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After the housing crash of 2008, millions of US borrowers were suddenly plunged into a negative equity position of their homes where the amount they owed to lenders exceeded the value of the property. The problem was so bad that it has motivated cities to consider eminent domain to seize the underwater debt of borrowers (as in Richmond and San Bernardino California). Here is a recent map of negative equity from Zillow. zillowmapofnegeq These borrowers have nothing on Uncle Sam. Uncle Sam now owes $17 trillion to bondholders. GFDEBTN_Max_630_378 (3) Currently, Uncle Sam has public debt equal to 100.46% of...

Before I went on The Willis Report on Fox Business to discuss the latest FHA bailout, reporter Rich Edson discussed the pending government shutdown. That is, The House passed a continuing resolution without Obamacare funding, the Senate put Obamacare back in the continuing resolution, and now the ball in the House’s court with only days to go …. to government shutdown! Zero Hedge has a nice summary of the negatives associated with a government shutdown. Suffice it to say, it is all about the crippling Obamacare legislation. Regardless of the government shutdown or not, labor force participation rate will continue...

You know me too, Frank -- we met at McStain's campaign shindig at the University Club in Washington DC in the summer of 2008. I recall that you and Governor Ridge both refused to take a stand on all the frauds in the mortgage market -- the very frauds that just a couple of months later led to the failure of Lehman, the market crash in general and the ensuing disaster. It figures that you're now the President and chief executive of the American Bankers Association [ABA]. It must be really, really awesome to have your candidate suspend his campaign...

Before I went on The Willis Report on Fox Business to discuss the latest FHA bailout, reporter Rich Edson discussed the pending government shutdown. That is, The House passed a continuing resolution without Obamacare funding, the Senate put Obamacare back in the continuing resolution, and now the ball in the House’s court with only days to go …. to government shutdown! House Republican leaders are proposing to attach a one-year delay of Obamacare provisions and a repeal of the medical-device tax to a short-term spending bill and send it to the Senate, said Representatives Michael McCaul and Kevin Brady of...

<p>WASHINGTON — The Treasury will only have $30 billion of cash on hand by mid-October, putting the United States on the precipice of an unprecedented default, the department said on Wednesday.</p> <p>The warning puts additional pressure on a hamstrung Congress, which is already struggling to prevent the federal government from shutting down over a budget impasse on Oct. 1.</p>

President Barack Obama will appeal to business leaders on Wednesday to urge Congress to approve an increase in the U.S. debt limit and avoid a default that is possible as early as mid-October. Obama is to address the Business Roundtable as part of a renewed push to focus on domestic budget and economic issues after a month dominated by foreign policy. The U.S. Treasury is expected to exhaust measures to avoid exceeding the $16.7 trillion debt limit as soon as mid-October. If the cap is not raised, the United States will not be able to pay all of its bills...

The toll-road authority of Orange County, Calif., is nearing the biggest municipal default since Detroit's record bankruptcy ... The Foothill-Eastern Transportation Corridor Agency... risks default on $2.4 billion in debt, according to a consultant to the Debt and Investment Advisory Commission of California Treasurer Bill Lockyer.

If I invoke the phrase “Greek debt crisis,” do your eyelids start to grow heavy? Do you somehow find it difficult to summon up a fresh wave of outrage if someone mentions that when Barack Obama’s National Commission on Fiscal Responsibility and Reform (better known as the Democratic Tax-Hike Justification Front) convened for its second monthly meeting last week, Congress was already 41 days past its April 15 deadline for passing a budget resolution — scared to death to admit, in an election year and the third year of the Second Great Depression, just how much new debt and spending...

The U.S. Justice Department has subpoenaed documents from what was Wall Street’s largest mortgage due-diligence firm as it ratchets up an investigation into bank actions in the years before the financial crisis. The Justice Department delivered a subpoena to Clayton Holdings LLC last month for an extensive number of documents related to the firm’s work on residential mortgage-backed securities deals. Information sought includes due diligence reports, internal communications related to reviews of pools of loans and correspondence with clients, according to a copy of the subpoena filed as an exhibit in federal court. Let’s take the case of the FHA....

I bet you were going to say Phoenix, Las Vegas, Riverside or Tampa had the highest HAMP re-default rates. But it’s Danville, Illinois. According to the Quarterly Report to Congress (dated July 24, 2013) of the Office of the Special Inspector General for the Troubled Asset Relief Program (SIGTARP), The leading metropolitan areas with the highest redefault rates on modified mortgages were highest is Danville IL at 50% re-default rate, Sumter SC at 44% and Rocky Mount NC at 40%. redfULYS See the SIGTARP report here: July_24_2013_Report_to_Congress Here is a table of Sand State (AZ, NV, CA, FL) re-default rates....

Moody’s Investors Service late on Monday said that it considers Cyprus to have defaulted after the debt-stricken island country swapped some local bonds for longer-term bonds. The ratings agency, which does not use a “default” or “selective default” rating, said it will revisit Cyprus’s rating to assess the impact of the exchange on the sustainability of the nation’s debt burden. Other factors, including the likelihood that Cyprus will comply with the rest of the measures spelled out in its bailout agreement with the International Monetary Fund, the European Central Bank and the European Union, will be taken into consideration as...

And so the next casualty of the inevitable municipal collapse appears, which is, as expected, that one-time symbol of all that was right with a (once upon a time) manufacturing America, having since been replaced with the anti-symbol of all that is broken: Detroit. DETROIT BEGINS MORATORIUM ON ALL DEBT SERVICE PAYMENTS FOR UNSECURED FUNDED DEBT DETROIT TO DEFAULT ON CERTIFICATES OF PARTICIPATION DUE TODAY And, true to from in the New Normal America, where the "fairness doctrine" rules supreme under Big Brother's watchful eye, the premise of the upcoming glorious recovery is a well-known one: "the shared-sacrifice." To wit:...

Former Federal Reserve Chairman Alan Greenspan said that the USA will not default because we can print money. Assuming someone accepts it, that is. The Federal government continues to splurge on spending and running up the Federal debt to dizzing heights in the process. The US does have a printing press, but is it enough? The US has a probability of defaulting on its debt of 2.59%. Or a medium risk of default. That compares with a 93.12% of default for Greece and 52.01% for Spain, all in the high risk category. The USA is in the medium risk category...

Former Federal Reserve Chairman Alan Greenspan said that the USA will not default because we can print money. Assuming someone accepts it, that is. The Federal government continues to splurge on spending and running up the Federal debt to dizzing heights in the process. The US does have a printing press, but is it enough? The US has a probability of defaulting on its debt of 2.59%. Or a medium risk of default. That compares with a 93.12% of default for Greece and 52.01% for Spain, all in the high risk category. The USA is in the medium risk category...

In an interview with ABC’s George Stephanopoulos on “Good Morning America,” President Obama asserted that “there is no debt crisis in this country” and says he sees “no reason to bargain with Republicans over the budget.” “The amusing little analogies Republicans are making about households having to make cuts when times are tough simply don’t apply to the federal government,” Obama declared. “I’ll grant that debt can be a problem for households having to cope with limited resources. But how is this relevant to the government?” “Let’s assume we were going to pay back what we borrowed,” the President said....

The “Zero Hour” Scenario By Addison Wiggin 03/08/13 “Possession is nine-tenths of the law” —from a Scottish expression It’s a Sunday night. October 2013. Parents are making sure the kids’ homework is done. Football fans are settling in for the night’s NFL matchup. Reigning champs, Baltimore, are about to lose. And all hell is breaking loose in the precious metals markets. Moments before electronic trading opened at 6 p.m. EDT, Commodity Exchange Inc. — the Comex — announced it would settle a large gold contract in cash and not gold. To be blunt about it, the Comex has defaulted on...

A recently issued report by the Government Accountability Office says that the federal government is on a financially unsustainable course. The debt is so large that the anticipated annual interest payments are expected to exceed the economy’s rate of growth. The government would have to run annual budget surpluses just to maintain its current debt to GDP ratio. Despite all the publicity being given to the so called draconian cuts envisioned by the sequester, there are no actual cuts to spending. At best, only the rate of growth in spending would be slowed, but not by enough to generate a...

House Republicans on Wednesday are hoping to present a united front and jump-start the next several months’ worth of budget negotiations by approving a short-term debt-limit extension with near-unanimous GOP support. Members will vote on a “limited suspension” of the federal debt limit through May 19, which would temporarily allow the Treasury Department to issue new debt to cover obligations incurred during that period, along with a measure that would withhold Senators’ pay if they fail to pass a budget. “All we’re saying is: If the president and the Senate, if this country needs to incur more debt — Senate,...

WASHINGTON, D.C. – This afternoon, Sen. Rand Paul introduced the Default Prevention Act, which would require the President to prioritize federal revenue to interest on the national debt. Since the current debt limit was reached on Dec. 31, 2012, it is expected that the extraordinary measures the U.S. Treasury has taken to continue funding the government will be exhausted before March. In order to remove any chance of government default, Sen. Paul’s legislation spells out which government-funded programs should be held at the highest priority to continue funding, while paying down the interest and principal on debt held by the...

Nobel Prize winning left-wing economist Paul Krugman maintains that concern about bloated government spending and multi-trillion dollar debt is unwarranted. “The right-wing enemies of President Obama are playing on the average person’s fears of bankruptcy in order to limit his power,” Krugman said. “While it may be true that an individual who owes more than he can pay could face financial ruin, the same is not true for the Government.” “A key difference is that most individuals’ income is restricted to what they can earn by offering services in the marketplace,” Krugman continued. “Government, though, doesn’t have to earn its...