Quote:
Originally Posted by Rocky_Shorz
so the 700B can go as high as 11.3T
I have experience in Short Sales lately and know that homes are selling for as little as 35% of what they sold for in 2005-6.
It isn't even the original loans that are in trouble, it is the Home Equity Lines of Credit that are causing the biggest problem.
Many of the original loans are being covered in the sale, but there are HLOCs on many homes as big as the original mortgage.
To Keep people from Foreclosure, with this new bill, they can just stop paying on the 2nd and let the Government pick it up...
The positive side is the Treasury is taking over all of these homes, not the Fed Reserve. What will happen is the market will stop sinking and will turn around much quicker.
I can see the possibility of these 2-3 million foreclosures turning into assets within 1.5-2 yeas.
If the market continued into the free fall it is experiencing, it would reach a point where foreigners could by homes here for several months income.
This step is going to help keep America, owned by America...
but 11.3T... wow...
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I must respectfully disagree, Rocky.
First, there is no limit on how high the spending can go, the $700 billion can only carried at ONE TIME, so the Treasury Secretary will be free to fill up that $700 billion "bucket" as often as he wishes.
Second, the difference between the Treasury and the Fed holding the paper is irrelevant, since the Treasury will borrow the money from the Fed to be paid back by the American people, plus interest. The inflationary pressure of AT LEAST 1 trillion, most likely much more, on a defecit spending economy with a total GDP of around 14 trillion will be enourmous.
Third, bad paper is bad paper, switching ownership doesn't alter that fact, your timeline of 1 to 2 years would therefore be valid with a free market handling of the issue, and in my opinion more so.
Fourth, the market was falling because it NEEDED to, it was overvalued, and nothing can ever stop a worthless asset from being valued as exactly that.
Fifth, a huge percentage of our debt IS being carried by foreigners. The buying of our national assets by foreign nations has been in full swing for years now.
This is an open door to fascism, especially when combined with the Patriot Act and subsequent legislation. Thomas Jefferson would need to be hospitalized for uncontrolled vomiting if we to wake today. There is nothing positive for the American people here, unless you consider an even bigger economic crash, which always and inevitably results from these machinations to stop one, and the further devaluing of their currency, and the increase in the already unfathomable mountain of debt heaped upon their already overtaxed backs.
Z