings are reduce to 0.
And I totally see myself in the same situation, live bellow my means for a couple of years just to see my savings cut by inflation/falling dollar.

I am saying that in any situation the money wasted by the speculators will have to be paid by the people who were diligent and financially smart.

Ironman

[cowboy]

There was a report done using todays inflation data with the Reagan Era inflation calculations. The number came to 11% inflation. And even back then they had some fudging of the calculation.

[cowboy]

There was a report done using todays inflation data with the Reagan Era inflation calculations. The number came to 11% inflation. And even back then they had some fudging of the calculation.

[cowboy]

There was a report done using todays inflation data with the Reagan Era inflation calculations. The number came to 11% inflation. And even back then they had some fudging of the calculation.

[cowboy]

There was a report done using todays inflation data with the Reagan Era inflation calculations. The number came to 11% inflation. And even back then they had some fudging of the calculation.

[cowboy]

There was a report done using todays inflation data with the Reagan Era inflation calculations. The number came to 11% inflation. And even back then they had some fudging of the calculation.

[Patience_is_a_virtue]

It would be unfair – outrageous – to ask him and others to pay for other people’s losses.

Our country is unfair in many respects. We pay for people who drive without insurance, we pay for people who goto the hospital without insurance, we pay welfare, etc etc.

That it is unfair almost doesn’t matter in this country.

[Patience_is_a_virtue]

It would be unfair – outrageous – to ask him and others to pay for other people’s losses.

Our country is unfair in many respects. We pay for people who drive without insurance, we pay for people who goto the hospital without insurance, we pay welfare, etc etc.

That it is unfair almost doesn’t matter in this country.

[Patience_is_a_virtue]

It would be unfair – outrageous – to ask him and others to pay for other people’s losses.

Our country is unfair in many respects. We pay for people who drive without insurance, we pay for people who goto the hospital without insurance, we pay welfare, etc etc.

That it is unfair almost doesn’t matter in this country.

[Patience_is_a_virtue]

It would be unfair – outrageous – to ask him and others to pay for other people’s losses.

Our country is unfair in many respects. We pay for people who drive without insurance, we pay for people who goto the hospital without insurance, we pay welfare, etc etc.

That it is unfair almost doesn’t matter in this country.

[Patience_is_a_virtue]

It would be unfair – outrageous – to ask him and others to pay for other people’s losses.

Our country is unfair in many respects. We pay for people who drive without insurance, we pay for people who goto the hospital without insurance, we pay welfare, etc etc.

That it is unfair almost doesn’t matter in this country.

[Anonymous]

The housing is just part of the over stretched credit problem. On the face, the home price goes down, the home owner loses equity. There maybe load adjustment, short sale, bank repossession etc. There may be some government assistance or bail out. But the big picture is really inflation, i.e. spread the pain to everybody. As this IS the BEST scenario. The US is spending at an unsustainable level both on individual level and government level. That is why we see the government running of deficit and many jobs moving overseas. We have seen signification loss of value in US dollar compared to Euro and Canadian dollar. Such inflation brings these benefits:
– The value of the debt denominated in US dollar goes down, making it easier to the government to repay the debts.
– The effective labor cost goes down. That will help export and slow down outsourcing.

The downside is:
– People with savings lose.
– Standard of living goes down.
– Interest rate goes up. It will be harder to live on debt in the future.

Back to the housing situation in San Diego, the cost will not return to really affordable level simply because there is no oversupply rather overpriced. It is just getting less over priced.

[Anonymous]

The housing is just part of the over stretched credit problem. On the face, the home price goes down, the home owner loses equity. There maybe load adjustment, short sale, bank repossession etc. There may be some government assistance or bail out. But the big picture is really inflation, i.e. spread the pain to everybody. As this IS the BEST scenario. The US is spending at an unsustainable level both on individual level and government level. That is why we see the government running of deficit and many jobs moving overseas. We have seen signification loss of value in US dollar compared to Euro and Canadian dollar. Such inflation brings these benefits:
– The value of the debt denominated in US dollar goes down, making it easier to the government to repay the debts.
– The effective labor cost goes down. That will help export and slow down outsourcing.

The downside is:
– People with savings lose.
– Standard of living goes down.
– Interest rate goes up. It will be harder to live on debt in the future.

Back to the housing situation in San Diego, the cost will not return to really affordable level simply because there is no oversupply rather overpriced. It is just getting less over priced.

[Anonymous]

The housing is just part of the over stretched credit problem. On the face, the home price goes down, the home owner loses equity. There maybe load adjustment, short sale, bank repossession etc. There may be some government assistance or bail out. But the big picture is really inflation, i.e. spread the pain to everybody. As this IS the BEST scenario. The US is spending at an unsustainable level both on individual level and government level. That is why we see the government running of deficit and many jobs moving overseas. We have seen signification loss of value in US dollar compared to Euro and Canadian dollar. Such inflation brings these benefits:
– The value of the debt denominated in US dollar goes down, making it easier to the government to repay the debts.
– The effective labor cost goes down. That will help export and slow down outsourcing.

The downside is:
– People with savings lose.
– Standard of living goes down.
– Interest rate goes up. It will be harder to live on debt in the future.

Back to the housing situation in San Diego, the cost will not return to really affordable level simply because there is no oversupply rather overpriced. It is just getting less over priced.

[Anonymous]

The housing is just part of the over stretched credit problem. On the face, the home price goes down, the home owner loses equity. There maybe load adjustment, short sale, bank repossession etc. There may be some government assistance or bail out. But the big picture is really inflation, i.e. spread the pain to everybody. As this IS the BEST scenario. The US is spending at an unsustainable level both on individual level and government level. That is why we see the government running of deficit and many jobs moving overseas. We have seen signification loss of value in US dollar compared to Euro and Canadian dollar. Such inflation brings these benefits:
– The value of the debt denominated in US dollar goes down, making it easier to the government to repay the debts.
– The effective labor cost goes down. That will help export and slow down outsourcing.

The downside is:
– People with savings lose.
– Standard of living goes down.
– Interest rate goes up. It will be harder to live on debt in the future.

Back to the housing situation in San Diego, the cost will not return to really affordable level simply because there is no oversupply rather overpriced. It is just getting less over priced.

[Author]

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