Deflation Message Board - Msg: 23356744

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Non-Tech : Deflation

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To: Ilaine who wrote (343)	3/10/2007 3:44:55 AM
From: Maurice Winn	Read Replies (1) of 621

The couple lose their "equity" and go bankrupt, so will be keen to keep working to earn grocery money and rent [when they have to rent]. The credit card company loses their money. That's a bank. Maybe the bank has insurance for such a loss, which I doubt as that seems such a dopey idea. Banks issuing credit card loans are probably not a good bet to invest in. Not paying debts is traditional when push comes to shove. Creditors are usually looked on by courts and others as usurious wealthy people who can afford to take the hit a lot better than the poor debtor and their hungry children who are suffering. The mortgagee loses their money. They get to own a house and probably sell it for what they can get in a mortgagee auction. That's some joint like Freddie Mac, or Fannie Mae, or some such financial institution, aka a bank. So banks and other mortgagees are generally not likely to be good investments until the rebalancing of house capital values, rents, interest rates and incomes is complete. I note that TOL and HOV are well down in price already, so maybe the losses are built in. I considered shorting them at their peaks but didn't get around to it - there are so many investment opportunities it's hard to know what to do [I went for my old favourite Globalstar instead in the end]. FRE and FNM are steady enough finance.yahoo.com If FRE and FNM and JPM and C etc go broke, should I care? I could just buy half a dozen houses in sunny southern California and rent them to the existing "owners" who will need somewhere to live. They could cook meals for me when I come on holiday and act as armed guards against marauders. They could chauffeur me in their SUVs which could be sold by the mortgagee/creditor as a going concern = house and transport. All that would change would be ownership papers [and spending patterns by the new butlers/chauffeurs/cleaners/chefs/gardeners]. Traffic jams would be thinned out. Air pollution would drop. Mqurice

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