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Pastimes : Clown-Free Zone... sorry, no clowns allowed
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To: Real Man who wrote (364374)4/2/2008 2:51:54 PM
From: stan_hughes  Read Replies (2) of 436258
 
"what happens when a bankrupt nation nationalizes a pile of MBS crap?"

Why, the citizenry gets to receive the non-payments from the underlying bankrupt and dispossessed homeowners of course, after which the state eventually passes a pork barrel laden urban renewal program to bulldoze what's left of the dilapidated and stripped structures that it originally accepted as collateral, all in the name of stimulating the economy by reducing the available housing stock. The citizenry gets the bill for these demolitions at 8 times true cost.

Later on, another pork barrel program is adopted offering financial assistance to homebuilders to reconstruct the bulldozed houses and the cycle starts all over again, except this time the only house that people can afford to buy and that the government can afford to subsidize is a windowless mud hut without the straw roof, because by then people will have resorted to eating straw in competition with livestock due to skyrocketing world food prices in local currency.

Needless to say, given these bright prospects I recommend that everyone buy equities, which is apparently exactly what people are doing. Only an idiot would let economic history get in the way of a buying opportunity
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