Author Topic: A "great haircut" to kick-start growth  (Read 1374 times)

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Offline zeitgeist

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A "great haircut" to kick-start growth
« on: October 02, 2011, 08:09:25 PM »
And so it begins. 

Quote
A "great haircut" to kick-start growth

http://old.news.yahoo.com/s/nm/20111003/ts_nm/us_haircut

NEW YORK (Reuters) – More than three years after the financial crisis struck, the economy remains stuck in a consumer debt trap. It's a situation that could take years to correct itself. That's why some economists are calling for a radical step: massive debt relief.

Federal policy makers, they suggest, should broker what amounts to an out-of-court settlement between institutional bond investors, banks and consumer advocates - essentially, a "great haircut" to jumpstart the economy.

What some are envisioning is a negotiated process in which cash-strapped homeowners get real mortgage relief, even if it means forcing banks to incur severe write-downs and bond investors to absorb haircuts, or losses, in some of the securities sold by those institutions."We've put this off for too long," said L. Randall Wray, a professor of economics at the University of Missouri-Kansas City. "We need debt relief and jobs and until we get these two things, I think recovery is

{snip}



And the law of unintended consequences will kick in shortly.

Redistribution of wealth anyone?? :popcorn:
< watch this space for coming distractions >

Offline DumbAss Tanker

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Re: A "great haircut" to kick-start growth
« Reply #1 on: October 02, 2011, 08:56:54 PM »
**** that.  Why should I bail out everyone dumb enough to think it was impossible to lose money buying a house? 

I most especially have no sympathy whatsoever for anyone still living in a house and financially able to make the payments, but who is upset because "It's under water."  Tough shit, dall the whaaambulance.  You made a bad deal, and you have the same damned house you bargained for and got, so FOAD, you aren't out any money that ever really existed in the first place.  There is no reason on Earth for everyone else to have to involuntarily buy into fixing you up on the bad deal you voluntarily made.
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Offline zeitgeist

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Re: A "great haircut" to kick-start growth
« Reply #2 on: October 03, 2011, 06:11:55 AM »
**** that.  Why should I bail out everyone dumb enough to think it was impossible to lose money buying a house? 

I most especially have no sympathy whatsoever for anyone still living in a house and financially able to make the payments, but who is upset because "It's under water."  Tough shit, dall the whaaambulance.  You made a bad deal, and you have the same damned house you bargained for and got, so FOAD, you aren't out any money that ever really existed in the first place.  There is no reason on Earth for everyone else to have to involuntarily buy into fixing you up on the bad deal you voluntarily made.

I have no disagreement with what you say.  But, what I am most concerned about is the consequences for the bond markets.  Bonds are used to finance many small town building and public works projects.   Investors, private and institutional, rely on the stream of interest payments.  Underming the bond markets is not a good thing.
< watch this space for coming distractions >

Offline DumbAss Tanker

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Re: A "great haircut" to kick-start growth
« Reply #3 on: October 03, 2011, 09:01:05 AM »
H5, Zeitgeist, you are of course entirely correct on the catastrophic effect this stupid idea would have on financial markets as a whole, as well as undermining the entire concept of moral responsibility to pay debts upon which a free market economy is based.  I was just giving my individual, personal reaction.

 :cheersmate: 
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Offline NHSparky

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Re: A "great haircut" to kick-start growth
« Reply #4 on: October 03, 2011, 09:19:44 AM »
Amen...and how many people would actually gain from such a scenario?  Every "adjustment" program this administration has come up with so far has assisted far fewer than it claimed to, and most of those end up in default again.  Gee, who could have seen that one coming?

Top it off with the fact that people like me who might like a little of the 40-45 percent tax burden lifted off me won't get it (and I'm not rich by any means) and being given to people who neither need nor deserve it, and this administration is going to have to deal with the fact that in 13 months they're going to be given the old heave-ho.
“Any man who thinks he can be happy and prosperous by letting the government take care of him better take a closer look at the American Indian.”  -Henry Ford

Offline JohnnyReb

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Re: A "great haircut" to kick-start growth
« Reply #5 on: October 03, 2011, 10:51:31 AM »
Amen...and how many people would actually gain from such a scenario?  Every "adjustment" program this administration has come up with so far has assisted far fewer than it claimed to, and most of those end up in default again.  Gee, who could have seen that one coming?

Top it off with the fact that people like me who might like a little of the 40-45 percent tax burden lifted off me won't get it (and I'm not rich by any means) and being given to people who neither need nor deserve it, and this administration is going to have to deal with the fact that in 13 months they're going to be given the old heave-ho.

But unfortunately they have made a big run toward more socialism that we will be stuck with forever and ever. They never give up an inch once they've gotten it.

“The American people will never knowingly adopt socialism. But, under the name of ‘liberalism’, they will adopt every fragment of the socialist program, until one day America will be a socialist nation, without knowing how it happened.” - Norman Thomas, U.S. Socialist Party presidential candidate 1940, 1944 and 1948

"America is like a healthy body and its resistance is threefold: its patriotism, its morality, and its spiritual life. If we can undermine these three areas, America will collapse from within."  Stalin

Offline vesta111

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Re: A "great haircut" to kick-start growth
« Reply #6 on: October 03, 2011, 02:01:30 PM »
Amen...and how many people would actually gain from such a scenario?  Every "adjustment" program this administration has come up with so far has assisted far fewer than it claimed to, and most of those end up in default again.  Gee, who could have seen that one coming?

Top it off with the fact that people like me who might like a little of the 40-45 percent tax burden lifted off me won't get it (and I'm not rich by any means) and being given to people who neither need nor deserve it, and this administration is going to have to deal with the fact that in 13 months they're going to be given the old heave-ho.

      Quote/  Amen...and how many people would actually gain from such a scenario?  Every "adjustment" program this administration has come up with so far has assisted far fewer than it claimed to, and most of those end up in default again.  Gee, who could have seen that one coming? Quote\

So when do we Conservatives gather on the Brooklin Bridge to protest Obama and his Amego's? [16]

Offline StealingTime122

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Re: A "great haircut" to kick-start growth
« Reply #7 on: October 04, 2011, 07:36:54 AM »
I agree you couldn't rely on the Government to figure out who would gain from this, it would just become another bloated program that promoted people being lazy while hard working Americans pay for it.

What makes me mad though, is that we bailed out the banks, and subsequently Corporate America, and they haven't increased lending or hiring from it... I only just receive the same old predatory credit card apps with the same "introductory offers" except now they put the APR % in Bold.