Will the financial system collapse by 2013?

[william the wie]

I'm not sure. 2-3 weeks ago GMAC popped up on the radar at the start of foreclosuregate. About a week ago I saw my first story of lawsuits by MBS bondholders now these stories are becoming common.

Let's see if I can lay this out properly. The states invested pension funds into the bubble and lost money in the bust. The bust also decreased state and local tax revenues by dropping real estate values. Therefore state and local officials have strong incentives to overturn crap foreclosure filings and then produce revenues from foreclosuregate. They will then have evidence to produce in federal court showing a lack of due diligence in securitization.

So how much chewing on the money center banks from multiple directions before they meltdown?

What will replace the Too Big To Fail banks?

 

[2Parties]

define "collapse".

 

[william the wie]

define "collapse".

Like the fall of 2008 only bigger and messier.

 

[uscitizen]

I'm not sure. 2-3 weeks ago GMAC popped up on the radar at the start of foreclosuregate. About a week ago I saw my first story of lawsuits by MBS bondholders now these stories are becoming common.

Let's see if I can lay this out properly. The states invested pension funds into the bubble and lost money in the bust. The bust also decreased state and local tax revenues by dropping real estate values. Therefore state and local officials have strong incentives to overturn crap foreclosure filings and then produce revenues from foreclosuregate. They will then have evidence to produce in federal court showing a lack of due diligence in securitization.

So how much chewing on the money center banks from multiple directions before they meltdown?

What will replace the Too Big To Fail banks?

A bunch of smaller area banks to serve the area they are located in.

Bigger is better?
More centralized is better?

 

[william the wie]

I'm not sure. 2-3 weeks ago GMAC popped up on the radar at the start of foreclosuregate. About a week ago I saw my first story of lawsuits by MBS bondholders now these stories are becoming common.

Let's see if I can lay this out properly. The states invested pension funds into the bubble and lost money in the bust. The bust also decreased state and local tax revenues by dropping real estate values. Therefore state and local officials have strong incentives to overturn crap foreclosure filings and then produce revenues from foreclosuregate. They will then have evidence to produce in federal court showing a lack of due diligence in securitization.

So how much chewing on the money center banks from multiple directions before they meltdown?

What will replace the Too Big To Fail banks?

A bunch of smaller area banks to serve the area they are located in.

Bigger is better?
More centralized is better?

I have no problem with that but less leveraged banking is better than bigger or smaller which is why I use a credit union.

 

[uscitizen]

I'm not sure. 2-3 weeks ago GMAC popped up on the radar at the start of foreclosuregate. About a week ago I saw my first story of lawsuits by MBS bondholders now these stories are becoming common.

Let's see if I can lay this out properly. The states invested pension funds into the bubble and lost money in the bust. The bust also decreased state and local tax revenues by dropping real estate values. Therefore state and local officials have strong incentives to overturn crap foreclosure filings and then produce revenues from foreclosuregate. They will then have evidence to produce in federal court showing a lack of due diligence in securitization.

So how much chewing on the money center banks from multiple directions before they meltdown?

What will replace the Too Big To Fail banks?

A bunch of smaller area banks to serve the area they are located in.

Bigger is better?
More centralized is better?

I have no problem with that but less leveraged banking is better than bigger or smaller which is why I use a credit union.

anyone else personally remember the S&L scandal?
And bailout. Which I think the bonds that bailed it out are now comig due so we will actually finally be really paying for the S&L bailout.

umm except for the fact that the SL bailout bonds will be paid off by selling more bonds to China?

 

[loosecannon]

I'm not sure. 2-3 weeks ago GMAC popped up on the radar at the start of foreclosuregate. About a week ago I saw my first story of lawsuits by MBS bondholders now these stories are becoming common.

Let's see if I can lay this out properly. The states invested pension funds into the bubble and lost money in the bust. The bust also decreased state and local tax revenues by dropping real estate values. Therefore state and local officials have strong incentives to overturn crap foreclosure filings and then produce revenues from foreclosuregate. They will then have evidence to produce in federal court showing a lack of due diligence in securitization.

So how much chewing on the money center banks from multiple directions before they meltdown?

What will replace the Too Big To Fail banks?

I dunno, Willie. The Fed and the Federal government are completely committed to the biggest banks at the expense of the states and the general economy.

I can imagine the general economy melting to zero and the biggest banks surviving, but I can't imagine the Feds allowing the opposite.

During the great depression poaching regs and tax auctions on private property continued unabated. People lost it all while the richest made fortunes often as a direct result. The government did nothing about it.

The richest of the rich are too big to fail. Too big to jail. The rest of us are disposable.

 

[william the wie]

Durant (founder of GM) and Insull (founder of Southern Co.) became really broke really quick in the 1930s. None of the Morgan clan hold positions of prominence in any of the TBTF banks and haven't done so since the 60s. Sounds like turnover to me.

 

[loosecannon]

"None of the Morgan clan hold positions of prominence"

they died off. Almost every other mogul survived and thrived.

 

[william the wie]

"None of the Morgan clan hold positions of prominence"

they died off. Almost every other mogul survived and thrived.

So sorry they didn't, both male lines from Jack and the various female lines are still well to do just not prominent. Also the lines of JP sr.'s siblings are also presumably going strong except for the two lesbians one his sister and the other his daughter. The family remittance man the son of one sr.'s brothers married a geisha before WWI and that union had no issue but generally speaking the Morgans have a lot of descendants.

 

[Toro]

I don't think so.

In 2007, the world was sleepwalking towards a disaster in the midst of one of the biggest asset bubbles of all time. Since then, we have had the biggest decline in home prices since the 1930s, a trillion dollars of write-downs, significant financial reform legislation, debt is being termed out and everyone hyper-aware of financial collapse. We've already gone through much of the mess that have to go through.

I'm not sure how big this foreclosure thing is going to be. It may be big, I don't know. However, I had dinner with a retired professor of banking a few nights ago, and his take on it was that the hit isn't going to be that big. It was his opinion that much of this is not on the banks, that it is on the service providers, and that the banks are going to fight it as opposed to settle quickly, which he says they usually do. He also believes that if you look at the volume of mortgages that are questionable, the potential hits to book value aren't that big. He calculates that the hit to Bank of America's book value in the absolute worst case scenario would be $50 billion pre-tax. But he said he said a more realistic charge would be $8-$10 billion after-tax.

When I think of potential things that can take down the financial system, I don't think they are related to the mortgage and housing crisis. I think that is well known. Instead, I think it would have to do with sovereign debt, currencies, inflation and emerging markets. I think Japan is a potential ticking time bomb. I think China could implode. I think if we have another financial melt-down, it will be in an area where we are complacent and not ready for or even contemplating.

 

[editec]

I'm not sure. 2-3 weeks ago GMAC popped up on the radar at the start of foreclosuregate. About a week ago I saw my first story of lawsuits by MBS bondholders now these stories are becoming common.

Let's see if I can lay this out properly. The states invested pension funds into the bubble and lost money in the bust. The bust also decreased state and local tax revenues by dropping real estate values. Therefore state and local officials have strong incentives to overturn crap foreclosure filings and then produce revenues from foreclosuregate. They will then have evidence to produce in federal court showing a lack of due diligence in securitization.

So how much chewing on the money center banks from multiple directions before they meltdown?

What will replace the Too Big To Fail banks?

Possibly.

The foreclosure moritorium is very destabilizing both to banks and to the real estate market.

But I suspect that the state governments are going to start feeling the pressure for both banks and the real estate community (and eventually the people, too) to lift any moritorium.

I mean...what bank is going to loan money on RE, if they cannot also have that loan secured by foreclosure?

I'm not AT ALL sympathetic to the banksters, but I can surely see why they're not going to loan under these circumstances.

 

[mayya555]

I'm actually more and more confident that a great fiscal crisis is going to hit us very soon.

 

[B. Kidd]

Donald Trump gives us 5 more years unless we start taking effective action now; primarily in areas of working on the deficit, growing our manufacturing base, and getting tougher with China as far as suggesting a rise in import taxes.