Real estate and Dr. Zhivago
Chiv De Noir
3:20 PM (43 minutes ago)
James,
Continuing thanks for all your work, and Lynn’s.
Your recent talk with the Myth crew, I thought, was great; I’ve listened 3-4 times to the sections starting at about 50:00.
You might find a recent article in Bloomberg interesting and relevant:
Fed’s Mortgage-Buying Spree at $1 Trillion With No End in Sight
By Christopher Maloney
September 1, 2020, 11:59 AM EDT
The bank now owns 30% of outstanding agency mortgage bonds
FOMC promises to keep buying ‘at least at the current pace’
“[The Fed] now owns almost a third of bonds backed by home loans in the U.S.”
It’s framed as a benevolent program to relieve stressed homeowners, although without mentioning any concrete acts that would directly and legally extinguish the mortgages in part or in full, or even toll the accumulation of interest. All the help seems indirect; it’s keeping rates low so mortgagers can re-finance (re-commit) at lower rates.
My understanding is that the Fed is a group of private bankers; that regular people aren’t allowed to know who they are; that as an organization it hasn’t been audited in decades, if ever; and they can more or less create US money by creating US debt.
Further, If I’m correct, then the following two questions are functionally equivalent: “Who owns the Fed?” “Who holds a third of US residential home mortgages and on their way to holding even more?”
My enclosure act/penal law/slavery radar is going off.
How about yours?
Anyway, I think this supports your Dr. Zhivago suggestion. If a federal quasi governmental agency holds this many mortgages (via mortgage back securities, i.e. a bunch or tranche of mortgages), then who is gonna stop a federal government effort to... well who knows what ‘compromise offer’ might be in the offing?
Or maybe I’m missing or misunderstanding something.
Thanks again,
—Chiv De Noir
Of course these rich fuckers have never wanted us in the cities—and I never wanted to be in the cities—it was all I could afford until I couldn't and had to go on the road.
Typically, bus lines and light rail, okayed by government agencies, act like a social hypodermic needle, injecting a suburban stimulant into the city bloodstream and shipping criminals to the suburbs and freeing up the city for gentrification. Everything I have seen in Baltimore City and surrounding municipalities points to the strong desire on the part of :
-Federal Government
-City Government
-NGOs
-Real Estate Developers
-and Banks
To push as many criminal class and working poor out of the cities and into the suburbs as possible, destroying suburban house values and extending new debt to prospective urban gentry who might be willing and able to flee from the new savage frontiers. I'm at 7,000 feet and there are half-built subdivisions all over the place, without water to sustain them once built, which means the locals and their agriculture must be driven out. Ultimately suburbs are still going up on the roof of America, in high altitude deserts where the marginal elite are hoping to outrun the banker cities and suburban ghettos they have brought into being like some alchemist fleeing from his great golem.
Note that for 20 years, municipal stadiums have been renamed from civic sports teams centers, to promotional billboards for banks.
The lawyers for the rioters who are driving down real estate values for months now have suspiciously deep pockets. Don't forget that earlier this year, as the shamdemic hit, the sister of the Orange Man's son-in-law was over in China recruiting billionaires to become U.S. citizens if they were willing to spend a certain minimal millions to acquire property in the U.S. This nation is being auctioned off at the same time its people are being driven off the land of their birth and deeper into private and collective debt, which is exactly what was done to Virgin North America in the 1600s. We are the Indians now, and do not expect a reservation. Our destination is Wounded Knee.
"It’s framed as a benevolent program to relieve stressed homeowners, although without mentioning any concrete acts that would directly and legally extinguish the mortgages in part or in full, or even toll the accumulation of interest. All the help seems indirect; it’s keeping rates low so mortgagers can re-finance (re-commit) at lower rates."
I suspect that mortgage delinquencies and defaults are surging, so the program is actually relieving the banks while the governors of certain states are relieving the homeowners by forbidding foreclosure in the short term.
We basically have a Soviet-style command economy.
Modern Monetary Theory (MMT) claims that all money is government-backed debt. This seems obviously wrong in that it creates huge moral hazards for big entities and there's no way to distribute this money to the little guy except in the form of more debt such as bigger mortgages and car payments, but the buck always stops with the little guy. What actually happens is that huge entities end up gobbling up all the cash and driving up the cost of everything such as real-estate.
I think this is obviously near its end-stage, but this can be irrational much longer than we can all stay solvent.
Thanks for those deductions, Bryce.
The only reason they make us pay taxes is to keep up the illusion that our money is worth anything. If uncle Sam wants to take it all from you, it must be worth SOMETHING, right? All money now days is just an abstract representation of some debt somewhere.
I have a hard time mustering up any sympathy for most Americans. Y'all got your new cars and and your netflix and your food stamps and your student loan debt. Choke on the ashes, bitches.
Choke on the ashes is quite an appropriate sentiment.
No one in history has had it easier than us, at any time in any place.
T-Rex,
Yes, that is exactly right. Under MMT, taxes drive demand for the currency since you have to pay your taxes in USD. You are also correct that our money is essentially government-backed debt.
I'm partial to gold and hacksilver myself.