It looks as if houses are being foreclosed to the benefit of those who merely hold the junior tranches and thus have no right to benefit by the foreclosure, or perhaps do not hold anything at all – it is difficult to tell, perhaps impossible to tell. It is also unclear how much money the people being foreclosed upon actually owe – again, it is difficult to tell, perhaps impossible to tell. When the scammers sold mortgages on to the next guy in line, they tended to pad up the mortgage, tended to exaggerate the amount of debt the borrower had promised to pay.
Category: economics
Falkenblog locates the guilty
Falkenblog has an interesting quote from Harvard, wherein in 2003, back before the financial crisis, Angello Mozilla gives politically correct bullshit justifying every bad thing the banks did to cause the financial crisis on the basis of race and affirmative action. That means there is currently a homeownership gap of over 25 points when comparing white households with African Americans and Hispanics. My friends, that gap is obviously far too wide. … One of the more obvious resolutions to the …
Financial collapse still under way
The Market Ticker ® complains that the banks and the regulators are flagrantly and massively violating laws that are necessary for borrowing and lending to work – violating every step that is necessary for the trust to work along the chain, with the result that our entire financial system is massively disfunctional, and continues to leak huge amounts of money. He gives lots of interesting details of a multitude of flagrantly criminal acts. But he fails to ask how the …
The explosive expansion of the state
Government regulatory intervention in the economy is exploding, creating a multitude of invisible taxes, off budget expenditures, and opportunities for corrupt profits by semi private businesses, such Al Gore becoming a billionaire from carbon credits.
The number of the beast
And he causeth all, both small and great, rich and poor, free and bond, to receive a mark in their right hand, or in their foreheads: And that no man might buy or sell, save he that had the mark, or the name of the beast, or the number of his name. Greece Bans Cash Transactions Over 1,500 Euros The Italian government will ban the use of cash in transactions over 5,000 euros, lowering the ceiling from 12,500 euros In …
The end is in sight
For the last hundred years or so, people have been predicting that the welfare and affirmative action state would collapse eventually. Well, it seems that “eventually†is getting close. Arnold Kling has a list of links showing that all the welfare state social democracies are going to hell in a handbasket, with everyone else in even worse trouble than the US. Arnold Kling predicts a US debt crisis between 2015 and 2035. Public sector pensions are unpayable. The welfare state …
Atlas did not shrug
The cathedral has pursued a policy of compromising with and absorbing competing elites – thus it both allowed the big banks to capture the regulators (resulting in financial crisis, but consolidating the elite’s power over ordinary Americans) and allowed the Soviet Union to infiltrate the US government (thus causing wars and communist victories, but consolidating the elite’s power over ordinary Americans). As Dusk tells us: look at how much regulation the banking industry came under during the 1990s and 2000s …
Treasury committed to supporting too big to fail
Government lacks the will to allow to big to fail firms to fail, and the will and competence to regulate them. If a firm is too big to fail, it will take advantage of that fact, leading to crisis and massive tax payer losses.
Seventy percent taxes coming eventually.
In Greece, payroll tax, value added tax, and income tax adds up to around seventy percent. It is perfectly clear that this is far above the Laffer limit – the private sector in Greece is largely underground and not quite cash, like a third world country. If someone is employed by the state he pays taxes on his income because employed by the state, but does not actually do any work, because employed by the state. If someone is not …
The cost of government
Fleischer explains why he is not hiring. He must spend $74,000 to provide Sally with an $59,000 salary, of which after tax she gets $44,000 plus $12,000 in benefits. Plus he faces large uncertainty that these costs may be arbitrarily and unpredictably increased. The recent substantial increases in the cost of employing people have not been reflected in substantial reductions in people’s wages, thus wages are substantially above market clearing levels. The Fed could, I suppose, inflate their way out …