Bankuptcy filings in the EDLA are down significantly. What lender wants to take over Katrina real estate, pay taxes, insurance, etc., and not be able to sell it except for a pittance? So, although people are technically bankrupt, the banks don't bother to foreclose. Thus, the filings aren't made. When the stats are cooked up, I guess someone will claim the lack of filings means the BE's doing great.
Yeah, right.
I don't do bankruptcy, but I have wondered how the new credit card rules are working out. As I appreciate it, the debts cannot be discharged, though some sort of payment plan is part of the new scheme.
The stupidist thing I am seeing is people cashing out equity to pay off credit cards and car notes.
I guess it makes some sort of sense if they feel confident that they'll be able to keep paying the mortgage note.
Are you seeing folks going BK b/c of re-setting of ARMs?
The party may be over for now but Uncle Ben Bernanke isn't going to try to crush the economy like Hoover and the Fed did in 1929-1933.
I think there is a consensus among central bankers to drain the liquidity pool before derivatives and belly-upping hedge funders create serious systemic risk, the kind which cannot be controlled even by massive interventions. We got into this mess by the Y2K farce, the dot.bomb burst and 9/11. Deficit spending and Iraq didn't help.
Time to close down the party before real damage gets done. Subprime was just the first step.
A good thing at the end of the day.
Booms, busts, recoveries.......same old same old.
The ones who'll get hurt are the apocalyptic dreamers like Jay who think it's a different paradigm this time. Putting all of one's eggs in a single basket is crazy.
As legendary investor Sir John Templeton wisely said, the four most dangerous words to an investor are "it's different this time." |
