Rising Foreclosures are actually BULLISH for the economy - let me convince you in this thread

reply to post by really


did u look up george soros and jim rodgers?

its a good book report anyways lol - interesting story x10000 if you love $ and the market

reply to post by GreenBicMan


This isn't really aimed at you, GreenBicMan, I actually agree with you to a certain extent this time, and I've agreed with you in the past on some things.

However, I've got to say that topics like this disgust me. All I see is people talk about the economy and money like it doesn't matter, like its all a big game and that they can just press "Reset" when things don't work out, like whatever happens has absolutely no effect whatsoever on anyone.

When major retail chains have to close their doors because customers are not spending money, people say "No big deal, its cheaper on Amazon anyway." News flash: those "s**tty" retail jobs really DO matter. Not everyone is able to go to college, so they can't get a better job, and they have to either feed themselves or their families off of what little money they make. When they lose their job because the store closes, they have no choice but to look for another "s**tty" retail job somewhere else.

But oh wait, they just get a job at a company like Google or Microsoft. Actually no, they can't. Most people that work those "s**tty" retail jobs are working those jobs because they couldn't afford to go to college. So what is John Doe to do when he can't find another "s**tty" retail job and in affect feed his family? Well, according to every single person I have heard talk like this is some fantasy-world game, he just borrows the money and goes on Food Stamps. But wait, Food Stamps eventually run out, and the Loan Master will come looking for his money when a payment is due. No problem, say the "experts", just borrow more. But what happens when John Doe can borrow no more? What happens when no one will loan him any money because he cannot pay off his debts? Or better yet, what happens when the Loan Master is himself all out of capital? We print more? Ok, but what happens after that when people still are in debt past their eyeballs? Do we have an endless cycle where eventually everyone keeps printing more and more money because no one can afford anything anymore?

I know you'll probably come back with a bunch of mumbo-jumbo about this and that, and how the US has always pulled through it before. I am not an expert in Economics, not by a long shot, but that doesn't stop me from seeing, and realizing, that we have a very serious problem on our hands. Ok, we might make it through this time, but what about next time? Or the time after that? People, including the Government, have got to realize that they cannot keep spending way past their means, because one day the Loan Master (or maybe China) will come knocking for his money.

reply to post by riddle6


I dont disagree with anything you said

I could make a seperate thread pertaining to the downfalls of this environment

This is totally about discretionary spending though in an environment of someone squatting/going into FC and that has "x" % more disposable income than usual

good post

[edit on 30-11-2009 by GreenBicMan]

[edit on 30-11-2009 by GreenBicMan]

[edit on 30-11-2009 by GreenBicMan]

reply to post by GreenBicMan


Thanks.

It really is crazy what people are getting themselves into.

I probably should have put this in my first post, but I was more responding to the one post (or really conversation) about retail and buying things online or at places at Wal Mart.

There's no way I would even try to touch anything related to Bankruptcies or Mortgages or all of those Loans that have really weird sounding names to someone who has yet to deal with that kind of thing (I try to not talk about things that I have no idea about. A meeting from the Loan Master though, I can atest to, even if it was happening to my parents and not me).

reply to post by riddle6


Yeah you would have to meet with the loan master and the keymaster as well. Ask for Zhoul - Zhoul knows all lol.

(gotta like ghostbusters to understand this one)

Its a crazy world indeed

This thesis given the unemployment situation is about the only reason i can think of why there is any activity by the consumer.

Before anyone tries this technique to have some extra disposable income however I advise a couple of things first. Consult both an attorney and a tax professional before doing it. MAKE sure you know whether you live in a recourse or non-recourse state and how you mortgage is viewed.( In most non-recourse states a first mortgage is non-recourse whereas seconds and refi's are often recourse). Laws vary greatly from state to state so know where you stand before squatting. Use the first few missed payments to retain a lawyer for the eventual foreclosure, set aside deposit and firs/last months rent for your eventual removal, and spend a little on consumer stuff like lottery tickets and plasma TV's. Remember you as the consumer are 75% of the economy you are doing your patriotic duty by spending frivolously after making this decision. When the foreclosure actually arrives use that lawyer to make them produce the proper forms and prove the right to foreclose. So many originators have gone out of business, the paperwork was so sloppy during the boom years, and most loans have been sold umpteen times I've heard of several foreclosure cases thrown out due to the forecloser being unable to prove to the court they had the right to foreclose. If you're lucky enough to get a resolution like that, continue to pay the taxes and make improvements on the property and file for a "quiet title" after the time required to do that has passed.

And do not forget, never let anyone make you feel bad with words like "deadbeat", "loser", or worse. Ignore phrases like "keeping your word", "honoring obligations", and others engineered to try to put a moral component on a business decision. When corporations go bankrupt they care not about the bondholders that are getting screwed so why should you care about a banks balance sheet? Many of the people who would call you "a dead beat who doesn't honor his obligations" are jealous of your circumstance and do not understand that even in default you are still conforming to what was in the mortgage document (quit paying get foreclosed).

Also,
What happens to those people who are lets say "foreclosed spenders" if they are on government assistance? What happens when the assistance is gone? Where is the spending then? I don't buy smoke screens. Our "consumer" based economy is based on smoke screens. I was listening to the radio and a ad spot came on for AMX which is American Express it was about a group of women who got them selves into "debt" and formed this support group calling them selves "smart cookies" now think about what I'm about to say and this is the ad. The one lady said by using a American Express card it helped her control her debt. Because it forced her to pay it off every month. Think about the whole picture of this advertisment. America Express is advertising that you can still spend or go into debt as much as your limit will allow as long as you pay it off at the end of the month. This is the whole problem with America's economy. The banks who YOU trust to put your money into give you the means to take as much cash from you in the form of credit cards and consumer options for purchase. The whole crazyness about the American Express is a person who was in debt trouble is paying a credit card

Originally posted by GreenBicMan
reply to post by jefwane

 

alright, thats makes like 3.5 people and an old sailor that agrees with me.. this is catching on

I disagree because I think people that are being foreclosed on haven't been paying their mortgages for a long time. Using your example once the foreclosure hits they will be spending $900 on rent instead of nothing. If they had been spending that $1200, then they wouldn't be getting foreclosed on. So if anything a foreclosure means less money being spent in the economy because they folks now need to spend money to get a roof over their heads.

Maybe foreclosure is the wrong thing to point at. People that walk away from a home they are currently paying on would produce the results you posted, although the cost to rent vs. own is pretty even at this point so the benefit would be debateable. Those who get their debts released through bankruptcy could posssibly fit your scenario but still unlikely. I know one guy who has $3700 in monthly credit card bills who is getting that reduced to $250 month for 3 years in a chapter 13 bankruptcy. Then again he wasn't paying already and all the spending in previous years was basically on credit, so even with the reduced debt load he will be spending much less than in the prior years. however if his income rises after it is finalized, then he will indeed be able to spend more into the economy. I think he will save instead of spend as he has learned his lesson.

All in all your theory is wrong simply because those being foreclosed on have been paying nothing and now they have to pay rent.

Right, I've read four pages of this utter guff I'm not going to read anymore because you can't seem to realise you've been totally owned on this thread. Despite the guff though, it has been amusing to watch someone with such dire knowledge of economics claiming such wisdom.

You keep saying flight to quality. NO it's flight to PERCIEVED safety.

You keep saying the dollar rose a lot a while back. NO the dollar recovered SOME of its devaluation TEMPORARILY when the bail outs encouraged the banks to continue in their recklessness.

You bang on about increased GDP, well that is in part due to the point above but also due to something you have totally missed from your theory. When recession hits, companies let their stock levels drop due to decreased sales, cashflow etc. However at some point they all have to restock and the domino effect of this is often the time you see these illusiory increases in GDP. GDP doesn't care where it came from.

You say America does produce lots of things. NO America does not. It is a service economy and the vast majority of manufacturing for American Branded products is done in Asia. So as cheap as those wages are to the company, they do absolutely nothing for the part of the American economy that owes its existence to stateside employment and wages.

America does such limited manufacturing that the statistics now class Macdonalds staff sticking a burger in a bun as manufacturing!

If you studied markets, capitalism and economy well enough you'd realise that there is absolutely no reason for them to be cyclical. They only become so because the system is corrupted and human memory is so short. It's no accident that such economic meltdowns tend to happen around every 80 years, close to the average human lifetime in modern countries.

There are many ways to run a successful capitalistic economy that remains in stable sustainable growth indefinitely. We need to go back to a time when corporations were only allowed to exist as a temporary entity to serve a public need. We also need to find a way to limit the corrupting influence of generational wealth. There are less than 2000 families controlling the vast majority of every aspect of human civilisation. So, no matter how right wing and selfish and amoral you may be, you must see that unless you are a member of one of these families the world is hopelessly rigged against you.

You'd do well to look up colonial script, the tally stick system and other styles of economies from the past. The main thing they tend to have in common is NO PRIVATE CENTRAL BANK WITH SOLE RIGHT TO PRINT CURRENCY.

Death to laissez faire long live regulated capitalism.

[edit on 30-11-2009 by spookfish] Edit to remove uneccesary quotes.

[edit on 30-11-2009 by spookfish]

reply to post by sligtlyskeptical


There are thousands of people I hear about who have received notice of default and have been living in their home 6-9 months after paying their last monthly payment. This seems to be most prevelant in bubble states like Cali and Florida though. What I'm saying is quit paying save a little money while waiting to be foreclosed. YOu were payine $1200 a month in mortgage quit paying 6 months ago that's $7200 in disposal income in that timeframe. Don't leave until the Sheriff makes you $7200 would pay a security deposit and first and last months rent for when you have to move and still leave plenty to stimulate the economy.

Originally posted by jefwane
reply to post by sligtlyskeptical

 

There are thousands of people I hear about who have received notice of default and have been living in their home 6-9 months after paying their last monthly payment. This seems to be most prevelant in bubble states like Cali and Florida though. What I'm saying is quit paying save a little money while waiting to be foreclosed. YOu were payine $1200 a month in mortgage quit paying 6 months ago that's $7200 in disposal income in that timeframe. Don't leave until the Sheriff makes you $7200 would pay a security deposit and first and last months rent for when you have to move and still leave plenty to stimulate the economy.

if you had the money to pay why would one stop paying? You want to be foreclosed? It's really a sillly idea. Most people stop paying their mortgage because they are no longer able to, not because they choose to. Foreclosure is a last resort. Thus at best they are able to save a portion of the mortgage payment which will now be used to pay rent instead. Those that choose not to make good on obligations that they able are nothing but common thieves in my book. Even in your example being foreclosed cost you an additional $900 per month once the foreclosure hits.

reply to post by GreenBicMan

No kidding? I think this is what happened...

HOW TO MAKE A BUNDLE IN REAL ESTATE, BANKRUPT THE MIDDLE CLASS AND STICK IT TO CHINA

1) Buy low, then persuade Pres Bush to remove scant remaining FDIC leverage controls.

2) Now artificially raise value of home property and give loans to everyone who has a pen.

3) Bundle the "fattened up" loans and sell them to China.

4) Drop home values back to realistic levels.

China & over leveraged homeowner tanks, but who cares? lol Thats why we have social programs! You care about China? You must be a communist anyway.

5) Now the home is back on the market at 1/3 the price.

Take money China paid for the inflated loans and buy three houses.

6) Use every means possible to lay the blame for ensuing chaos on darn liberal democrats.

A simple transfer of wealth...and the rich get richer...by design.

Originally posted by jefwane
And do not forget, never let anyone make you feel bad with words like "deadbeat", "loser", or worse. Ignore phrases like "keeping your word", "honoring obligations", and others engineered to try to put a moral component on a business decision. When corporations go bankrupt they care not about the bondholders that are getting screwed so why should you care about a banks balance sheet? Many of the people who would call you "a dead beat who doesn't honor his obligations" are jealous of your circumstance and do not understand that even in default you are still conforming to what was in the mortgage document (quit paying get foreclosed).

Jefwane, this is one of the greatest posts I've ever seen on ATS. Not just the part I've quoted above but the whole post (just don't want them to deduct more points for quoting too much). Really.
It is correct in facts, responsible to the viewing audience and oh so right about the moral aspect of it.
People, you are not screwing over your family, friends or the dude who sold you their car. These corporations care nothing about you. They care nothing about proper business practices.
As Jefwane said, just find out about your state law and the contract you entered into. Consult a professional.

Also, to jefwane's post, try as long as you can to hold off the bank. Make contact with them and tell them that you have had an unexpected emergency. You will make up the payments as soon as possible.

Also, I noticed a couple out their that have asked why would one renege on their loan.

If you owe on your mortgage say 225,000 and the house is only worth 180,000 sometimes your bank or mortgage holder gets a little leary. And why would you pay $2 for $1.3. That is why.

My sister's mortgage holder actually asked her to cover the difference in the mortgage and value to cover some bull# points. She is pulling my delay tactic as we speak.

Boo hoo to the banks and mortgage holders. They cause this fracking mess.

Originally posted by endisnighe
Boo hoo to the banks and mortgage holders. They cause this fracking mess.

Absolutely! If these banks and lenders were ethical they wouldn't have lent out to people they thought couldn't pay it back nor would they have made these dirty exploding mortgages.
On the same point, screw the credit card companies and their usurious rates. I don't care if the feds or states say 13%, 17, 21, 27% is not usurious, it is!

reply to post by rusethorcain


You're observations align with mine, purely a neat trick to gouge anyone 'stupid' enough to believe you're instrument was was an AAA security - because you said it was, and the ratings agencies said it was. "Fools!" Ya - that's called fraud.

It was basically a con game - and now the conned have to pay up - and the fraudsters? Well - they get paid - jail? No - no - they own the legal and political systems - no chance of that.

The idea that foreclosure is 'bullish' for the economy leaves out one significant detail - the obliteration of wealth that was contained in equity.

Most people would have paid a deposit - many had probably paid a significant sums, and had built real equity - in other words they had used their equity as a savings account.

With the destruction of that value - those savings have disappeared. In the short term that might forcibly stimulate people to spend more, so maybe you could say its 'bullish' for the economy. However in the longer term - that money that was 'saved' in the mortgage equity is gone forever - it cannot be spent at a later date, it cannot be found anywhere - its vaporized.

So, is foreclosure bullish - perhaps in a very short time frame - however, in the longer term it means that people will have less money overall - they might have retired and gone on holidays, bought an RV - or boat - but now those things are gone.

In the short term - there might be increased spending as people have to reorganize their lives to deal with foreclosure - but afterwards - they have simply lost that extra money that would have been spent into the economy later.

Overall - the housing collapse represents a destruction of personal wealth - declining conditions force lenders to tighten credit, and those once freely spending will be considering ways to save - once bitten, twice shy.

The logic that it is in general bullish, overlooks the fundamental destruction of a large proportion of consumer wealth - money that can no longer be spent - ever.

PS: It is also ghoulish to separate the 'economy' from the impact of personal losses.

What is more and more prevalent is the underlying truth being revealed - that the economy is the corporate economy, and the 'slave class' are simply to be used to energize it.

Even if the economy was growing and doing great - if everyone is living in poverty, then it is nothing to cheer about.

It doesn't matter what the economy does - it is no longer relevant to the working class - corporate profits often reflect goods manufactured by foreign labor, and sold outside of the nation. What benefit is it to the average person if such corporations make millions?

Investment banks were apparently responsible for 40% of US GDP before 2008, how many people do they employ - and what benefit is that to the average person? It was a shell game that produced no goods - it was simply the illusion of wealth created by shuffling worthless paper to and fro.

The economy is no longer a useful measure of the average Joe's prosperity - a new measure is needed - one that ignores corporate profit, and focuses on standard of living.

[edit on 30-11-2009 by Amagnon]

It appears with ALL of the replies to this post that there are many users posting and answering themselves under different names.

Some have too much time Must be TPTB

Is there really anyone out there that believes this B.S.

People forced out of their homes good

FORGIVE THIS AND NEXT LINE WITH ALL CAPS -- BUT DO IT!!!!!!!!!

BRING OUR TROOPS AND OUR JOBS BACK HOME

One of the best measures of an economy is one's quality of life. So if one is currently in a 3-bedroom 2,000ft^2 house and the next day they are thown out and manage to grab a 2-bedroom 900ft^2 apartment, has their quality of life gone up or has it gone down? It has gone down. Therefore, the economy is worse.

If foreclosures were good for the economy, then we should all volunteer to abandon our homes and start camping out in the woods as bums. By your logic that would be a sign of fantastic wealth. But no you're wrong! Rampant foreclosures are NOT a part of a healthy economy.

Perhaps my sarcasm and cynicism didn't come quite as far through as I'd hoped. Record foreclosure rates are of course bad. I do agree with GBM in that no longer paying the mortgage and spending it is and has given the appearence of a stronger than really is consumer. GBM being who he is will of course find the brightside to such a situation. The MSM of course does this as well and you only have to watch any financial news network of 24HR opinion news network to see a less reasoned example than GBM's.

He has a more sublime point embedded in this thread than maybe he is even aware of. There is no dispute that there is a HUGE shadow inventory of REOs (real estated owned by banks i.e. already foreclosed) out there. I've seen countless stories of people still in their houses after Notice of Defaults waiting on the Sheriff or new owner to show up and the foreclosure to complete and waiting and waiting and it just not coming for an extremely long amount of time. 6-9 months longer than it should take in many cases and even longer in some. Lots and lots of that going on right now.

Only a Realtard would think that there is any hope of a housing recovery anytime soon until this shadow inventory is cleared.

There are a couple of really good threads on housing around ATS and I encourage anyone to look them up.

reply to post by truthquest


Did I say healthy economy? I said this will continue our bull rally.