She doesn’t need a house. She needs a sugar daddy.

Yup, that’s it in a nutshell. We don’t know all the details of how it would work out, but we do know who holds all the cards… at least those that count.

In all seriousness, I’m watching Califonia for clues. Same issues, same choices, smaller scale. We’ll see.

Now, my wife and I are thanking our lucky stars we didn’t buy and our friends who jumped in are seriously regretting it…

This is actually an interesting idea.

I can think of two markets that Foreign purchasers have caused the desired effect…..

If you have been to Vancouver Canada shopping for housing you find an “international” melting pot. Go out on the town and talk to a local. They will tell you how Foreigners have driven up housing prices.

Hong Kong is another market where wealthy Foreigners have driven up prices.

Maybe the idea would be most effective if aggressively targeted to specific metropolitan areas.

When I was just out of school, I was working on a loan work out for a developer who was in default on a huge acquisition and development loan. The partner I was working with asked me what I thought we should request from the bank. I said we couldn’t ask for much because we didn’t have any bargaining power. He laughed and said there’s an old saying in the lending business: If you owe the bank a million dollars, the bank owns you. If you owe the bank a hundred million dollars you own the bank.

I wonder if the Chinese envision their bonds being converted to an equity interest in the Uncle Sam work out plan. Who knows, by then the US government might own quite a portfolio of former world class companies.

But beyond that you had the refinance appraisals that were high, and banks making loans knowing the person couldn’t meet their living expenses because that was the very reason for the loan. The banks were basically playing a game of musical chairs, but substituting someone else in as soon as the music started.

All true, and real considerations, but don’t forget who’s number 1. Default would be limited, we set the terms, then we move forward, hopefully with a sustainable model that the world approves of. But hey, bottom line, we can do what we want- our military budget is greater than the rest of the world combined or some such number…

According to the parcel records, Ms. McCormic and her significant other still own the house she was talking about in her article, which they purchased for $315,000 in June 2004. Prices around Seattle haven’t quite rewound to 2004 yet, so she’s probably even got some of her precious “all-important soaring equity.”

But wait… what does a records search for deeds of trust on the parcel show?

06/09/2004 – Homestreet Bank (original mortgage)
07/14/2005 – JP Morgan Chase
02/22/2006 – Golf Savings Bank
06/24/2008 – US Bank

Nice. Three refinances in four years. Since King County’s deeds of trust aren’t online, no way to know for sure if any of them were cash-out, but I bet we can make an educated guess…

Oh, and it looks like McCormic & SO also went ahead and upgraded in October 2007, buying another Ballard charmer just a few blocks away for $400,000… which they subsequently also refinanced on 12/15/2008.

Yikes.

Single mom Callie Travis wants her own home dearly, a haven to make memories with daughter Ellie, 5.

“I feel like I’ve come a long way, and that would be the next logical step for me,” she said.

Can she swing it?

The Kitsap Sun matched up Travis with Certified Financial Planner Brant Greene of Ameriprise Financial Services of Poulsbo to determine whether her financial condition would allow it.
…
Since she’s worked for the school district, Travis has rented a daylight basement of a Port Orchard home. The $1,000 monthly rent makes her feel like she’s paying off someone else’s mortgage when she could be working on her own.

“I don’t feel good about it, about renting in general,” she said.

I got to that part and though “Oh man, another one of those articles…” But I was pleasantly surprised with where it went from there…

When Travis met with Greene, she got some tough news.

“While this may not be what you want to hear, the reality is that you aren’t in a strong place financially to take on homeownership,” he stated.

He pointed out that Travis’ monthly expenses now are $300 more than she makes. With a home, they would jump to $600, maybe more.

“I was in a little bit of a funk for a while. I know that he’s right,” Travis said of Greene’s observations.

Greene instead liked the idea of Travis moving in with her parents to save money. He suggested aiming for $10,000 savings, even though it might take a couple years.

And he suggested not putting it toward a house, but paying off the student loan and tending to other immediate expenses.

Nice. Some sound financial advice in a newspaper for once. Maybe the bursting of this bubble is finally starting to break the “homeownership über alles” mentality of the last decade or so…

These economic discussions always skirt the business aspects of government. How about we let the oldest civilizations in the world, Iraq and Iran settle thier own differences? That’s a few billion. How about the United States government ends the drug interdiction programs around the world and legalizes, taxes, and controls drug use within it’s borders? Another couple of billion. How about an end to export subsidies, farm subsidies, or coporate tax shelters? Another couple of billion.

More to the point, the United States government has no obligation to prop up banking, insurance, auto, or oil industries.

The federal government spent $92 billion in direct and indirect subsidies to businesses and private- sector corporate entities — expenditures commonly referred to as “corporate welfare” — in fiscal year 2006. The definition of business subsidies used in this report is broader than that used by the Department of Commerce’s Bureau of Economic Analysis, which recently put the costs of direct business subsidies at $57 billion in 2005.

If we take the United States government out of the corporate equation the dollar will devalue all on it’s own and there is nothing any one can say about it.

I wouldn’t be surprised if 20-30% of sales currently closing around Seattle are short sales. Where is your data that shows “well under 5%”?

I’d add that we often check out listings to see if they’re likely short sales, and on the new listings the agents have been really pretty good at specifying. I’ve only found one what was questionable, and when I looked into it, it wasn’t a short sale, but it was an undisclosed court order required.

Zillow has no way of knowing what properties are short sales because they can’t determine balances owing, especially on HELOCs. I would note though, that if the owner can pay the difference, rather than asking the bank to release without payment, that wouldn’t be a short sale under the NWMLS rules.

I agree jon. But I was thinking more of US citizens when I referenced the right to sue. I don’t even know if the Federal government has the right to file a bankruptcy. Would congress enact legislation authorizing the default and perhaps setting forth terms for a pre-packaged bankruptcy? Would this constitute a taking without due process of law in violation of the constitution? If US holders of the government securities can sue, can they execute on assets of the federal government to collect? What a mess.

I’m not necessarily advocating monetization David, but there are a number of potential benefits over defaulting on our obligations. First, it allows you to pay back debt without raising taxes and without defaulting. Would you prefer to pay more taxes to pay back the debt? If you prefer to default, remind me never to do business with you again. And if I do business with you again, be advised that I will make sure I get a pound of flesh from you first. If the world considers us the ugly Americans now, wait until we default. How long do you think it will take for a country that we don’t pay to nationalize the assets of an American corporation as a means of collection. And how many people will suffer because we refused to pay them back the money we borrowed. If our default causes economic collapse in foreign lands and children starve, there may be those who seek revenge. And how do you tell your children about honor and character when your actions reflect that you and your country lack both.

There are a lot of affects of monetization and some of them would be painful. Monetization will likely cause the dollar to devalue almost immediately. When Bernanke anounce that he would buy 300 billion of treasuries, the currency markets dropped the value of the dollar about 2 percent within minutes. Monetization will make every imported item more expensive very quickly. American’s standard of living will decrease. It will also probably make US exports less expensive. As you import less and export more, there is the potential that over time we will begin to increase domestic production of goods and employ more people in America.

Do I think monetization is a good thing? Of course not. But when you ask the bleeding man to sign the consent to amputate, the real question is whether it’s better than the other available alternatives.

The pledge of the full faith and credit of the US means they would freeze all foreign held assets of the US government, and perhaps even US corporations and citizens. It is safe to say the US would rather print up extra greenbacks than let that happen.

Default is also potentially a slow process and probably an extremely risk filled process. Does it really provide a fresh start or does it result in geo-political outrage and revenge. If we default on certain Treasury obligations coming due, what happens. Do the holders have a right to sue? Do they get a devalued offer of say 50 cents on the dollar? What happens to all other outstanding government debt? The market will take action, but does the government say they will only pay 50 cents on the dollar when other outstanding issues become due, or is there a possibliity that others will get paid in full. I’m certainly not sure your wrong, but I think default on the scale of the world reserve currency is also full of unknowns.

This is a small parcel of dirt.

You’re referring to the Clise Property.

Well if you read this article, you’d think that 30-40% of the sales closing are short sales, when really it’s well under 5%.

According to ZIllow’s latest quarterly report, 12.3% of transactions in the 12-month period from 2008-Q2 through 2009-Q1 were short sales. That’s hardly “well under 5%,” and I’ll bet that the quarter-by-quarter number probably began at something like 5% and ended near 20%.

I wouldn’t be surprised if 20-30% of sales currently closing around Seattle are short sales. Where is your data that shows “well under 5%”?

http://seattletimes.nwsource.com/html/businesstechnology/2009306936_stewartminor06.html

… “Owner wants this property sold fast … ” the listing flier says.’ …

Love it!

What will give? What will give first?

That’s easy, the consumer will cave in.

Probably, like in my earlier example of the $500 Plasma TV it should be our Financial Institutions, but it won’t be. The consumer will once again take full responsibility for bad business models and simply pay until there is nothing left.

The ones who don’t owe anything, they are saving money, in banks.

We all feed corrupt business practices and are loving it.

We all love seeing people drink champagne by the pool, doing nothing all day but moving money around by using a computer. We all want to contribute to big yachts, expensive dinners, and business meetings in exotic locations.

Of course we blame our government if they do too much to protect us, or not enough. We just want to see that there are people in the world that are so wealthy they can afford too climb in a helicopter and get to the vineyard for the week end. Those are the important things in our lives.

Our government needs to start making us happy. Our government needs to stop taking our tax dollars and giving them to the very wealthy so that they can rob us more easily.

Corruption implies a reward. I’m not feeling a lot of government corruption. I think middle man, bag man, when I think politician.

As my bag man I think the money needs to start flowing the other direction. Corporations who have made billions, if not trillions of dollars these last ten years need to start making some contributions to my life style. They have my money and I want it. I think my government should start getting my money together, for me, and all the other consumers, or savers.

Alrighty then, let’s take the convoluted argument that we will print our way out of this mess. It does nothing. We are still stuck with, according to the Scotsman and Tim’s chart, with tons of debt across the board. Government default is an issue so far down the line it’s inconsequential.

The real problem is that so many people have so much money that they can just walk away.

Like a person who borrows $600K on a $300K house. What if they just walk away? An American Corporation, like Microsoft, with billions of dollars, just stops paying debt and, again just walks away to India. Their money is already in, where? Ireland? What if they just walk?

If we are a consumer driven economy we as consumers will buy whatever we want. We then buy from some place else. We don’t need, let me say this again, need, to buy from one provider. Our government on the other hand has nowhere to go.

Our government created this mess by lack of regulation. The Financial Institutions we all seem so concerned about are nothing but thugs. Our banking system used the American Dream of home ownership to rob millions of people. Our government allowed it and helped promote the idea.

Monetization will do nothing to solve a consumer driven economy. The consumer, at this point, is going to need to be made whole. The banks refuse to cut any slack and our government helped them. What do consumers get? Are we really supposed to work harder and longer for a monetization scheme? I vote no.

My biggest disagreement is that I don’t think monetization is seen only by financial markets. It’s probably not a one time occurrence, but an ongoing strategy. And once recognized as such, all markets begin to build in expectations to counter the loss of value it brings about. Interest rates rise, prices rise, living standards fall, markets remain distorted and inefficient. Default, on the other hand, is a quick surprise, a one time occurrence that lets reality and new sustainable policies be put into play. That is, assuming government learns it’s lesson. Cautious markets in the wake of default will help set limits.

Is deflation inevitable? Probably. It should be. But the system is so corrupted by political considerations, favoritism, general government interference and such that it may be put off for a long time. But like the dot-com bubble, reality wins in the end. Too much of what the government is trying to prop up or ease into decline is unsustainable and will fail. The real question is what will it take with it? How much of the “scaffolding” holding up the decrepit bridge will get caught up in the fall?

First let’s address the household debt verses savings. The idea that consumer confidence or spending is key to fiscal stability is like claiming housing starts are. We have heard the same tired diversionary rhetoric for decades now. My god look over there! Don’t look behind the curtain, it is all about you as the consumer, you are the engine driving the economy. Nonsense.

I did buy a plasma TV for my daughter, it was $500. It’s a piece of junk that would probably cost with shipping and handling $120 if we lived in reality. OK I pay the $500, but a lot of people along the way split up the extra, and I mean extra, $380.

Some of that money goes to the government, but most is ivested in business modeling. We get nothing for this money, but to over pay for goods that are worthless.

The concern is the Financial debt. That would indicate that some how, and I can see it now, money is going in to lending and not getting lent. It’s like parking money in cash reserves.

So Financial Institutions are getting more and more money that they don’t seem to be able to get rid of fast enough. All that corporate and government debt, if following the same logic, could be contrived. I think it is.

One Eyed man made a comment about a California Developer saying a dollar borrowed is a dollar earned, which is true. In a global economy I could borrow a million dollars and invest it in South America for a 14% return. I borrowed at 8%. The debt is making money and is then diverted to the Camen Islands.

If I get tired I default on my United States debt and retire.

Let’s pretend that United States corporations could do business outside of the United States and actually export this business model of draining the consumer’s money. I would say dollars but we have the Euro now to play with.

I’ll say it again. Business is War. We are winning the economic war at the expense of the entire world’s resources. At some point we will have to get on with the important business of feeding a massive amount of people and caring for the resources we have globally.

RE: jon @ 29 –

The potential for governmental default is real- they can’t legally just “print” up fresh dollars not backed by debt. If they did, the political system would soon fail, and then the currency. That would be worse than default. The vast majority of pundits believe our government would rather default and start fresh than completely debase the currency.

While I agree that Fed action to monetize government debt doesn’t immediately translate into increased wages and a consequent increase in the ability of Americans to repay private debt and demand more consumer goods, I don’t follow how default on Federal debt is preferable to monetization. Monetization clearly has consequences but it is generally understood only by the financial markets, governments and a certain limited portion of the general population. I don’t think monetization carries the stigma and message of economic catastrophe to the American public that is conveyed in the words Federal government DEFAULTS.

Default means millions of federal workers and holders of federal debt suddenly live in fear they might not get paid at all. Monetization means they will get paid in “legal tender,” all be it a debased legal tender with less purchasing power.

Monetization probably doesn’t create wage inflation until well down the business cycle, but it does likely result in an inflationary economic environment eventually promoting investment in income producing inflation hedges like plant , equipment, employees and real estate. Monetization will also likely result in a substantial increase in interest rates and the Fed and the Treasury appear to be trying to slow increasing rates while the real estate sector and the financial system slowly heal.

The only advantage I see to a re-set to economic equilibriums through deflation is that we are probably already in a deflationary spiral so any such re-set will likely happen faster. But the destructive economic effects of a deflationary spiral are IMHO far worse than those of inflation as deflation promotes hoarding cash over investment in income producing assets. The only sustained deflationary period in modern American history was the GD. The greater threat to the political stability lies in deflation and the consequent unemployment it brings. The hungry and unemployed take to the streets when they preceive their institutions have failed them.

Both monetization and default will hasten the replacement of the dollar as the world reserve currency and the loss of advantage that this has provided to the United States in the world economy. But I still don’t see how telling the world I’m going to give you a “debased” dollar in exchange for my promise to pay is better than giving them no dollar at all. Those who are long the dollar benefit from deflation and might prefer default on the debt, but I don’t see how it’s good for anyone else, especially if we enter a sustained deflationary spiral.

Even assuming that to some extent you agree with what I’ve said above, am I correct in my conclusion that you believe it is to a large degree irrelevant because we are going to get deflation whether we want it or not so we might as well accept it and get the “re-set” of economic equilibrium it will cause, over with? That is to say, monetization is just peeing in Green Lake. I also assume from many of your prior comments that once fundamentally reasonable economic equilibriums are reached, breaking any deflationary spiral is important, should probably occur thru market forces (although there may be an overshoot on the downside first), and may well be hastened by realistic economic stimulus.

There are so many reasons for inflation, but devaluing the dollar is the most likely today.

A dollar that’s worth less: Exports become cheaper, while imports become more expensive. All else being equal, gasoline prices go up. So do other commodities — meaning that we’d likely resume the upward pay-more-for-food and pay-more-at-the-pump trend that was evident about a year ago.

A stock market and bond market crash: If investors start to view inflation and a devalued dollar as inevitable, it could result in a broad sell-off of stocks and bonds, and a flight of capital to other assets and currencies. (Swiss francs might become more attractive.) Inflation expectations are important.

U.S. banks have an enormous amount of excess reserves, according to Federal Reserve data, that would rapidly expand the money supply once lent out. “The enormous increase in reserves is potentially inflationary,” Stanford economics professor John Taylor told the U.S. Congress in February. “With the economy in a weak state and commodity and many other prices falling, inflation is not now a problem, but at some time the Federal Reserve will have to remove these reserves or we will have a large increase in inflation.”

I bring it up because it relates to an issue I was discussing here somewhere, about how many people who can make their payments simply walk away. Well if you read this article, you’d think that 30-40% of the sales closing are short sales, when really it’s well under 5%. But it’s in a major newspaper, so people will read it and think it’s true (except perhaps people here who are more familiar with the problems of short sales).

Jon, you’re hard for me to follow, but I think what you’re talking about is monetizing the debt- just throwing new dollars at old debts to pay them off. It isn’t going to happen- it destroys the value of the dollar, is highly inflationary,and politically destabilizing. You need to look at more than just the Fed’s relationship with its member banks- look at its relationship with the treasury and the bond markets. There are many more controls in place than what your analysis suggests.

Given the above, the risk in bonds is not just interest compensating value changes, but true default. There are lots of historical precedents, and the risk is real. In fact, traditional theory would argue there’s a risk premium in those interest rates. Interest rates that seem to be rising.

Deflation is all around you. Mortgage interest rates just bumped up a bit last week, and as a result billions of dollars of home owner equity disappeared. It may not have shown up in your check book yet, but it’s real, and people feel it. Unemployment is up too. Wages paid to those still employed are being reduced in many cases. As a result, many asset prices are down. Have you gone shopping for any large ticket items recently? You lay it all off on falling demand. How do you think deflation will manifest itself? What is deflation? How about fewer dollars chasing the same or more goods. That would be supply exceeding demand. HMMM? Sure sounds like you just made my point.

From the Federal Reserve Act (http://www.federalreserve.gov/aboutthefed/section16.htm)

“Federal reserve notes, to be issued at the discretion of the Board of Governors of the Federal Reserve System for the purpose of making advances to Federal reserve banks through the Federal reserve agents as hereinafter set forth and for no other purpose, are hereby authorized.”

The section after that explains how those notes get into circulation. Banks exchange debt for to get the reserve notes. So the debt actually flows from the banks to the Fed, not the other way around. There is nothing backing the Fed reserve. It is simply as it says, “at the discretion of the Board of Governors.” The Fed has no obligation give you anything in exchange for its reserve, other than to give you printed money or coins.

“Their value changes every day, moving in an inverse relationship with interest rates.”

Exactly, because the bonds are payable in cash at a future time. The risk is only because of interest fluctuations, not default risk.

“As I’ve stated before, the current “printing binge’ is the equivalent of peeing in Green Lake and expecting to see the water level rise.”

If you say that the printing is not enough to offset the credit contraction, then where is the deflation that should be occurring? Stocks have gone down because profits are down. House prices are down because of oversupply. Wages to unemployed people are down because there are so many. None of those are deflation. Other than than those, prices are stable.

Tim- thanks for fixing my post! I had to catch a birthday party and ran out of time.

I think the financial debt certainly catches our eye, and the GSE is also new. But what hurts is the consumer debt load. In our modern FIRE (finance, insurance, real estate) economy there’s less emphasis on capital intensive production related debt (which is, importantly, often self liquidating) and much more reliance on consumer consumption. With consumer spending representing 71% of the total economy any reduction in individual spending hits hard. And as recent events and the chart show, the consumer is tapped out, barely able to service the existing debt and unwilling continue expanding debt financed purchases. How many boats, cars, vacations, and misc. trivia were purchased with HELOC money? And how much of that money is available now? Worse, the money is gone, but the debt remains. So now the consumer is in effect purchasing interest on past consumption.

Ironically, savings are up which is good for the future, but cuts into current consumption, which we need. Remember, it consumer savings jump from zero to 10% of income, GNP has to drop almost 7%. Some days you can’t win.

Jon- there are so many errors and assumptions in your statements I don’t know where to start, except to respectfully suggest that you do a bit more reading, or read more closely. You’ve got a great start on understanding, but there are some major holes to fill in.

The potential for governmental default is real- they can’t legally just “print” up fresh dollars not backed by debt. If they did, the political system would soon fail, and then the currency. That would be worse than default. The vast majority of pundits believe our government would rather default and start fresh than completely debase the currency.

Bonds are not “as secure as cash”. Their value changes every day, moving in an inverse relationship with interest rates. The longer the term, the more sensitive the values are. You can lose significant amounts of money in bonds, long term or short term, trust me.

To suggest production cuts can be inflationary is a hot new topic but the concept doesn’t hold up to scrutiny, as production cuts go hand in hand with lower employment and a host of other deflationary effects, such as credit contraction and reductions in consumer consumption. You can’t just cherry pick part of the money flow and call it the whole reality. I’m really surprised this idea has gotten as much traction as it has.

Regarding printing and inflation, one needs to take a hard look at what “currency” really is in our modern society, and be sure to check the size of the new money inflows against the size of the ongoing economy. As I’ve stated before, the current “printing binge’ is the equivalent of peeing in Green Lake and expecting to see the water level rise. It’s not going to happen. The lake bottom absorbs faster than you can pee.

The thing that surprises me is the financial debt.

Financial have short term debt. They are the man in the middle. Then they sell debt.

Corporate debt remaining stable while government and government sponsored enterprise picks up the slack seems pretty normal, but financial are a stand alone.

Let’s say that corporations start paying their fair share of taxes and stop feeding off the government teat. That would solve a lot of debt issues.

The problem is financial. They have no means of support. They build nothing and create nothing. To me that looks like the problem.

What am I missing?

Yeah but the 500K only applies in the high unemployment areas. If you don’t want to be in a bad neighborhood, they want you to double down for a mil. I’m curious how long the programs been around and how much investment it brings in. One site I looked at said it hasn’t been very successful but they didn’t give any stats.

That’s interesting to see a site where someones trying to attract investment thru the program. Thanks!

When the government borrows money, it briefly diverts borrowing from the private sector. However, the government quickly spends the money and so puts it right back into circulation. Because the government bonds can always be paid back with newly printed money, there is no default risk. As such, the bonds are secure as cash, and can be used as reserves. As a result, government borrowing does not divert money from the private sector. Rather, it injects money into the private sector.

The black hole occurs when it is time to pay back the government debt. Unless the money was spent on improving productivity, paying off the debt is like having a really bad hangover. That hangover will no doubt be treated by the hair of the dog that bit you, by having the government go further into debt and thus injecting more spending into the economy. With so many people living off of the excess government spending, less production occurs and inflation results. There is no need for rising wages or oil price hikes for all this to happen.

It’s $500K and create ten permenant jobs inside the United States.

http://www.usasiapacific.com

RE: Kary L. Krismer @ 15 –
Krugman answered your question today with some graphs.

Wow, I didn’t know he read our open threads! ;-)

His answer though gets at part of what lead me to ask the question–or how I got to it. I’ve been saying for months that the government is not doing enough to help the non-mortgage credit markets. Based on his answer, we’re arguably making the matter worse, by diverting funds that would otherwise be private to public.

Based upon current farm reports and Scotsman’s economic forecast, it appears the only demand for my services will be harvesting the Grapes of Wrath.

Wow, that is really mis-leading. It’s not the rate of change that is a concern, it’s the total amount of indebtedness that has to be serviced or paid down.

I think this is a much more relevant illustration:

[image added by The Tim]

This inflation business is just kicking my butt. I thought people needed jobs and oil had to escalate considerably to see significant inflation. Does the above infer people will get jobs from these stimulus programs…and eventually chase too few goods with their dollars? I’m under the impression mentioned stimulus programs are simply black holes….how does inflation come from black holes? thanks

And just how high is the demand for old, one-eyed fruit pickers?

I can’t take credit for such a brilliant idea Ira. Our hard working government is already out there selling permanent residency to increase capital investment and save the economy. I guess now that we don’t manufacture anything and use more natural resources than we produce residency rights are about the only thing we’ve got left that anybody wants.

The current immigration program doesn’t allow you to get permanent residency by buying a house, but NAR should be able to fix that . But I doubt if they’ll be willing to expend their political capital to help a mere mortgage broker unless they contribute to the lobbying PAC.

The link to the Immigration program is listed below. I didn’t check to see how long the program has been around and a different site I went to said the program hadn’t been very successful.

It’s one thing to cherry pick the skilled and educated for admittance to the late great US of A, but now that we’re selling access rights like a country club membership I’m getting concerned that they might ask me too leave and only let me back for fruit picking season.

In the name of truth in advertising, I think I might have to make a trip to New York to modify the inscription on the Statue of Liberty. The inscription currently reads:

“Give me your tired, your poor,
Your huddled masses yearning to breathe free,
The wretched refuse of your teeming shore.
Send these, the homeless, tempest-tossed to me,
I lift my lamp beside the golden door!”

Just to make sure no one is mislead, I’m going to add:

“Provided you have a minimum of $1,000,000 to invest in a qualified business or hold a PHD in computer science or other similar field of technology. All others need not apply.”

I’m sure no one will mind if I correct the inaccuracy by adding a short addendum.

http://www.uscis.gov/portal/site/uscis/menuitem.5af9bb95919f35e66f614176543f6d1a/?vgnextoid=4ff96138f898d010VgnVCM10000048f3d6a1RCRD

http://www.foreignborn.com/visas_imm/immigrant_visas/6investment_immigration.htm

The car industry built higher profit SUVs rather than a practical car model and sold SUVs by promoting the “safety” of a big gas guzzling car.

Banks created bad loan products then approved higher and higher appraisal value in making bad loans. We may have been in the dark about the growing financial market crisis, but banks should have known better.

With the bad loan products and underwriting approving higher and higher appraised values of properties we had the National Association of Realtors and the Mortgage Brokers of America actively promoting higher prices.

In my opinion the consumer gets constantly blamed for buying into bad business models. The consumer never takes a stand against being sold a bad product, instead all we every hear about is “frivolous” law suits.

We, in America, are so used to just taking it, and paying, it seems normal.

Interest rate hikes for mortgages have to happen. It seems that now is a bad time for it, but hey, banks need to make more money, and we need to sell more mortgage backed securities.

It’s nothing personal, it’s just business.

My question is when the American people will just stop paying. Just stop paying for the nonsense business models. Stop paying credit cards. Stop paying mortgages. Stop paying for car loans and just pay $500 cash for a car to go from point A to point B.

You don’t need Costco carp, or Wal Mart patio furniture, we don’t really need to dress up every day. If you just chose to buy from business models that provided value where would we be today?

When the Fed buys the Treasuries new money is created. When they borrow normally, then people will sell stocks, real estate, etc. to buy the bonds, so that forces other prices down, but supposedly puts unemployed people to work. In reality, it probably takes employed people and incentivizes them to become or stay unemployed, or takes them away from productive work and makes them spend their time chasing bailout money.

Great plan, One Eyed, but I don’t know about the requirement for these folks to pay cash for houses. That’s pretty limiting. We don’t only want shacks in White Center and South Park sold. And you’re depriving a very needy industry out there, the poor loan originator, of sharing in this recovery. Perhaps amend the plan to require those folks participating in the Home Equity Immigration Act to borrow money from select lenders at select interest rates (20% 30%)…You seen any loan originators lately? You seen their cars? My God! I saw one driving a 2008(gasp) Mercedes!

Perhaps the flight to safety is getting some of the money out there that would otherwise just be stashed away somehow?