All Posts Tagged With: "mortgage"

The problem is that the global economy in general, and the US economy in particular, is operating on so much medication that it is difficult to conduct an appropriate examination of the patient at the current time.

“Public assistance enables the world’s largest 15 financial firms to return to the capitalization they had in September 2008,” the article continues. The largest of the largest, HSBC, is now judged to be worth $186 billion, according to the stock market.

Today’ Age reports that the Trust will try to raise $280 million from the issue. Some of that will be used to pay off nearly $450 million in securities that mature in December. Hmm. Selling more debt to pay off old debt. There’s never a bad time for that if you don’t have cash.

This brings us to a quick point about the Aussie property market. A frequent complaint in the e-mail box is that house prices are a local and not national phenomenon. If that’s right, then it doesn’t make any sense to talk about a national property bubble…because there can’t be one, can there!?

As we said at the ‘Australia in the Red’ debt summit, “recovering from what?” For something to recover you generally need to show symptoms of sickness. So far all the Australian property market has shown is a couple of spots.

But these ‘spots’ are potentially hiding something much, much worse.

“But not to worry,” borrowers were told. “Betting on ever-rising home prices is the safest wager in the whole wide world. If you have problems with cash flow when the ARM resets, your house will be worth a lot more, so you can simply sell it and walk away with a nice chunk of change in your pocket.”

Investors refrain from taking long-term positions because there are so many known unknowns and even more unknown unknowns (although we conceded it is hard to put a number on the number of unknown unknowns, given their unknown nature, if you know what we’re saying).

Yes, dear reader, when Richard Nixon cut the link between the dollar and gold, the world has been using a money system that is, to put it in its best light, experimental. The last experiments of this sort – on anything like this scale – were conducted in the 18th century. The Banque Generale was set up by that rogue, John Law, to buy up the debt of France – of which there was plenty.