Posted on 10/14/2009 12:46:47 PM PDT by combat_boots
How to give an economics writer a coronary:
Recommend something that has been done twice before, and both times led to disaster, including being a major contributor to The Great Depression.
Well guess what: JP Morgan and the other banks are doing exactly that.
Oct. 13 (Bloomberg) -- Banks will push the Obama administration to expand its mortgage-modification program to allow interest-only periods on reworked loans, seeking to bring more homeowners into the initiative while recognizing concern that it may only postpone defaults, according to JPMorgan Chase & Co.
MAY?
Can I remind people of history?
Prior to the depression of the 1920s, there was a mortgage loan product used by many of the American people, known as the interest only loan. Why did this long disappear? And why has it suddenly reappeared? Let’s take a moment to answer each question, and hopefully provide some food for thought.
During the 1920s and into the early 30s, many of the citizenry of this country chose to live above their means. They chose the interest only loan because it allowed them to purchase a larger home for less money. What happened when the stock market crashed and jobs were scarce, and there was no income? Many of these people were left without homes; as they had chosen to simply pay the interest on their mortgage there was no equity built into their homeownership. When no equity builds, and the income ceases, the bank forecloses and residents are forced from their homes.
If our government allows this it will guarantee a GREATER DEPRESSION. Whether it comes now or in a few years, it will happen. This is the precise same stupidity that led to the 1930s and it will have the exact same outcome this time.
(Excerpt) Read more at market-ticker.denninger.net ...
“JPMorgan Pitches Interest-Only Mortgages to Boost Obama Plan”
October 13, 2009
By Jody Shenn and Dawn Kopecki
http://www.bloomberg.com/apps/news?pid=20601103&sid=aBnddzF.B8zw
Water-boarding is much to mild, this is a guillotine offense. However, Karl Marx would be proud of his forecast.
We’re doomed. After a financial meltdown of epic proporations, the main culprits want to rewind the movie and start it all over again.
OCTOBER 14, 2009
“MBS, R.I.P.? A Treasury rule on loan modifications riles the securities market.”
WSJ Online
http://online.wsj.com/article/SB10001424052748704471504574443072479356040.html
And the DOW is over 10 thousand today.........sure to squash a story like this one.
“””””And the DOW is over 10 thousand today.........sure to squash a story like this one.”””””
DOW 10,000!!!! Oh Wait, Make That 7,537
http://www.zerohedge.com/article/dow-10000-oh-wait-make-7537
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