[PhilosopherStones]

I hate government intervention as much as anyone, but we basically have two choices: assume the debts, or let them be deflated away.

What you have to remember is that we are dealing with panic here. These mortgages are backed by real property so the down-side risk is minimized. The problem is that people can’t refinance (even though mortgage rates have come down) because the market has no liquidity. Because they can’t refinance, they are stuck in high rate mortgages that they can’t afford leading to more foreclosures.

The key here as always in a business cycle is “knowledge” and “confidence”. The absence of both is a recipe for another Great Depression.

[Deo et Patria]

You’re making way too much sense for this thread. Stop it right now!

We now return to our regularly scheduled doom-saying.

[politicket]

These mortgages are backed by real property so the down-side risk is minimized.

No my FRiend, you're missing the entire point. As I stated on a previous thread, the mortgage problem is just the short fuse on an enormous stick of dynamite. The dynamite is composed of the $500 trillion+ notional dollars of the derivatives market. THAT is what is making the international markets need Depends. It is why lending and borrowing between international institutions has dried up.

The Feds needed to do something to keep the derivatives market from exploding. They think that by throwing away our U.S. Constitution and instituting Socialism they can "fix" the problem.

This will just cause the problem to get worse! Asia (mainly China) has their hands around our throats due to the tremendous amount of our IOU's that they're holding. Our problem is that we don't export anything except Treasury bills, while importing a bunch of garbage that we don't need.

[Notary Sojac]

These mortgages are backed by real property

In many areas, the property will bring at auction 60% or less of the face value of the mortgage. The question is, do the taxpayers become the bagholders for that 40%?? We already know the answer, don't we?

[Notary Sojac]

These mortgages are backed by real property

In many areas, the property will bring at auction 60% or less of the face value of the mortgage. The question is, do the taxpayers become the bagholders for that 40%?? We already know the answer, don't we?

[AndyJackson]

I am dead set against any solvent business being able to offload its paper onto the really toxic debt agency. The first thing to eliminate is moral hazard. Make the folks who created the bad debt be first in line to suffer the consequences. Then, if the company is insolvent, take the company - lock stock and barel - all of it - sell off the good assets and put the other stuff in deep storage if that is what makes sense. But I am dead set against any notion that lets the crooks that created this mess keep their jobs and their oversized share of the loot when times were hot.

No one is going to let me give my debts to some government agency while I get to keep my profitable assets and my job.