tag:blogger.com,1999:blog-4921988708619968880.post7574725250162106094..comments2024-02-28T22:03:57.237-05:00Comments on The Automatic Earth: Debt Rattle, January 24 2008Ilargihttp://www.blogger.com/profile/09698428009501267664noreply@blogger.comBlogger9125tag:blogger.com,1999:blog-4921988708619968880.post-87455343112472738162008-01-27T20:13:00.000-05:002008-01-27T20:13:00.000-05:00Once it becomes socially acceptable to walk away f...Once it becomes socially acceptable to walk away from an upside down mortgage on a house, it also become socially acceptable to use the mortgage market to protect against the possibility of not being able to sell your home at an adequate price. <BR/><BR/>To do this, all a person has to do is increase his mortgage to the maximum amount available, before putting the house up for sale. Then, if it Gail the Actuaryhttps://www.blogger.com/profile/10297597051464304720noreply@blogger.comtag:blogger.com,1999:blog-4921988708619968880.post-89105751644037579692008-01-24T16:24:00.000-05:002008-01-24T16:24:00.000-05:00The US government and its citizens can not actuall...The US government and its citizens can not actually afford a lot of things they have been doing, but none of this has stopped them from doing it anyway -- largely due to the fact that we've passed along these $ IOU's to other countries for their real goods which their governments in turn have used to buy up our US Treasury notes, which only lends itself to greater indebtedness.<BR/><BR/>Of coursegodrazhttps://www.blogger.com/profile/15585439434600849499noreply@blogger.comtag:blogger.com,1999:blog-4921988708619968880.post-89745220316470921282008-01-24T15:17:00.000-05:002008-01-24T15:17:00.000-05:00Hi PeakTO,The Fed doesn't print money - it acts as...Hi PeakTO,<BR/><BR/>The Fed doesn't print money - it acts as midwife for credit creation, but that requires willing borrowers and lenders. Money and credit are not the same thing, although they've functioned interchangeably for a long time. The difference is that credit can evaporate at inconvenient times - when loans are repaid or defaulted upon or when a debt-based asset class ceases to be Stoneleighhttps://www.blogger.com/profile/15099878430757036461noreply@blogger.comtag:blogger.com,1999:blog-4921988708619968880.post-2072226751370331642008-01-24T14:44:00.000-05:002008-01-24T14:44:00.000-05:00GZ,Funny notion that, the US government as lender ...GZ,<BR/><BR/>Funny notion that, the US government as lender of last resort. There's two little details that stand in the way. The banknotes state it rather clearly: we trust in G-d to make taxpayers pay enough to keep the boat sailing. That's all the collateral we have. Plus, those notes are not government, but Fed notes, which makes the Fed the always and default lender of last resort.<BR/><BR/>Ilargihttps://www.blogger.com/profile/09698428009501267664noreply@blogger.comtag:blogger.com,1999:blog-4921988708619968880.post-7818265252974159922008-01-24T14:23:00.000-05:002008-01-24T14:23:00.000-05:00Stoneleigh - Isn't any bailout package by the gove...Stoneleigh - <BR/><BR/>Isn't any bailout package by the government just another FED printing and tons more inflation. <BR/><BR/>The US government is broke, and doesn't have any money to give, so it 'borrows' more from the FED.peaktohttps://www.blogger.com/profile/17444882512154967449noreply@blogger.comtag:blogger.com,1999:blog-4921988708619968880.post-33654799523056505972008-01-24T13:19:00.000-05:002008-01-24T13:19:00.000-05:00I have no doubt that the government would like us ...I have no doubt that the government would like us to think it's prepared to act as lender of last resort in order to calm the market's nerves. Unfortunately, when governments try to paper over wide cracks with trifling sums and rhetoric, the markets tends to call their bluff. <BR/><BR/>This plan is good for a rally (that is to generate another group of empty bag holders), but IMO it won't work Stoneleighhttps://www.blogger.com/profile/15099878430757036461noreply@blogger.comtag:blogger.com,1999:blog-4921988708619968880.post-49497736967370939402008-01-24T12:56:00.000-05:002008-01-24T12:56:00.000-05:00The current bailout is supposedly going to be from...The current bailout is supposedly going to be from the banks and brokerages. However, it already has signs of the difficulties that the SIV Superfund bailout had, only much sooner.<BR/>My understanding of this problem is that they cannot allow these insurers to fail. So they will get bailed out. The bill for it will likely be between 130 billion and 200 billion when all is said and done. I Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-4921988708619968880.post-8879506509776720392008-01-24T12:50:00.000-05:002008-01-24T12:50:00.000-05:00http://www.markfiore.com/http://www.markfiore.com/Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-4921988708619968880.post-36681466588886120022008-01-24T12:24:00.000-05:002008-01-24T12:24:00.000-05:00The Dodd proposal, coupled with the recent Fed cha...The Dodd proposal, coupled with the recent Fed changes and the calls for the government to back the monoline insurers place us pretty close to the government becoming the lender of last resort. Since that has not happened before ever that I can see, I am wondering what impact that might have here. Specifically, I am wondering if that might be the key that lets the irrational views dominate yet a Greyzonehttps://www.blogger.com/profile/03675706201111951125noreply@blogger.com