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bubba99
ParticipantFirst, the number is B.S.
In the breakdown of consumer purchases, spending on non-durable goods which include food and gasoline was up 2.0 pct, while spending on durables rose just 0.3 pct.
The same pattern appears in the inflation statistics. The PCE index for non-durables rose 1.4 pct, while the price indexes for durables actually fell 0.2 pct, and the index for services was up 0.3 pct.
That suggests the 1.1 pct spending jump was inflated by the price effects of more expensive energy and food. Real, inflation-adjusted spending was up just over half as much, 0.5 pct.
Worse still for consumers, their disposable personal incomes — after inflation and taxes — fell 0.3 pct, the worst reading since a minus 0.6 pct in April of this year.
above from:
http://www.forbes.com/afxnewslimited/feeds/afx/2007/12/21/afx4467450.htmlSo yes, maybe more credit card debt, and maybe way more cc interest because of rate increases on borrowers, but all in all, just another chapter in confuse and confound the american public.
ParticipantFirst, the number is B.S.
In the breakdown of consumer purchases, spending on non-durable goods which include food and gasoline was up 2.0 pct, while spending on durables rose just 0.3 pct.
The same pattern appears in the inflation statistics. The PCE index for non-durables rose 1.4 pct, while the price indexes for durables actually fell 0.2 pct, and the index for services was up 0.3 pct.
That suggests the 1.1 pct spending jump was inflated by the price effects of more expensive energy and food. Real, inflation-adjusted spending was up just over half as much, 0.5 pct.
Worse still for consumers, their disposable personal incomes — after inflation and taxes — fell 0.3 pct, the worst reading since a minus 0.6 pct in April of this year.
above from:
http://www.forbes.com/afxnewslimited/feeds/afx/2007/12/21/afx4467450.htmlSo yes, maybe more credit card debt, and maybe way more cc interest because of rate increases on borrowers, but all in all, just another chapter in confuse and confound the american public.
Participant“If it is that simple after the law change…I thought you can no longer declear chapter 7 and have your credit cards charges just disappear like that.”
Correct, Chapter 7 bankruptcy is only available to a few – no income people, and then only after month of “credit counseling”. And even then the judge can force them to chapter 13 if it is mostly consumer debt.
The rest will need to develop a payment plan under Chapter 13, and pay for the rest of their lives.
Unless Paulsen et al create a new bailout for credit card debtors.
Participant“If it is that simple after the law change…I thought you can no longer declear chapter 7 and have your credit cards charges just disappear like that.”
Correct, Chapter 7 bankruptcy is only available to a few – no income people, and then only after month of “credit counseling”. And even then the judge can force them to chapter 13 if it is mostly consumer debt.
The rest will need to develop a payment plan under Chapter 13, and pay for the rest of their lives.
Unless Paulsen et al create a new bailout for credit card debtors.
Participant“If it is that simple after the law change…I thought you can no longer declear chapter 7 and have your credit cards charges just disappear like that.”
Correct, Chapter 7 bankruptcy is only available to a few – no income people, and then only after month of “credit counseling”. And even then the judge can force them to chapter 13 if it is mostly consumer debt.
The rest will need to develop a payment plan under Chapter 13, and pay for the rest of their lives.
Unless Paulsen et al create a new bailout for credit card debtors.
Participant“If it is that simple after the law change…I thought you can no longer declear chapter 7 and have your credit cards charges just disappear like that.”
Correct, Chapter 7 bankruptcy is only available to a few – no income people, and then only after month of “credit counseling”. And even then the judge can force them to chapter 13 if it is mostly consumer debt.
The rest will need to develop a payment plan under Chapter 13, and pay for the rest of their lives.
Unless Paulsen et al create a new bailout for credit card debtors.
Participant“If it is that simple after the law change…I thought you can no longer declear chapter 7 and have your credit cards charges just disappear like that.”
Correct, Chapter 7 bankruptcy is only available to a few – no income people, and then only after month of “credit counseling”. And even then the judge can force them to chapter 13 if it is mostly consumer debt.
The rest will need to develop a payment plan under Chapter 13, and pay for the rest of their lives.
Unless Paulsen et al create a new bailout for credit card debtors.
ParticipantThe liquidity issue is caused by the declining value of the mortgages underlying the CDO, not the numnber of foreclosures. The value is lowered by Moodys downgrades, FAS 157, and revenue below projections. This plan further reduces revenue, and hence should create a whole new round of losses for the big Wall Street firms.
If the plan has any real impact on the real estate market, it will bankrupt CITI, Morgan Stanley et. al. The plan only deals with the revenue side and completely misses the asset losses – unless Ben is going to allow the CDOs to remain at par, or pay the difference.
ParticipantThe liquidity issue is caused by the declining value of the mortgages underlying the CDO, not the numnber of foreclosures. The value is lowered by Moodys downgrades, FAS 157, and revenue below projections. This plan further reduces revenue, and hence should create a whole new round of losses for the big Wall Street firms.
If the plan has any real impact on the real estate market, it will bankrupt CITI, Morgan Stanley et. al. The plan only deals with the revenue side and completely misses the asset losses – unless Ben is going to allow the CDOs to remain at par, or pay the difference.
ParticipantThe liquidity issue is caused by the declining value of the mortgages underlying the CDO, not the numnber of foreclosures. The value is lowered by Moodys downgrades, FAS 157, and revenue below projections. This plan further reduces revenue, and hence should create a whole new round of losses for the big Wall Street firms.
If the plan has any real impact on the real estate market, it will bankrupt CITI, Morgan Stanley et. al. The plan only deals with the revenue side and completely misses the asset losses – unless Ben is going to allow the CDOs to remain at par, or pay the difference.
ParticipantThe liquidity issue is caused by the declining value of the mortgages underlying the CDO, not the numnber of foreclosures. The value is lowered by Moodys downgrades, FAS 157, and revenue below projections. This plan further reduces revenue, and hence should create a whole new round of losses for the big Wall Street firms.
If the plan has any real impact on the real estate market, it will bankrupt CITI, Morgan Stanley et. al. The plan only deals with the revenue side and completely misses the asset losses – unless Ben is going to allow the CDOs to remain at par, or pay the difference.
ParticipantThe liquidity issue is caused by the declining value of the mortgages underlying the CDO, not the numnber of foreclosures. The value is lowered by Moodys downgrades, FAS 157, and revenue below projections. This plan further reduces revenue, and hence should create a whole new round of losses for the big Wall Street firms.
If the plan has any real impact on the real estate market, it will bankrupt CITI, Morgan Stanley et. al. The plan only deals with the revenue side and completely misses the asset losses – unless Ben is going to allow the CDOs to remain at par, or pay the difference.
ParticipantYour question involves a couple of twists and turns.
The first part is the purchase was done with “80/20 from Wells Fargo with both loans starting as HELOC’s”. Both were purchase money and in California are non-recourse if never expanded by adding charges to the LOC or refinanced.
The 80% may be (probably is still) non recourse and is not taxable. The foreclosure is the remedy. In California, a company cannot take two bites of the apple. If they foreclose on a loan, that is their only remedy. Some people might say that because the first was a HELOC, it is always recourse, but that is not the case in California. There is no debt forgiveness on the first, because it is a contractual/legal remedy, not loan forgiveness.
The second (20%) because it was refinanced is no longer purchase money loan and is recourse. The collections part is because the bank can come after you for all or part of the second. Any part of the second they “forgive” is taxable as “loan forgiveness”.
The real question you should be asking is “What will I do if Wells Fargo goes all the way after the total second mortgage?” There your options are pay it, negotiate it, or file for bankruptcy. The tax on debt forgiveness is only an issue if Wells is in a good mood.
ParticipantYour question involves a couple of twists and turns.
The first part is the purchase was done with “80/20 from Wells Fargo with both loans starting as HELOC’s”. Both were purchase money and in California are non-recourse if never expanded by adding charges to the LOC or refinanced.
The 80% may be (probably is still) non recourse and is not taxable. The foreclosure is the remedy. In California, a company cannot take two bites of the apple. If they foreclose on a loan, that is their only remedy. Some people might say that because the first was a HELOC, it is always recourse, but that is not the case in California. There is no debt forgiveness on the first, because it is a contractual/legal remedy, not loan forgiveness.
The second (20%) because it was refinanced is no longer purchase money loan and is recourse. The collections part is because the bank can come after you for all or part of the second. Any part of the second they “forgive” is taxable as “loan forgiveness”.
The real question you should be asking is “What will I do if Wells Fargo goes all the way after the total second mortgage?” There your options are pay it, negotiate it, or file for bankruptcy. The tax on debt forgiveness is only an issue if Wells is in a good mood.
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