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Strategies & Market Trends : The Residential Real Estate Crash Index -- Ignore unavailable to you. Want to Upgrade?

To: Dan3 who wrote (90120)	9/22/2007 4:13:43 PM
From: ChanceIs	Read Replies (1) \| Respond to of 306849

>>>asks the parasites that created the risky, worthless, CDOs, etc. eat the risky, worthless, CDOs, etc.<<< Hmmmm. OK. They are the bagholders at the end of the chain who believed Moody's when it showered AAA ratings on the CDOs. I can go with that. Let them get whacked. As a matter of practicality, that $20K (from the example) is long gone and impossible to collect by the bagholders, regardless of what Edwards does. There are other implications. As a result of Edwards changing the spots on the leopard the.....how to put it.....oh yes....the "Borrowing Challenged" homeowners stay in their homes and service a $100K loan instead of a $120K loan. How does that work??? Post BK, won't it be a new loan, probably with a different lending institution, looking more carefully and demanding a higher rate??? Will Edwards legislate a lower rate for the freshly BKed, or perhaps create a new state owned bank which will dish out $$$$ at lower rates?? An attorney buddy of mine says banks love to lend to the recently BKed. They can only file once every seven years, so if they screw-up, there is no defense. Will home prices be up in six years so that the banks have some red meat available?? Probably. Then there is the matter of Cancellation of Debt (COD) income. Edwards tip-toes around that ugly little stink bomb. (Face it - he avoids it all together.) IRS would hold that that $20K is income upon which the Borrowing Challenged will have to pay income tax. If the bagholders get to write off the CDO losses against their taxes, shouldn't the Borrowing Challenged have to pay tax on the COD? (COD - CDO - this is all so confusing.) You know that the COD tax is going to be wiped out. Imagine the political scandal if IRS tries to collect. So who makes up the difference between the CDOs and CODs??? Thats right. You and me. Will congress raise the $3K annual capital loss deduction to help out the CDO bagholders to allow a little justice??? I thought the board needed a good laugh. >>>prudent savers would be rewarded with higher interest rates for DEPOSITS, which the Banks would have to seek out<<< Good God man. Bernanke just cut rates. Are you suggesting that in addition to Edwards forcing the banks to eat the losses he is going to legislate higher deposit rates independently from the FED???