Now that the debt/housing bubble has burst and an epic collapse of the financial system is underway (whether people know it or not), what have you done already to prepare?
September 24, 2006
HousingPanic Stupid Question of the Day
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Ha!, Keith, even most readers of this fine blog are NOT prepared for what's coming.
So, in the interest of "continuing education" please allow me to offer a scenario of what might happen and how those who frequent here might protect themselves (as futile as they will discover such an endeavor to be).
First of all, as more and more homedebtors (my estimate: millions of these suckers are out there, trapped in ARMs and other suicide loans) stop making payments, the banks, MBS holders and other debt-enablers are gonna be looking to the private mortgage insurance companies (MGIC, Radian and others) to make good on their promises to pay up.
Of course, the mortgage insurers have sold WAY more insurance than they can possibly provide, so look for them to immediately default.
Next of course, is Fannie and Freddie themselves. They GUARANTEE about $2 trillion in MBS payments, but they only hold about fifty billion or so in cash and other instruments. So, look for Fannie and Freddie to default as well. (And let us not forget that Fan/Fred hold about $1.5 trillion in mortgages DIRECTLY in their portfolios as well, so they are even MORE exposed to deadbeat homedebtors.)
At this point, the banks, the MBS holders, Fannie, Freddie will be in deep trouble as the cash flow/income stream they have been dependent upon will come to a screeching halt.
In addition, all the holders MBS (about $6 trillion in total holdings, held by mutual funds, pension funds, foreign central banks, hedge funds), will also be decimated as they will have to mark down the "market value" of the MBS to reflect the reality that these promises to pay are now basically worthless.
As this collapse ripples through the financial system, look for derivatives meltdowns all over the place (about $300 trillion in interest-rate derivatives alone!) as the counterparties who promised to make good when interest rates spike up (as they inevitably will when everybody panics about lending "good money after bad" to create more worthless MBS to feed the housing debt monster!) also are wiped out.
Now, none of this will happen in a vacuum, although the entire process could play out in weeks (or hours as William Poole President of the Federal Reserve Bank of St. Louis stated in a speech regarding the systemic risk of Fannie and Freddie in a speech in 2003!). Indeed, look for the Federal Reserve to begin buying MBS outright and attempt to drop interest rates to ZERO (but these moves will be useless as the market will go on a "buyers strike" against MBS).
Of course, Congress will be sticking THEIR nose into the mess and will create an RTC II--The Sequel to TRY to create an orderly liquidation of the TEN MILLION or so houses that will be dumped back on the market. But who will buy? Look for the feds to get stuck with about $2 trillion in real estate, and all the other homedebtors with ANY KIND of mortgage to be "upside down" on their loans.
Now, with the banks (who sit on $3 trillion in mortgages directly AND $1 trillion in MBS), Fannie, Freddie, FHLB (about $4 trillion), private MBS issuers (another $1 trillion) , PMI providers (hundreds of billions), mutual funds, hedge funds, money market funds, pension funds (about $3 trillion ALL crippled, even the MOST clueless of sheeple will realize something is wrong and will TRY to get what few dollars they have out of the banks and money market funds.
However, the sheeps are gonna discover that the feds have been VERY busy preparing for just such an event and--through "Patriot Act, FinCen, Anti-Drug Laundering" and other sheeple-pen legislation--will prevent the sheeps from making a run on the corrupt fiat-fractional reserve lending-central banking scheme.
Therefore, the majority of the sheeps will be caught VERY flat-footed, buried in debt, but unable to have access to any liquid funds.
At this point the feds will either choose to inflate their way out of this mess by monetizing the $6 trillion or so owed to the MBS crowd or will choose to let the suckers die in a deflationary collapse--I'm not sure which they will choose, but I AM sure either scenario will be catastrophic.
Okay, now that we know what may happen, how do we prepare for the inevitable.
Well, one of the MOST important moves would be to have some cash, some physical gold, physical silver, food and guns/ammo out of the system.
The next important issue is to have a well-running car, full of gas.
Next up on the list is to live in a location where civil unrest is least likely (smaller towns, away from large concentrations of urban dwellers).
However, even THOSE precautions will mostly be for naught as the tens of millions of jealous, disgruntled, former "grasshoppers" will be screaming for the heads of the "ants" who had the foresight to try to prepare for the inevitable worst.
The best bet for the "ants" would be for them to form "ant colonies" sooner rather than later to combine their resources and protection.
Yet, even at that, the greatest threat will come from an increasingly-desperate government/police state which will not tolerate ANY competition to their monetary and military monopolies.
In summary: We are screwed. The least prepared will be wiped out first. Followed by the better prepared. However, EVERYONE suffers.
Credit Cards: no debt,
New Home; $715.00 month mort. payment, 30 year fixed. no HELOC, No ARM, No PMI, 60% LTV (bought short with 2% to buyer and sellers agents = 1% eash)
Car: Paid cash, 2007, 40 Miles per gallon,
Security: gated community with Guard, in case of riots,
Started a Developer Incentive business two weeks ago, figure I have a year to make money.
Assuming Social Security will not be there.
All you people sitting on "cash" had better get ready for the big surprise. Your pile-o-dough is just some digits in an electronic ledger, and guess who decides when and how much you can get back?
The banking regulations changed a couple of years ago, and depositors of all stripes are basically screwed. If they decide it's in their best interest, a financial institution can refuse to give you all of the money you have on deposit. They can take up to 25 days to close your account and even then, they can settle with a check. In a real crisis, you might have to go to a Federal Reserve bank to cash that check and get paper currency or coins.
LOL!
No mortgage, no debt. Bought a farm (private community type mini-farm, horses). A bit extreme, but tough times are coming.
I'm in my 40's. I sold all of our 401k's and cashed out of the stock markets in 05.
first poster - i insist you at least use a fake name - just hit "other" on choose an identity
beautiful post, but even I don't think it can be that bad
or can it.
Anon 6:03:10, one other item you could add. With all those FB's losing their homes, and banks failing, in that worst case scenario, the only homeowners left standing will see their property taxes skyrocket to support the system, i.e. the elected parasites and the special interest groups that pull their puppet strings. So there go their homes as well. Therefore the grasshoppers vs ants analogy makes a lot of sense. There are plus's and minus's to every survival scenario, only history (and our grandchildren) will know if we picked the right one!
"Security: gated community with Guard, in case of riots,"
I'm sure that $8/hr "guard" will have a lot of sympathy for the plight of your "gated community" if the SHTF. Angry young men in pick up trucks and bros in their "excalades" will pillage for their immediate needs, and the police and National Guard will be vastly outnumbered.
Bought a new home brand new in the desert valley for $183k, view lot all upgrades...cash with proceeds from San Diego Condo sale bought for $132k in niney six and sold in Jan ninety five for four fifty five k..put the rest ina c.d.
no debt..new house paid for and no more overe crowded freeways of san diego....and no Asian gangs!
Great post, Anon 6:03:10
But what did you mean saying: ....
"Yet, even at that, the greatest threat will come from an increasingly-desperate government/police state which will not tolerate ANY competition to their monetary and military monopolies."
Tell us about your vision of how government will act, please
remember that all bankers and lawmakers who create new policy to deal with the meltdown will have conflicts of interest as they're homedebtors too
same with media broadcasters - you can see/hear the fear in their voices as they challenge the housing bears, knowing in the backs of their heads that they're going to get crushed
someone predict for 2007 - 2010 what world currency will appreciate the most versus the dollar and state your case
my US$ are looking for a new home this week
Yea, well with 320 doors to choose from, inside a locked compound, I will be lost in the odds.
Also, it was kinda toung in cheek.
someone predict for 2007 - 2010 what world currency will appreciate the most versus the dollar and state your case
Good Question Kieth
I'm the first "anonymous" post on this thread.
To Keith: Yes, it could be that bad and worse. In fact, it is ALREADY way beyond control. The best evidence can be found in the derivatives dungeon, where all sorts of chicanery has been going on (and accelerating at a much greater pace over the last five years) as the banks, hedge funds, Fannie, Freddie, corporations, governmnets, NGOs', off-shore entities and other shysters have been shuffling debt, attempting to offload risk, hide losses, obfuscate money flows and other shenanigans.
However, the numbers are so huge at this juncture, even the slightest "butterfly wing-flap" can cause a financial Cat-5 hurricaine.
In addition, virtually the ENTIRE worldwide economic system is tied into the ABS/MBS/Securitization scheme which has to be one of the most ingenious and destructive inventions of humankind.
To the anon poster who inquired just what the gov't might do as they grow incresingly desperate, I offer a few nuggets:
1. "Capital controls" which can mean anything to freezing checking and savings accounts to prohibiting capital flight out of the country in ANY form.
2. Nationalization of Fannie/Freddie/FHLB and even as far a Coutrywide Financial (Which was recently added to the "old buys club" of federal securities dealers, allowing the Fed to directly buy Countrywide MBS. This was NO coincidence!)
3. Confiscation of all cash, gold, silver, guns, ammo, or other private property.
3. Confiscation or punitave tax on 401(k)/IRA accounts.
4. "Conversion" of CDs at banks to ten-year treasuries.
5. Restrictions on travel, gathering in groups, and freedom of speech.
I'll stop there for now. No need to ruin your Sunday afternoon...
Keith, try to use you imagination...
I would say that the best currency is local one, where you'll be live at that period. If you stay in UK, it's pound, in US it's US$.
Since the international money transactions will be limited to inter-government (gold backed)during the monetary collapse, nobody will be allowed any transaction abroad and currency exchage.
I bought NZD. I'd look at the CAD and CHF too.
At least 10% gold and silver is a good hedge. I bought a bit more than that.
NO DEBT is the KEY. You walk with debt into a depression and you're like a fat man trying to swim a mile with a bunch of non-swimmers trying pull you down.
I don't see it as cataclysmic as some of the other posters but it will be very bad. A severe recession for sure with millions of Americans suffering deep financial pain lasting for aq couple of years.
As someone noted, no debt is key along with cash and the ability to be mobile and adaptive to a lower standard of living.
Probably what this country needs and is overdue for.
Perhaps, I can get some of that cheap Hugo Chavez home heating oil this winter.....
Here's another one.
One of my co-workers described his loan to me. This is a California Inland Empire location.
The amount was for 400,000. He said he has a 2% rate for 15 years, then a big balloon payment. He has to pay off the ENTIRE loan.
WTF is that? Has anyone else heard of such a loan?
In 2003 I refinanced into a 10 year fixed rate loan and have been making additional payments. I will pay off my house in 2008 or 2009. The balance is about 60K at this time. Some relatives wanted me to tap my equity to buy a new car... Fools.
I have pulled in my spending. I am not going to purchase a new car or anything that is not essential.
I am debt free, except for the house payment. In addition I am trying to build up some savings. It is amazing how hard it is to pay off 60K. I just dont know how an average wage earner can take on the half million dollar mortgages.
If a major economic melt down comes, I should be able to hang on and survive. If things are not as bad then I will be in a good financial position to invest for my kids futures.
To anonymous who pasted the first comment.
You forgot to add at the end:
"Granted, that's a worst case scenario".
And the car with a full tank of gas will sustain you about 2 days while the collapse will last for 15 years.
I live up in the mountains. I figure we can blow the roads up and prevent the hoards of roaming maniacs from reaching us and ride out the collapse.
With satellite TV, windmill power and a storage shed packed with grain and canned goods, we'll be set for quite a while
"I'm sure that $8/hr "guard" will have a lot of sympathy for the plight of your "gated community" if the SHTF. Angry young men in pick up trucks and bros in their "excalades" will pillage for their immediate needs, and the police and National Guard will be vastly outnumbered"
You don't know how right you are! Once went to make a delivery in an expensive gated Irvine, CA tract. The $8.00 per hr, low I/Q security guard just waved me thru without issuing a pass or calling the homeowner. A Pack of "gangstas" could put a generic delivery sign on their truck,use a stolen delivery uniform, have several confederates hidden in the back of a covered shell or van, and waltz right into a gated million-dollar+ community and pillage.
I'm not concerned. I could go hide up in the mountains, but I could also get bitten by a rattlesnake or eaten by a bear. When your number is up, it's up. Besides, I want to stay close to my cable tv over the next few years 'cause it's gonna be quite a show.
You guys are all PARANOID. Get real!
I have January puts on FNM, CTX, LEND, NEW, and TOL.
What happens if the crash is so precipitous that the couterparty of the option can't pay me?
i.e. how far in the money should I wait to exercise the option?
"the only homeowners left standing will see their property taxes skyrocket to support the system, i.e. the elected parasites and the special interest groups that pull their puppet strings. So there go their homes as well."
If the Catastrophic bubble scenerio unfolds the Local, county, state and feds will pile on more taxes and fees onto the ever-shrinking over- indebted homeowning middle classes. California is such a left-wing enviro-wacko, ant--business,pro-illegal alien handout,regulation and fee crazy state that the fix will hit here the hardest. Already there is increased emphasis upon local law enforcement to sqweeze more money from drivers thru issung more traffic tickets, to provide desperatetly-needed monies for already empty city coffers.
Yout gas, utilities, phone taxes are up: Cal will place more bonds in nov for more stupid wasteful gov,t programs , and to put more useless gov't parasites on the public dole.
Local Gov'ts will also issue more and more local bond measures to obtain funding for infrastructure projects. Guess who will pay for these:propertied homeowners .
Lots of Keyboard Kommando racism here... pseudo-macho white guys stupidly terrorized by wetbacks, niggas, gooks and other assorted browns.
Most likely poorly educated Republican white trash scum living in fear and sipping right wing wacko Kool-Aid.
Bunch of faggots....
I think things will be bad, but not Mad Max bad.
For the obvious reason---the Fed will monetize debt to prevent catastrophic deflation. Honestly that's better than riots and chaos.
In the 1930's we didn't have *widespread* rioting and crime. People just suffered.
It will be like Japan but faster. Fan and Fred stockholders might be wiped out; direct obligations of Fan and Fred will go to junk status.
GNMA, on the other hand is equivalent to Treasuries in risk, as it's officially backed by "full faith and credit of the US Treasury" (meaning monetization before default).
Remember than Fan and Fred hold the least risky spectrum of the MBSes, by comparison to private banks.
In the end, many Chinese & Japanese borrowers will get screwed.
In the MBS credit default swaps (wild derivatives) remember that for every loser there's a winner.
Look at hedge fund Amaranth this month who blew up from natural gas trades. There are traders who made out from their profit. A problem for investors, but not for the system.
"Lots of Keyboard Kommando racism here..."
Yeah, the LA riots were perpetrated by mostly white folk on their way home from church. Take off your PC glasses and look around. Statistics prove that certain ethnic groups are far more prone to violent crime. Ignore them at your own peril. I'd rather throw my lot in with a "bunch of faggots" than with the fine folks that inhabit Jacksonville FL or East LA.
Gated communities are going to be DEATH TRAPS should total anarchy occur.
Once the gates are breached (and they will be) there will be no escape for the people who are hold out inside. Sure you might fight off the invaders with wepaons and keep them out for a while. When your ammo and food runs low you are facuked bad.
The best place to be in this situation is a suburban development built prior to the 1970s where the average home price is under $250K and the people drive cars that are between 4-15 years old. These places will not be immediate targets for looting since they do not project money and supplies.
Should things get out of hand you will have at least an escape route in all 360 degrees.
I really do not think it will go Mad Max overnight but crime will soar as money gets tight. If the $500K home buyer can not buy his house with a under $45K income per year then the $8 per hour Home Depot, Olive Garden, etc...worker will not have work. Ditto on home equity loans as a cause.
In the short term Gated Communities will be immune from crime but in the long term everyone inside their walls will die a horrible death.
You read it here first
I'm sure that $8/hr "guard" will have a lot of sympathy for the plight of your "gated community" if the SHTF.
Hell, that guard will probably provide inside information on which houses have the most goods to take or which owners are out. Isn't doom and gloom fun??
in to.
1. Cash
2. bonds
3. gold & silver
4. Fully owned hard assets.
Out Of.
1.stocks
2.oil
3.real estate.
4.debit
butch: You should write horror novels. Have any more where that came from? Good stuff!
Security: gated community with Guard, in case of riots,"
Good Greif I was just exagarating. I am in a 4 story building with 320 other condo owners and renters. The parking is gated and all of the entrancese are always locked, but I was just toung in cheek, really.
I am not expecting the Mad Max, jsut hunkered down for finiancial survial.
Security: gated community with Guard, in case of riots,"
Good Grief I was just exaggerating in a silly way. I am in a 4 story building with 320 other condo owners and renters. The 4 story parking garage is gated and all of the residence building entrances are always locked, but my comment was just tongue in cheek, really.
I am not expecting the Mad Max; I am just hunkered down for financial survival by down sizing and living on the really cheap. Don’t get me wrong, all I have is new and beautiful, just small and bought at 30% below appraisal. No crazy broke flipper landlords for me and no escalation in rent prices. I am never moving again.
No debt, Fixed Mort is lower than the going rents.
You guys are too much....
Now, got food?
PS I can write. Just do not know how to spell check or cut and paste.
Infidelwoman: If they monetize the debt and we have hyper inflation, what are your plans to keep up with HOAs and property taxes?
Also, what about linking your fate to the other condo woners - they might not be nearly as fiscally responsible as you ar.
no spell check here, either...
Thank you for asking as that was part of my plan. My home is only a 535 sq ft. postage stamp penthouse. HOA is only $116.00 per month, which includes gym, pools, etc. plus the biggest savings of all, Home Owners Insurance in Florida. (side bar: building can with stand 145 MPH winds)
Homestead was in place even as I bought from a FB.
Taxes are only $150.oo month.
As the property 'values' go down, taxes will not increase and I have room for a 30% real devaluation before I am in negative equity.
If Hellachopper Ben prints dollars, my mort becomes even lighter yet.
Again, I am not moving. (:
My balcony could even be my urban veggie garden if there is no food!
Bring On the Depression or whatever.
Has anyone here thought about Gold Money (in the UK) or Bullionvault (in several locations including Switzerland)? Even if capital controls were put in place, would it mean you couldn't get access to your account for getting funds back to US? And wouldn't it be an anwer to the problem of being in fractional banking type accounts?
"These places will not be immediate targets for looting since they do not project money and supplies. "
Bingo, my sentiments exactly. I live in a 1950s apartment building, in a suburb, across the street from the local police precinct. We've never had a burglary in this neighborhood for ages because one, it doesn't project money and two, the cops are next door. Other, more exclusive neighborhoods, have had a few burglaries over the years. Those will be the first targeted during a major depression.
Also, what about linking your fate to the other condo woners - they might not be nearly as fiscally responsible as you ar.
True and is a concern, 60 of 320 units are flipper owned. If there were only a few homes in the association, the HOA fees could go out of control cost wise. I think the more units there are the less risk of higher fees. Actuarially speaking there is a bigger spread.
And really, as stupid as this sounds, I am in the heart of the most expensive real estate in Orlando, and I am in a four block area that is newly booming. This building is the most undervalued downtown, IMO.
I am extremely confident that 32801 will be a great place to live during the crash and will regain any losses after the correction.
Thanks HP.
PS. Now you know why I an not Boomer/BubbleSitter/Whosissoscrewed anymore.
I've done some preperation work. First and foremost is to have survival items ON HAND because when the trouble starts you won't be able to get them with paper money or gold. That doesn't stop me from having off bank reserves of both to use if the money system stops working properly.
I'm clear of all debt, mortgage or otherwise.
I don't have all my financial reserves in the country. In times of trouble, debtor nations implement capital controls, so if I have to escape and start over somewhere, access to some financial reserves will help.
I pretty much agree with the assessment of the original reply - things aren't gonna be so wonderful after the bubble bursts. It would interesting to talk with Iraqi citizens and ask what preperations helped the most to help them survive, and what they would have done differently. Hopefully there isn't a total breakdown in society.
Daniel A. Arnold makes some arguments in his book that the "peak" will be in 2010, but it looks to me that things are starting to come apart now. If I don't get robbed by bandits or my home doesn't get destroyed by acts of war, my family and I might last the winter, but what about next year?
I've done some preperation work. First and foremost is to have survival items ON HAND because when the trouble starts you won't be able to get them with paper money or gold. That doesn't stop me from having off bank reserves of both to use if the money system stops working properly.
I'm clear of all debt, mortgage or otherwise.
I don't have all my financial reserves in the country. In times of trouble, debtor nations implement capital controls, so if I have to escape and start over somewhere, access to some financial reserves will help.
I pretty much agree with the assessment of the original reply - things aren't gonna be so wonderful after the bubble bursts. It would interesting to talk with Iraqi citizens and ask what preperations helped the most to help them survive, and what they would have done differently. Hopefully there isn't a total breakdown in society.
Daniel A. Arnold makes some arguments in his book that the "peak" will be in 2010, but it looks to me that things are starting to come apart now. If I don't get robbed by bandits or my home doesn't get destroyed by acts of war, my family and I might last the winter, but what about next year?
Save in Ithaca HOURS.
I pretty much agree with the assessment of the original reply - things aren't gonna be so wonderful after the bubble bursts.
Hate to break it it you but the Bubble has already burst.
>> I bought property in Mexico and own it wholly and out right.
You people who "own" crack me up. You only "own" something until someone puts a gun to your head.
>> I live up in the mountains. I figure we can blow the roads up and prevent the hoards of roaming maniacs from reaching us and ride out the collapse.
It will be my mission in life to FIND people like you who think they're safe.
Ithaca HOURS
A barter system woukld make sense. More sense than the gloomers and doomer do.
Well, it it's been fun, gotta go to the pool party...
gloomers and doomers, rather.
Oh yea, you are really safe in Mexico. hahahhahahhahah
Bubble free System = Inflation free = Interest free
Take a look:
http://www.geldreform.de/
Helmut Creutz: The Money Syndrome
Silvio Gesell: Natural Economic Order
Irving Fisher: Stamp Scrip
Erhard Glötzl: The How and Why of a New Monetary System
Margrit Kennedy: Interest and Inflation Free Money
Werner Onken: A Market Economy without Capitalism
Eiichi Morino: A Story of Robinson Crusoe
Jürgen Probst: Aberrations of an interest-based economy
Dieter Suhr: The Neutral Money Network
Vincent C. Vickers: Economic Tribulation
man, those mormons are looking GOOD all of a sudden!
When the SHTF I'm gonna go room with Keith in England. People there are too polite to riot and loot, unless they're socker fans.
To figure out what will probably happen, consider this question:
what would rich people want?
At the moment, they run the power structure.
1) They don't want a deflationary collapse
2) They don't want to pay huge taxes
3) They don't want an inflationary spiral
4) They don't want to be even with the hoi polloi, so no Mad Max.
5) They don't want capital controls
Of course crap can happen otherwise, but the Powers That Be will have policies to prevent the above.
This means that rich corporations losing money and disrupting business will be prevented, but individual people losing money and their jobs won't be.
Scenario: in the end, the various mortgage insurers (Fan, Fred & MGIC, etc) will get "bailed out", in the sense that they will get loans from the Fed at the "discount window", lender of last-resort.
Everybody inside the system will NOT want them to default on payments which might stimulate a cascading default scenario.
Of course this is nothing other than increasing the money supply. Since it will be happening in the middle of a sharp recession, people won't complain as much. Remember also that since all the mortgages will be going under that is equivalent to destruction of money (new debt = new money, extinguishing debt = extinguishing money).
In the end of the cycle the REIC will have title to too many homes, but they will have the asset.
The overall effect will be a transfer of equity away from ordinary homeowners into the economically privileged financial sectors.
The Austrain fuddy duddy economists will complain about the "moral hazard" in letting the bankers get away with such atrocious lending, but there will be much more desire on the side of the bailout as the alternative (immediately) would be worse.
And then the cycle begins again.
Lenders need to make loans; it's what they do when they show up for work each day, it's how they get paid.
Of course this means that people who were conservative and had a low loan to value will have their personal equity damaged; those extreme flippers who put nothing down, will lose nothing but an ephemeral credit rating.
"In the end, many Chinese & Japanese borrowers will get screwed."
You mean Chinese & Japanese lenders, right?
http://users.skynet.be/
terrorism/jpeg1/
hooligans_logo.jpg
Meet your new UK neighbors.
UK Hoolgans and the riot gear
Does it never end?
Wow the first post would make you want to slit your wrists or move to some South Pacific Island to escape the fallout. This doom and gloom scenario is way over done. There might be some isolated anarchy throughout the country but forget about a total meltdown, it's not going to happen. The powers that be need the working class hero to much. It boils down the the HAVE'S and HAVE NOT'S.
If you can't take care of your family without worrying about if your job is secure or your goverment or state support won't be there, your screwed! So all you consumer debt junkie's enjoy it while you can because someday MAYBE those prized possessions will become your worst nightmare........
maybe a sailboat would be a good idea?
Infidelwoman - yes, in some areas its clear that the bubble has already burst, but the full effect hasn't sunk in on everyone yet.
Keith - I suspect that Butch is very familiar with "The Great Reckoning", an excellent book by Lord Rees-Mogg and James Dale Davidson. It was written a while ago, and while they were "early" with their predictions, their reasoning and analysis is worth reading.
When the SHTF, I'm gonna go be an illegal immigrant in a European country and whine about all the illegal immigrants in the US.
the best tool in the gloomy scenario discussed but probably beyond the intellectual grasp of the red-blooded Americ-uns on this thread is : dual citizenship.
While you all are hunkered down and fighting for scraps to exist as lower class elements, the smart, the elite and internationally savvy are outta here with their assets.
Thanks to the politicians you elected,you all got a one way ticket to Palookaville as you lapped up all that BS of the American dream and that "only superpower" crap.
If you're really shrewd and want the best option in the coming tsunami, get a foreign passport,( if you can figure it out).
Having one, gives you a totally different perspective on your options and enormous financial flexibility beyond the masses.
Lots of Keyboard Kommando racism here... pseudo-macho white guys stupidly terrorized by wetbacks, niggas, gooks and other assorted browns.
Most likely poorly educated Republican white trash scum living in fear and sipping right wing wacko Kool-Aid.
Bunch of faggots..
---------------------------
Shee whats wrong with you douchbag.? No one show at the open house today?
Everyone says the goverment will bail this problem out..you all ahve forgotten one thing, the goverment is broke also. Sure they can print, but it is meaningless and worthless..so?
Billions for the Bankers, Debts for the People
The Real Story of the Money-Control Over America
http://tinyurl.com/phael
Well said Borafatty.
These faggot fairy cracker racists are funny.
One thing about 'us' poorly educated Republican white trash scum,
tomorrow 'we' will still be Republicans, you'll still be A--holes!
Bought a Kimber AND a Glock.
Butch, you sound like chicken little. Not everyone bought their houses in 2005. If prices go back to 2003 levels (40% drop here), that's not nearly enough for epic collapse you describe. A lot of people own houses that are paid off or have so much equity built that they wouldn't loose their homes. Furthermore, anyone who bought in the 90's got them so much cheaper that the vast majority aren't going to lose them. Only the idiots who re-fied or Heloc'd themselves to the hilt are in big trouble.
As far as the MBS's, I've heard that home loans are rolled into bonds with much less risy loans to balance risk. Reducing risk through diversification is not a new concept so I wouldn't assume that 100% of some subprime lenders loans end up all roled into a single MBS. That would be a ridiculous assumption.
:People there are too polite to riot
England and particularly, continental Europe, have far more protests and riots than here. If you thought those Vietnam era student strikes at Kent State, Berkeley, or Columbia were big, then you didn't know anyone living in Europe during the late 60s where much of France was shutdown during the '68 riot.
Most American riots are inner city and then the National Guards or military are called in to disperse the crowd if they encroach upon well to do places like Bel Air or important centers like Wall Street.
Read up on American history if you don't believe me.
How to prepare for a depression?
OK, Americans, time for a little pep talk! We are first and foremost AMERICANS! We WILL OVERCOME any and all obsticles. We WILL come together like we always have and we will get through it! How should you start to prepare? 1. You need to get to know your neighbors (I'd bet most of you don't even know everyone on your own block let alone your neighborhood!) 2. You need to renew your faith. When was the last time you were in a house of worship? When you got married? Easter? Christmas? 3. You need to renew your involvement in your communities. I guarantee you that people who use "anonymous," haven't volunteered for squat in their communities - shame on you! Get off your butt and get out there and do something positive for your community even it's just to pick up trash. There are so many ways for you to give back to your community - so GET ON IT! 4. Invest in your families. When was the last time you visited your infirmed family members? Have you neglected time with you kids because you've been too busy with financial investments? You can loose money anytime, crisis or no crisis, but you can NEVER buy back time spent with your FAMILY and FRIENDS. What's really important? Your family, friends and community or your dammned gold? 5. Be a leader! It's easy to criticize from the peanut gallery, it's another thing to step up to the plate and lead! My favorite Revolutionary War hero, Gen. John Stark said it best, "Live free or die." That is the NH motto, but it's what he said immediately after that sentence that should grasp your attention, he said, "There are a lot of things worse than death." Be an American leader! Let's come together and make things better or die trying, because, "There are a lot of things worse than death." Americans, don't you EVER forget who we are! Chaps
"Only the idiots who re-fied or Heloc'd themselves to the hilt are in big trouble."
It is my understanding that there are quite a few people who "tapped" into their home equity for various reasons.
And these people live in both bubble and non-bubble areas. Apparently, the midwest has seen a large number of home owners who have drained their home equity through refinancing schemes. David Lareah would applaud these newly pauperized serfs.
Charlie,
I don't know of the laws governing California relative to firearms. If they are as strict as New York State and New York City, my guess is that it is very difficult to purchase a semi-auto rifle. Although the Brady Bill expired, New York City has its' local laws prohibiting the purchase or possession of semi-auto rifles. My advice to you is to purchase a nice shotgun. They are much easier to handle and maintain than a semi-automatic rifle. And yes, they will scare the Sh_t out of people, especially if you rack it. Remember, you are limited to the type of ammunition you can use if you purchase a semi-automatic rifle. With a shotgun, there are different types of ammunition that can be used. The shotgun model that I recommend is the Remington 870. If you are interested in a semi-automatic pistol, my recommnedation is the Glock 19 (my sidearm). Easy to operate and maintain. I hope I was of help.
I noticed one scenaro that NOBODY mentioned about the government reaction to the crash:
Ramp up the War in Iraq and on Terrorism by:
1. Mobilizing the businesses on a war footing and all the good stuff that goes with it (rationing "luxury" items, etc). That should cover up any economic mess.
2. Bringing back the draft (to avoid young unemployed men from roaming the streets and rioting).
I think we are looking at the U.S. becoming another "banana republic". The U.S. dollar will become like monopoly money! Many of the Euro countries will be the same. The worse it gets the more they will clamp down.
I live in a "gated community", but remember what Willy Sutton said, "I rob banks because that's where the money is!" The gangs know where the money is. In the gated community!
This is going to get bad, and the poor are going to be hit the worst. Then, comes the mind dead "yuppie" consumers who have spent all their home equity on private schools and BMWs.
It is going to be bad, really bad. "I see broke people!"
Here’s a good read from someone who lived through the economic collapse in Argentina a few years back. While this may be an extreme situation, times are changing here in America. The article covers many topics including firearms. It is a bit scary that this really happened. I hope we never see such a collapse here.
Then again Noah didn’t wait for it to start raining before he built his ark. Click Here
It's funny how this situation has gotten ugly. We have shifted the anger to, now, talking about firearms. It's like the Y2K thing.
I personally think that an effective campaign of information by spreading the word to caution others not to fall from these exotic mortgages would be more productive.
>>I personally think that an effective campaign of information by spreading the word to caution others not to fall from these exotic mortgages would be more productive.<<
Sadly, people who tried to do that got shot down in flames by the mob running the Housing Bubble.
The agent who helped my parents obtain their house about 23 years ago was dead set against even the simple ARM loan (I asked her about when I thought about buying a house 15 years ago). I don't even know if she is still alive (she was up in years back then), but she was one of the few ethical people in her field. Last year when I went house hunting (I love where I live and got tired of playing the rental roulette), I kept hearing the mortgage people talk about ARM loans. For this reason (and MANY more), I just walked away.
In conclusion, prevention only works if people choose to take the advice. Alas, due to greed and peer pressure, the crowd refused to listen to reality and took the advice of the people who gave them the answer they wanted...
Diamonds folks- the easiest way to carry wealth.
::Diamonds folks- the easiest way to carry wealth.
Dude, real life isn't a 007 movie.
jip 5:47,
your last paragraph is well said. i couldn't agree more. however, we should also not react with paranoia or anger. remember what michael corllione in the movie the godfather said? never hate your enemy, it affects your judgment. i think this also goes to all our fellow hp'ers that easily and quickly reacts, and rightfully so, when illegal immigration is mentioned. we have to think rationally and solve the problem in a rational way. only by doing this that we can beat terrorism.
this has to be one of the most retarded threads ever. shame on you all for dwelling so deep into paranoia and fear. hardly a mention of anything good that could come out of it all. lines of hatred, racism and outright foolishness. diamonds are the easiest way to carry around wealth? whatever.
apocalyptic bologna.
"You people who "own" crack me up. You only "own" something until someone puts a gun to your head."
We have guns too.... and ammo and dawgs.
I am debt free, have savings not in banks, gold and silver coins, cash, guns, ammo, big dawgs. What I don't have on my 20 acres are cattle and crops. I will buy 250 gallons of fuel when it hits a low in a couple of months. I will put the 401K into reverse ETFs.
Good luck bubble sitter in Orlando.
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