Forum Replies Created
-
AuthorPosts
-
ucodegen
Participant[quote carlsbadworker]
I have a different theory. When I look at China’s economy, the biggest issue that I have with it is its low capital efficiency:
[/quote]
Thanks for the link. Interesting paper. I did notice that they don’t seem to account for the time lag of Capital Expenditure to revenue generation from Capital Expenditure. Under growth conditions greater than about 10%/yr, this can make it look like you are not making efficient use of capital. It take time for plant and equipment purchases to start making a return on investment.I was hoping that they were going to cover more on “revenue productivity of labor”, but they were unable to segregate high tech from manual. I think this is where some divergence will be seen.
Participant[quote carlsbadworker]
I have a different theory. When I look at China’s economy, the biggest issue that I have with it is its low capital efficiency:
[/quote]
Thanks for the link. Interesting paper. I did notice that they don’t seem to account for the time lag of Capital Expenditure to revenue generation from Capital Expenditure. Under growth conditions greater than about 10%/yr, this can make it look like you are not making efficient use of capital. It take time for plant and equipment purchases to start making a return on investment.I was hoping that they were going to cover more on “revenue productivity of labor”, but they were unable to segregate high tech from manual. I think this is where some divergence will be seen.
Participant[quote patb]
Cramdown was an option under chapter 11 to allow
individuals to force a rewrite of their mortgage.
[/quote]
You said it ‘was’ an option, I was asking when? What changed it..Participant[quote patb]
Cramdown was an option under chapter 11 to allow
individuals to force a rewrite of their mortgage.
[/quote]
You said it ‘was’ an option, I was asking when? What changed it..Participant[quote patb]
Cramdown was an option under chapter 11 to allow
individuals to force a rewrite of their mortgage.
[/quote]
You said it ‘was’ an option, I was asking when? What changed it..Participant[quote patb]
Cramdown was an option under chapter 11 to allow
individuals to force a rewrite of their mortgage.
[/quote]
You said it ‘was’ an option, I was asking when? What changed it..Participant[quote patb]
Cramdown was an option under chapter 11 to allow
individuals to force a rewrite of their mortgage.
[/quote]
You said it ‘was’ an option, I was asking when? What changed it..Participant[quote patb]
i hate to tell you this but for almost a 100 years Cramdown was part of law.
[/quote]
I’d be curious as to where you get that ‘fact’. Part of the differentiation between secured and unsecured loans is that with secured loans, unless their is fraud.. the lender walks away from bk with the property and the borrower is free and clear of the loan.. whether or not the lender is ‘made whole'(only exemption that I know of on this is under homestead act). If it is unsecured, the lender can go after other assets, including garnishing bank accounts, tax returns and wages.There are some variants in some states, like New Mexico, where if the lender is not made whole, they can go after other assets (recourse vs nonrecourse). Of course, this may be ‘stayed’ under bk.. where the lender on the secured loan only gets the property and no more, even though they were not made whole.
Participant[quote patb]
i hate to tell you this but for almost a 100 years Cramdown was part of law.
[/quote]
I’d be curious as to where you get that ‘fact’. Part of the differentiation between secured and unsecured loans is that with secured loans, unless their is fraud.. the lender walks away from bk with the property and the borrower is free and clear of the loan.. whether or not the lender is ‘made whole'(only exemption that I know of on this is under homestead act). If it is unsecured, the lender can go after other assets, including garnishing bank accounts, tax returns and wages.There are some variants in some states, like New Mexico, where if the lender is not made whole, they can go after other assets (recourse vs nonrecourse). Of course, this may be ‘stayed’ under bk.. where the lender on the secured loan only gets the property and no more, even though they were not made whole.
Participant[quote patb]
i hate to tell you this but for almost a 100 years Cramdown was part of law.
[/quote]
I’d be curious as to where you get that ‘fact’. Part of the differentiation between secured and unsecured loans is that with secured loans, unless their is fraud.. the lender walks away from bk with the property and the borrower is free and clear of the loan.. whether or not the lender is ‘made whole'(only exemption that I know of on this is under homestead act). If it is unsecured, the lender can go after other assets, including garnishing bank accounts, tax returns and wages.There are some variants in some states, like New Mexico, where if the lender is not made whole, they can go after other assets (recourse vs nonrecourse). Of course, this may be ‘stayed’ under bk.. where the lender on the secured loan only gets the property and no more, even though they were not made whole.
Participant[quote patb]
i hate to tell you this but for almost a 100 years Cramdown was part of law.
[/quote]
I’d be curious as to where you get that ‘fact’. Part of the differentiation between secured and unsecured loans is that with secured loans, unless their is fraud.. the lender walks away from bk with the property and the borrower is free and clear of the loan.. whether or not the lender is ‘made whole'(only exemption that I know of on this is under homestead act). If it is unsecured, the lender can go after other assets, including garnishing bank accounts, tax returns and wages.There are some variants in some states, like New Mexico, where if the lender is not made whole, they can go after other assets (recourse vs nonrecourse). Of course, this may be ‘stayed’ under bk.. where the lender on the secured loan only gets the property and no more, even though they were not made whole.
Participant[quote patb]
i hate to tell you this but for almost a 100 years Cramdown was part of law.
[/quote]
I’d be curious as to where you get that ‘fact’. Part of the differentiation between secured and unsecured loans is that with secured loans, unless their is fraud.. the lender walks away from bk with the property and the borrower is free and clear of the loan.. whether or not the lender is ‘made whole'(only exemption that I know of on this is under homestead act). If it is unsecured, the lender can go after other assets, including garnishing bank accounts, tax returns and wages.There are some variants in some states, like New Mexico, where if the lender is not made whole, they can go after other assets (recourse vs nonrecourse). Of course, this may be ‘stayed’ under bk.. where the lender on the secured loan only gets the property and no more, even though they were not made whole.
Participant[quote patb]
In a decent society, a bankruptcy judge would write the note down to the new value of 200K.
[/quote]
Why? It is a secured note. Someone fronted the 400K. If you want mortgage rates to go sky high, go ahead and do this. The people lending money will start demanding a higher interest rate to offset the risk of loss of capital. They will refuse to lend until they get this. Remember that the lenders only make about 72% over the life of the loan (not adjusting for inflation and assuming that they are the primary source of capital). If you are going to demand a 50% haircut from the lenders with the possibility of then getting 36% back for a total return of -14% over a 30 year period(about -0.5%/yr) vs their 72% for a 30 year (about 4%/yr). The result will be mortgage interest rates close to 8 or 9% because you are effectively taking a secured loan and making it unsecured… just like credit cards – whose balances can be written down.I would LOVE to have all my ‘costs’ readjusted if the real price changes. Imagine that if a stock price goes down, I get some of my cash back because its real value is less!! NICE!!!
[quote patb]
yes it may not appeal to people but the
cramdown is the best outcome.
[/quote]
And what of moral hazard?Participant[quote patb]
In a decent society, a bankruptcy judge would write the note down to the new value of 200K.
[/quote]
Why? It is a secured note. Someone fronted the 400K. If you want mortgage rates to go sky high, go ahead and do this. The people lending money will start demanding a higher interest rate to offset the risk of loss of capital. They will refuse to lend until they get this. Remember that the lenders only make about 72% over the life of the loan (not adjusting for inflation and assuming that they are the primary source of capital). If you are going to demand a 50% haircut from the lenders with the possibility of then getting 36% back for a total return of -14% over a 30 year period(about -0.5%/yr) vs their 72% for a 30 year (about 4%/yr). The result will be mortgage interest rates close to 8 or 9% because you are effectively taking a secured loan and making it unsecured… just like credit cards – whose balances can be written down.I would LOVE to have all my ‘costs’ readjusted if the real price changes. Imagine that if a stock price goes down, I get some of my cash back because its real value is less!! NICE!!!
[quote patb]
yes it may not appeal to people but the
cramdown is the best outcome.
[/quote]
And what of moral hazard? -
AuthorPosts
