On Sun, Jan 07, 2018 at 06:16:02PM +1000, jamesd@echeque.com wrote:
After 2005 November, it became very difficult to sell a house except to someone who had no assets, because the peak of the market was in sight.
In consequence, if you unloaded a house after 2005 November, you were necessarily unloading it onto someone who was a beneficiary of an affirmative action mortgage.
And since the game is rigged, the actual beneficiaries were mostly the banks (they were bailed out after all), and those who sold their houses and so cashed in on the general Investment Theatre, and "the tax payer" foot the bill for those got in on the scam. But the banks were the most significant beneficiaries - they always are. I've recently had the thought - when a loan is issued, the banks somewhere in the system, issue or "print" the money for that loan; when interest repayments are made, the bank makes a profit; when capital repayments are made, the original money printed for the loan, is "unprinted"; And so the question arises - when someone goes bankrupt and does not repay the loan, that "printed" money may not get unprinted - if not, then the monetary system is healthier, since more money is available for other people to repay interest on their loans. Now when a bank wipes off a bad debt, and "suffers" a "loss" for the money they "printed", and then they are "bailed out" with more money borrowed by the government and paid for by the tax payer, is the bank double dipping, by getting paid for money they printed but did not "wipe out upon repayment of loan"?