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patientrenter
Participant[quote=threadkiller]….As soon as I can rustle up 1.6 Million I’ll buy it….[/quote]
I can’t tell if the snark was on, but I imagine it would take a while for most people, maybe even you, to find 1.6 million of their own spare dollars.
Now, if you’re happy to spend OPM, then just call it a multi-unit dwelling and get the next generation of taxpayers to pay for it, using the FHA.
Participant[quote=threadkiller]….As soon as I can rustle up 1.6 Million I’ll buy it….[/quote]
I can’t tell if the snark was on, but I imagine it would take a while for most people, maybe even you, to find 1.6 million of their own spare dollars.
Now, if you’re happy to spend OPM, then just call it a multi-unit dwelling and get the next generation of taxpayers to pay for it, using the FHA.
Participant[quote=threadkiller]….As soon as I can rustle up 1.6 Million I’ll buy it….[/quote]
I can’t tell if the snark was on, but I imagine it would take a while for most people, maybe even you, to find 1.6 million of their own spare dollars.
Now, if you’re happy to spend OPM, then just call it a multi-unit dwelling and get the next generation of taxpayers to pay for it, using the FHA.
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.
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.
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.
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.
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.
Participant[quote=jpinpb]…No matter how many pints of whiskey Bernanke sets in front of someone passed out on the floor, liquor sales will not rise.[/quote]
Well, that would be a good analogy for true debt (the type you have to pay back). But the govt has learned to use more and more debt that doesn’t have to be paid back. Non-recourse loans with little or no money down allow a borrower to capture the upside, while walking away from the downside. This kind of loan is the FHA’s specialty. With this kind of loan, the borrower is best off buying the biggest home they will qualify for. Using lots of loans like this, it is possible to reflate, and eventually inflate.
Participant[quote=jpinpb]…No matter how many pints of whiskey Bernanke sets in front of someone passed out on the floor, liquor sales will not rise.[/quote]
Well, that would be a good analogy for true debt (the type you have to pay back). But the govt has learned to use more and more debt that doesn’t have to be paid back. Non-recourse loans with little or no money down allow a borrower to capture the upside, while walking away from the downside. This kind of loan is the FHA’s specialty. With this kind of loan, the borrower is best off buying the biggest home they will qualify for. Using lots of loans like this, it is possible to reflate, and eventually inflate.
Participant[quote=jpinpb]…No matter how many pints of whiskey Bernanke sets in front of someone passed out on the floor, liquor sales will not rise.[/quote]
Well, that would be a good analogy for true debt (the type you have to pay back). But the govt has learned to use more and more debt that doesn’t have to be paid back. Non-recourse loans with little or no money down allow a borrower to capture the upside, while walking away from the downside. This kind of loan is the FHA’s specialty. With this kind of loan, the borrower is best off buying the biggest home they will qualify for. Using lots of loans like this, it is possible to reflate, and eventually inflate.
Participant[quote=jpinpb]…No matter how many pints of whiskey Bernanke sets in front of someone passed out on the floor, liquor sales will not rise.[/quote]
Well, that would be a good analogy for true debt (the type you have to pay back). But the govt has learned to use more and more debt that doesn’t have to be paid back. Non-recourse loans with little or no money down allow a borrower to capture the upside, while walking away from the downside. This kind of loan is the FHA’s specialty. With this kind of loan, the borrower is best off buying the biggest home they will qualify for. Using lots of loans like this, it is possible to reflate, and eventually inflate.
Participant[quote=jpinpb]…No matter how many pints of whiskey Bernanke sets in front of someone passed out on the floor, liquor sales will not rise.[/quote]
Well, that would be a good analogy for true debt (the type you have to pay back). But the govt has learned to use more and more debt that doesn’t have to be paid back. Non-recourse loans with little or no money down allow a borrower to capture the upside, while walking away from the downside. This kind of loan is the FHA’s specialty. With this kind of loan, the borrower is best off buying the biggest home they will qualify for. Using lots of loans like this, it is possible to reflate, and eventually inflate.
ParticipantFrom that article by Jim Grant:
“The Fed may be worried about something else. By sitting on interest rates, it is distorting every business and investment decision. If mispriced debt was the root cause of the narrowly-averted destruction of global finance, the Fed is well on its way to setting the stage for some distant (let us hope) Act II. In the meantime, ultra-low interest rates have lit a fire under the stock and debt markets.”
So he is saying that the Fed is goosing the markets in the short term, and building up more problems for the long term. Since the WSJ wouldn’t have published a negative article from him, he focused on the short term part of the story. But pay attention to the whole story Jim Grant tells.
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