I know they made bonus, so huzzah and hurrah- you’ll always have that.
Coming down isn’t going to be pleasant. And as it turns out, a number of those little colored pills released a bacterial agent that will leave the body shell intact and the host functioning… while it rots from the inside.
Oh yes, the patient knows, but how well can he keep it secret from his colleagues, who can only suspect? In fact, he can keep coming to work as if nothing happened, until, well, until he can’t anymore.
Jonestown is not a model for a how a modern financial system ought to be- oh, wait, yes it was. -Ghost of J.P. Morgan
Blight in Blighty
It appears the default problem in Britain– prices increasing each of the last ten years- might not get as bad as it will get here. Lenders there held mortgage instead of selling them on to the bond market (so while they bought a lot of American CDO/CLO’s they didn’t generate any of their own), even though the British people, on an individual level, still have subprime resets and other scams to deal with.
On the other hand, Britain has farther, in terms of declining property valuation, to fall.
DEW- Distant Early Warning system
The San Francisco Bay area town of Vallejo is in crisis:
The city of Vallejo is on the brink of becoming the first California city ever to declare bankruptcy
(Wait- what about Orange County?)
Seems that willful deficit spending (hmmm… sound familiar?) has finally hit the wall.
The financial pressure’s been building for years. Badly negotiated union contracts, debt load, over-generous entitlement programs for city employees, and ultimately failure to recognize the value of a balanced budget. In other words, fiscal irresponsibility. And compared to a lot of muncipalities, this one wasn’t badly mismanaged.
What tipped it?
In a word, housing. Declining property values, default and foreclosure, people not paying property taxes- oh and also the stampede of early retirees trying to save their own
I wonder during the last twenty years of bad stewardship, what they fucking expected the result would be?
Still, if not for the housing bubble bursting, Vallejo might have continued to postpone the inevitable.
So, what we have here is a microcosm of the nation.
Whaddya think, is this a sign of more to come, or just an isolated incident?
“For us it’s not as much a debt problem. It’s more of a structural problem.”
You said it, pal – famous last words?
Duhbya’s approval rating at an all time low.
Playing the blame game
One thing I’m wondering about is more and more MSM articles (see below) seem to infer that homedebtors who refinanced were steered, against their wishes, into one of those exploding ARMs.
Also it occurs to me that people who moved to a fixed rate to an adjustable mortgage so they could take a MEW at the same time did so not just because it was easy, but because their credit worthiness might not have enabled them to land a favorable APR.
While I wouldn’t put it past lenders to play switch the bait, ultimately it falls on to the borrower to politely decline if they are not satisfied with the terms, or refinance with a lender who will give them the fixed terms they desire.
Fiscal responsibility resides on both sides of the phone (just a reminder).
Ben Jones post for da day
For Pennsylvanians, relevant reports of how RE is doing in the bergs.
“Liquidate labor, liquidate stocks, liquidate the farmers, liquidate real estate. It will purge the rottenness out of the system. High costs of living and high living will come down. People will work harder, live a more moral life. Values will be adjusted, and enterprising people will pick up the wrecks from less competent people” -Treasury Secretary Andrew Mellon, 1933