However, if you just clear the cloggage without changing the diet and lack of exercise, we’ll do this again in about 8 to 10 years.

But of course that’s not preventable, because as we all know, the economy is cyclical. /snark

PDF transcript:
http://www.thislife.org/extras…..script.pdf

While this was a wonderful explanation, it seemed to me that, as I wrote to elef junior,

The banks make the loans. They are indeed pressured to make NINAs. BUT … years before, there was such a thing as bank regulations that prevented banks from making such loans. Why did those regulations disappear? Which congress critters made them disappear? (And are any of those lawmakers running for national office in the next election?) A whole one-hour show without the words “regulations” or “congress” or “President” or “government”?

As of now, Foreclosures are in Clusters — that could change, but when a house is sitting vacant, unrented or unsold, chances are the Property Taxes are unpaid, and since these support Police, Fire, EMS, K-12 Schools and teachers, Garbage collection — a significant cluster has dire consequences for local government.

What Securitization of Mortgages means is that they have been sliced and diced into pieces, and one share may represent several hundred to several thousand houses sliced up according to various risk estimates. The owners of the hundreds or thousands of shares in one mortgage may be all over the world. Some of these securities have been structured with heavy risk — intentionally assuming losses, which offset gains on other income investments for an individual investor. It strikes me that one of the first things that necessarily needs doing is to totally unravel this ungodly practice, making an individual mortgage a whole piece of paper. Computers may help in this task — but it will be huge.

I’d like to start with what is the real asset, the house and the lot. My idea of a good program would be to establish a state agency in each state under overall HUD direction (no need to invent another Housing Agency when we have one), and then establish non-profit management teams to locally manage the assets (houses), gradually market those that can be re-sold to residents with yep, fixed rate long term mortgages, and then rent and properly manage those that can’t be sold now — rent at market rate, pay the RE Taxes, hire unemployed construction types to do repairs, etc., and then over time, offer the rental units for sale. This would tend to support neighborhood property values, and maximize longer term ownership and rentals, which make a community more desirable.

In the meantime who actually owns Mortgages can be sorted out, they can be discounted, conveyed to the State Housing Authority, and clarity of title established. I would make it very clear this is not to be “out-sourced” those who manage and sell these assets would be plain ole Civil Servants working for the State Housing Authority.

We need to also understand that many of the holders of these securities are public employee pension plans, with the beneficary being current retirees and future retirements. They get hurt two ways going — fired or laid off if local taxes on RE Assets are unpaid, or screwed on retirement if the sale or reorganization of the paper they hold isn’t fairly dealt with. What AIG is partially about is that they insure vast amounts of this Pension Plan Paper.

Anyhow — I think the best way to get this done is to get the housing assets rented and then gradually sold because then they are performing assets, even if way discounted, and then we can have an argument over how to deal with financing local services budgets and all the rest.

time is short, if we want to think through and proposed some ideas of our own.

Their plan is to NOT give you that time. That’s why Cox banned short-selling. It prevents rational behavior. They control the cards, the timing, the sequence and use it they will.

I suspect, after Bushies cronies have sold short they’re set for the valve to be opened. Second, they buy up the market to push people in. Then, next, they open the valve and flush everybody out (market crash for financials perhaps) and then they rebuy & pocket tons of moolah.

The counter-strategy has to be to get out on top, after they bought it up high, and make some profit. Then sit & wait out the thrashing. Let it go haywire, cuckoo wild as an ice sheet crashing into the ocean.

Perhaps then, as it’s on the way down, one can simulate the short-sell action by buying back just above the Bushie cronies and restabilize the market before they get to settle their shorts.

But, where are they set to settle? Can one know that? How to know where to get back in without getting crushed by the herd running off the cliff?

The whole things is scary and can happen within an hour. Milton Friedman would be deliriously happy to see all this. BTW, his books are booooring.

Milton Friedman, who says that only a crisis, actual or perceived, produces real change. He says when the crisis hits, the change depends on the ideas that are lying around. So it’s not just about recognizing the pattern, it’s also about having your ideas lying around when the next shock hits.

– Naomi Klein

Yes, and what ARE those “ideas lying around” just now? Well, Repubs just bought into Socialism, didn’t they? What will Dems pick up and use? The language has been “1929 crash…FDR saves the day”. But, Friedman’s philosophy is largely based on his youth, growing up in the 1920s and seeing how, in his terms, the Great Depression was how Dems governed and ruined everything. Like some Repubs today he preferred to ignore placing responsibility for the Crash.

I think Dems have to use restraint, pragmatism, good sense of what has worked in the past and a lot of compassion for people who have been or might be hurt if they fail. Having a variety of KINDS of Dems in the room might help to get a well-rounded solution. And the rest of us? Pray.

I don’t believe this statement is true, at least not in my experience. Can you clarify?

they can opt into this plan or accept the forclosed properties, which they do not want to do

Good thinking, but I think they used that idea to some extent in the Dodd-Shelby-Frank Housing bill/law and now they see a much larger problem which they want to push through a refinance formula faster. Depending upon lenders & borrowers is slow-going.

However, once this new HOLC or RTC has bought a mortgage and re-jiggered it there’s no reason the “homeowner” should be pushed out. The idea is to fix the problem to KEEP people in their homes (at least the home they’re living in).

Think of the Housing law as being like some Drano and the HOLC or RTC as more like a snake. One is a bit slow, but not so dangerous and the other is fast & effective, but might cause some damage.