February 14, 2008

Eventually, the government will have to buy up the houses that nobody wants now that the biggest credit bubble in human history has burst


You will see a new government agency created next year that will go out and buy up all the houses. Trillions worth of unwanted houses. They'll put 'em on the books of the ol' USA, maybe even rent them out for a bit, and eventually they'll resell 'em for whatever they can get.

Call it a Super-RTC. And when the government is selling distressed houses and the banks aren't lending, THAT'S when you want to have buckets of cash ready to buy.

This article takes it even farther, and says that in order to avoid a Depression and deflation, the government will also have to buy stocks and commodities. I disagree, the government will not buy stocks, as Bernanke will do a fine job pumping that new bubble. But they will buy houses, mark my words, they will buy the houses.

So sit back, grab some popcorn, and get ready to hunker down for years. We're just getting started. As the government is now admitting, the worst is yet to come.

Depression risk might force U.S. to buy assets

NEW YORK (Reuters) - Fear that a hobbled banking sector may set off another Great Depression could force the U.S. government and Federal Reserve to take the unprecedented step of buying a broad range of assets, including stocks, according to one of the most bearish market analysts.

"Avoiding a depression is, unfortunately, going to have to involve either a large, quasi-permanent increase in the budget deficit -- preferably tax cuts -- or restoring overvaluation of equity prices," Connolly said on Monday.

22 comments:

Anonymous said...

Can I get a free pony?

Frank@Scottsdale-Sucks.com said...

There won't be any money left for that after the $210 BILLION welfare expansion Obama has announced.

Anonymous said...

Orange County's (CA) first luxury high-rise tower project now has its first foreclosure.

http://www.ocregister.com/money/foreclosures-hahn-percent-1978983-sales-months

Anonymous said...

Stupid Chandler Elevation project now in foreclosure

Chandler high-rise now faces sale again

Elevation Chandler, the abandoned high-rise shell just south of Chandler Fashion Center, once again is in foreclosure and on the auction block.

A trustee sale is scheduled for April 14 - two years after construction on the project stopped. A trustee sale indicates a loan is in default, and the property is sold to the highest bidder. Proceeds go to the lender.

http://www.azcentral.com/arizonarepublic/business/articles/0210biz-cr-elevation0211.html

Anonymous said...

Orange County CA defaults & foreclosures reach record highs

http://mortgage.freedomblogging.com/2008/02/13/defaults-foreclosures-reached-record-highs-in-january/

Cow_tipping said...

Does anyone remember how the Briiliant Idea the Dutch Government had, buying the Tulip contracts for 10% of contract face value ended ??
Anyone ???
George ?? Dick ?? Henry ?? Alan ?? Bill ??
Anyone ???
Cool.
Cow_tipping.

Anonymous said...

The U.S. government has been buying equities "off the books" since 1987 using intermediaries in the big houses and money center banks. Ever hear of the PPT?

I guess now they want to make it legal for the PPT to operate in the open. It's an appropriate step on the way to full nationalization of critical industries and infrastructure.

SHTF time.

Back in OC in 2012 said...

Uncle Sam buys houses, turns them into projects, value continues to decline, welfare folk get thrown out, builders acquire property at $0.05 on the dollar (or less) and sells to new generation of home-debtors for over 1000% ROI.

Anonymous said...

Those houses will go to HUD and they will be given to families from the ghettos and trailer parks. It is already happening now, but will be widespread in the coming years. I just saw a news report about a welfare queen with 11 children living in a brand new $400,000 house in an upscale neighborhood. She can barely speak English and doesn't work. The fathers of those children are nowhere to be found. The children run around in the streets all day like animals. One of them was hit by a car and that's the media did the story. So you paid $800,000 to live in a nice neighborhood away from the ghetto, but the Feds will be bringing the ghetto to you. Get ready to hit the matresses when the drive-by's start on Wisteria Lane.

Anonymous said...

Keith said...

"Eventually, the government will have to buy up the houses that nobody wants now that the biggest credit bubble in human history has burst"

Reuters said...

Banks to ask government to take bad loan risk: report
Thursday February 14, 7:31 am ET

NEW YORK (Reuters) - The banking industry is proposing to members of the U.S. Congress and the White House that some of the risk of troubled mortgages should be shifted to the federal government, according to a report in the Wall Street Journal on Thursday.

One proposal has been advanced by officials at Credit Suisse Group (VTX:CSGN.VX - News) and would let the U.S. Federal Housing Administration guarantee mortgage refinancings by some delinquent borrowers, said the report.

The Credit Suisse plan would open the way for nearly 600,000 sub prime borrowers, many of whom are delinquent on their mortgages, to refinance into loans backed by the FHA, said the Journal, which cited a Credit Suisse spokeswoman.

The Journal said officials from JPMorgan Chase & Co. (NYSE:JPM - News) are also pulling together their own proposal to expand the number of homeowners who could refinance into FHA-backed loans.

http://tinyurl.com/2hhzbq

Eventually?

Anonymous said...

What are you guys smoking? Why would a private bank ( The Federal Reserve) buy houses? to save who , you! It will never happen, the stockholders of the FED want to make money not lose !

Anonymous said...

What is the downside/upside of depression/deflation verses inflation. Why keep inflating things?

Anonymous said...

Beatriz Bustos has been trying to sell her Brickell condo for about a year.

She has found a few prospects and has gotten close to sealing a deal several times but all the potential buyers ran into the same obstacle — they couldn’t get financing.

“No one qualifies for financing,” said Bustos, who is facing foreclosure.

But the problem isn’t the buyers, it’s the building — the Vue at Brickell.

What Bustos didn’t realize is that her building has been blacklisted by lenders as have dozens of other condos in South Florida. Banks and mortgage lenders compile lists of buildings they find too risky for lending, and they refuse to finance purchases there.

And that further complicates the obstacles faced by owners of condo units in these buildings.

Bustos bought the condo for $690,000 as an investment in 2005 and now can’t afford the monthly expenses of nearly $5,000 that include two mortgages and association fees.

It’s already tough to find buyers in the current market. And this drastically limits options. Bustos and other condo owners like her can’t refinance, can’t sell and unless they find a cash buyer are likely headed to foreclosure.

The Vue at Brickell is one of dozens of condos across South Florida on lists maintained by lenders of buildings where they refuse to finance mortgages.

In the Vue’s case, the “high foreclosure rate and declining value” in the building is cited by BankUnited as the main reasons the property should be shunned.

The Vue is also on a list maintained by Popular Mortgage, but brokers say the project is widely avoided in the lending industry.

But the Vue is far from being alone.


http://tinyurl.com/3x6bqd

Peter T said...

Keith, what do you mean by "have to buy"? Wasn't the RTC made up out of houses out of liquidations? That will happen again, of course, to give the creditors 5 cents on their formar dollar, but I can't see how the government would BUY houses. Anyway, your recommendation to buy out of the super-RTC seems to be spot-on for me.

Anonymous said...

Anonymous said...
Those houses will go to HUD and they will be given to families from the ghettos and trailer parks. It is already happening now, but will be widespread in the coming years. I just saw a news report about a welfare queen with 11 children living in a brand new $400,000 house in an upscale neighborhood. She can barely speak English and doesn't work. The fathers of those children are nowhere to be found. The children run around in the streets all day like animals. One of them was hit by a car and that's the media did the story. So you paid $800,000 to live in a nice neighborhood away from the ghetto, but the Feds will be bringing the ghetto to you. Get ready to hit the matresses when the drive-by's start on Wisteria Lane.

February 14, 2008 4:10 PM



OBAMA FOR PRESIDENT!!!! He will "change" some shit fo sho. Bitches!!!

Anonymous said...

"That nobody wants" - hey, people want. Just not at these impossible, inflated by 150% or more prices.

Not everyone is a FB - some people just have to give up dreams of avarice, forget making a $100,000 killing on your house - after all, one house is an awful lot like the next - and move on.

WINGS said...

What I like is when underqualified and overfed people of no morals get in over their heads trying to live in luxury.

They get the big luxury cars (on lease or with a home equity loan, they take large vacations, they buy huge homes or luxury condos and then they collapse in debt.

The worst part about it is that these same people believe they are entitled to all of the fancy goodies.

They'll go to a bank and throw a tantrum like a big baby that their toys have been repossessed.

They run credit cards up and then walk away and tell the lender to get screwed.

I like it when these people feel the pain of consequences to their actions.

They are the scoundrels of every city they litter with their presence.

Let 'em eat cake!

Anonymous said...

Real estate prices won't decline by a catastrophic amount like you HP'ers want and believe. No, if prices continue to decline, then the government will buy them up and then appreciation will continue. If the stock market tanks, then the government will buy up stocks. No need to worry my fellow Americans.

who_cares? said...

Anyone else starting to think "never again" on buying a house?

Cow_tipping said...

who_cares? said...
Anyone else starting to think "never again" on buying a house?

February 15, 2008 12:31 PM

If govt gets involved to the extent of buying housing stock and turning into a tulip bubble, I am stopping making payments on my house. Even though I owe 110K on a 150K puechase price house, I am walking away. No sense paying 110K when the govt has to sell them at 5.
Cool.
Cow_tipping.

Anonymous said...

Here's an idea, buy a piece of property in an emerging middle class society, not America.

What's happened is that RE has sucked the last remaining breath out of a formerly wealthy society and has transferred it to the parasites of Wall Street but this time, there's no second wind.

It's all downhill from here and if one can't protect the place they own from both depreciation and looters then it's best to take your savings elsewhere.

Anonymous said...

Here is a quick question: where exactly would the United States get the money to buy the homes and other "assets"? The last time I checked, the United States had a massive deficit and billions were being poured into a war overseas with no end in sight.