Article

2010-03-20 Economy

Archived material is restricted to Rantburg regulars and members. If you need access email fred.pruitt=at=gmail.com with your nick to be added to the members list. There is no charge to join Rantburg as a member.

Posted by Anguper Hupomosing9418 2010-03-20 13:13|| || Front Page|| [11 views ] Top

#1 I used to work developing software for bank lending.

It was obvious to me that any significant fall in real estate prices (around 15% to 25%) would bankrupt basically every bank in the world.

The bankers of course treated me as some kind of leper for even raising the possibility.

Posted by phil_b 2010-03-20 14:42|| 2010-03-20 14:42|| Front Page Top

#2 If the banks were actually accounting honestly they would virtually all be bankrupt. The government regulatory bodies are fully aware of this, and have been for two years or more, but are actively abetting the deception, hoping for a long, soft decline (like Japan's for the last two decades) rather than a catastrophic crash.
All that has been addressed so far (and incompletely, at that) is the sub-prime home loans. The various second mortgages are mostly valueless (to the banks.) A lot of balloons and 'investment' home mortgages are seriously underwater. Judging by the number of vacant storefronts and office buildings I have to believe the commercial mortgage market is in serious trouble. Two more homes went up for sale on my little two-block street this week - and I am in one of the better real estate markets. Only one property has sold, and several have been pulled back after not finding buyers.
Somebody is going to end up holding the bag on this mess - and it can only be the people who have behaved responsibly and lived within their means. Whether they pay via inflation or deflation or taxes, THEY will pay, and THAT will crush honest development and investment for a generation.

Posted by Glenmore 2010-03-20 17:45|| 2010-03-20 17:45|| Front Page Top

#3 I'd be delighted if someone could convince me I am wrong and shake me out of my blue funk.

Posted by Glenmore 2010-03-20 17:48|| 2010-03-20 17:48|| Front Page Top

#4 Blue funk? You as well? Mine came on just prior to midnight, 4 Nov 2008.

Posted by Besoeker 2010-03-20 18:46|| 2010-03-20 18:46|| Front Page Top

#5 Buy farmland. When hyperinflation hits, essential commodities will do very well.

Posted by lex 2010-03-20 19:10|| 2010-03-20 19:10|| Front Page Top

#6 Buy farmland you say? How will you pay the state's tax levy on it? What if you are old or disabled and can't plow a row. How will you keep the roving gangs of armed predators from stealing your crops? Hobby farming or subsistance living may work in some remote areas, but unfortunately everyone can't move to Remoteville.

Posted by Besoeker 2010-03-20 19:21|| 2010-03-20 19:21|| Front Page Top

#7 Already had several famiuly & friends who lost their farms to the tax man (not the bank!) so I know how that goes. Ask the farmers in Zimbobland.

Posted by Glenmore 2010-03-20 19:24|| 2010-03-20 19:24|| Front Page Top

#8 Actually I was thinking of doing a reverse of my great-grandfather's situation and being an absentee landlord in County Mayo-god-help-us. With a 21st c. spin-- you know, arugula, free-range radicchio, dairy farming for devonshire cream, etc

Posted by lex 2010-03-20 19:27|| 2010-03-20 19:27|| Front Page Top

#9 Diaspora it may well be, and not the first.

Posted by Besoeker 2010-03-20 19:41|| 2010-03-20 19:41|| Front Page Top

#10 Beso, mine came 9-11-2001, and most things since have just made it worse.

Posted by Glenmore 2010-03-20 19:58|| 2010-03-20 19:58|| Front Page Top

#11 How will you keep the roving gangs of armed predators from stealing your crops?

With cyborg beetles.

Posted by lex 2010-03-20 20:03|| 2010-03-20 20:03|| Front Page Top

#12 I was on leave that day and the wife yelled at me to come look at the teevee. I no sooner sat down that the second plane hit. I jumped up, pulled on my BDU's and headed for post. I will never forget that day and seeing those people leap to their deaths from the top floors. Afghan Hearts and minds strategy my aching arse.

Posted by Besoeker 2010-03-20 20:04|| 2010-03-20 20:04|| Front Page Top

#13 Lex old mate, something tells me you'll be among the survivors who brew your own Guinness, gain weight and thrive.

Posted by Besoeker 2010-03-20 20:08|| 2010-03-20 20:08|| Front Page Top

#14 OK, I see remote controlled insect brains in Berkeley. Show me something new.

Posted by Grunter 2010-03-20 20:52|| 2010-03-20 20:52|| Front Page Top

#15 Yeah. When I bought maps of most of the habitable caves east of the Mississippi River back in 94, from the USGS Map Store in Reston, I knew this was bound to happenI now need to buy the latest revisions to them all.
Also, as a resident of S. Maryland these days, Ill also need to warn my Amish neighbors that theyll soon be forced into a 24/7 food production & supply-chain logistics nightmare. Dont look now gentle, self-sufficient folks, but youre on the hook to feed the whole damn Nation (think small N).
So, Snap those suspenders and look livelycuz nobody else can do it like you little guys.

Posted by Asymmetrical Triangulation 2010-03-20 21:56|| 2010-03-20 21:56|| Front Page Top

23:31 BigEd
23:19 Barbara Skolaut
23:18 Barbara Skolaut
23:13 Hellfish
23:05 Barbara Skolaut
22:35 newc
22:28 newc
22:28 newc
22:22 newc
22:08 Hotspur666
22:01 newc
21:56 Asymmetrical Triangulation
21:40 lotp
21:39 Hotspur666
21:37 Rambler in Virginia
21:28 ryuge
20:52 Grunter
20:24 abu do you love
20:17 Snash Sforza6070
20:17 phil_b
20:08 Besoeker
20:04 Besoeker
20:03 lex
19:58 Glenmore