naked capitalism: William Black: "There Are No Real Stress Tests Going On"
My nightmare scenario which I fear is often true is that A) because the biggest originators of nonprime loans were mortgage bankers, B) because every large mortgage banker that specialized in nonprime loans went bankrups, C) because many of them went into Chapter 7 liquidations and even those that went into Chapter 11's had little incentive to hang on to files on mortgage loans they had sold to other entities -- the loan files on many nonprime loans may no longer exist. (My fervent prayer is that the loan servicers have tapes with copies of the underlying loan files, but I fear that this prayer will not be answered.) Under this nightmare scenario it will be extraordinarily hard to determine loan quality and losses and very hard to foreclose against borrowers that can afford attorneys (admittedly a minority) and that claim fraud in the inducement.
Under this nightmare scenario it will be extraordinarily hard to determine loan quality and losses and very hard to foreclose against borrowers that can afford attorneys (admittedly a minority) and that claim fraud in the inducement.
and how is that a nightmare for the majority of people involved? Any idiot can face a crisis - it's day to day living that wears you out.
Nationalization is the answer, but there's an idiot streak that runs through the US when it comes to the government being involved in the economy.
I just had someone challenge me today to give one case where nationalization solved anything, and I look em in the eye, and say, Sweden 1995.
And they get flustered, and argue that the government made things worse there.
These days, I feel like we are repeating all the mistakes of the Great Depression. i.e. a belief in self regulating markets was popped by reality, and now the lingering of free market ideology has created the equivalent of the Bavarian redoubt who are damned if they won't trash the whole economy before pragmatic solutions like nationalization get in the way of the way they think that the world works.
And so the crisis grows deeper. And I'll give my consent to any government that does not deny a man a living wage-Billy Bragg
