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alstry (< 20)

11.10.9...It is all a Fraud Fools...



October 14, 2009 – Comments (4)

One of the biggest, most high-profile deals of the commercial real-estate boom is in danger of imminent default, signaling the beginning of what is expected to be a wave of commercial-property failures.

In the past five years, the vast majority of lending of our financial institutions was to real estate.....both commercial and residential.  The loans have infected our banks, mutual funds, and pension funds.

As we learned from Barney Frank last Friday, it was the policy of government to permit bad lending to prop up real estate values.  The problem with making trillions in bad loans is that eventually trillions default, revenues evaporated, and millions get fired from their jobs.

And when you have no income, it doesn't matter how low the mortgage goes, you can't afford to maintain the house.

“You can’t modify someone if they don’t have income or a job. We have to be realistic going forward. If we are going to play a numbers game, we are going to see a smaller percentage of borrowers in default able to be modified. It’s an unfortunate and difficult fact we are going to have to face.”
John Courson, president and CEO of the MBA, Oct 13, 2009.(from CRisk)

Since 2007, if you factor the decrease in the labor participation rate, U6 increase, massive wage cuts, and uncounted independent contractors and small business owners....somewhere around 30-50 million Americans have seen their incomes evaporate or decrease materially.

That has had a massive impact on government tax receipts....especially to medicare/medicaid and social security.  This decrease on only just beginning to be FELT in the system.  We are going to see millions of cuts to health care simply because revenues are evaporating.  You can't escape it, it is a natural consequence to declining revenues.

Due to evaporting tax receipts, government is being forced to run a massive budget....approaching $2 Trillion dollars and growing as dependence of government increases and revenues decrease.

No nation or group of nations can fund a $2 Trillion dollar deficit.....very difficult choices will have to be made going forward....continue to cournterfeit and destroy the value of the dollar, or make dramatic cutbacks and put our nation in the deepest depression in its history.  Government simply can't continue counterfeiting without massive consequences to its citizenes.

I know the market is going up, but the dollar is crashing.....and once others stop accepting it, our nation will be in serious trouble.  At this point, prepare to start reading about evaporating revenues in health care and massive layoffs.  Last night we learned that thousands are getting axed in North Carolina alone......that is simply one state and it is just the beginning.

Just wait until you find out that much of the assets on banks books are simply commercial real estate loans......and now that commercial real estate is crashing at the fastest rate in history......those assets are in trouble.  At some point the nation will be forced to live in reality....and currently the FDIC is out of funds and revenues to government is evaporating......

Unless we restructure debt....our country will pretty much shut down.....that is what happens when government encourages the issuance of trillions in bad debts.   Then, when it starts defaulting.....only bail out the bankers. you Feel America Shutting Down with MASSIVE cuts in health care and government and MASSIVE defaults in commercial real estate.

You simply can't sustain a nation on a banking system with collapsing assets and a government that couterfeits currency to maintain itself.

4 Comments – Post Your Own

#1) On October 14, 2009 at 10:21 AM, alstry (< 20) wrote:

DUBAI (Reuters) - Private equity firm Blackstone Group's chief executive said the worst of the industry's problems were behind it, and dealflow and IPO opportunities were opening up again.

Stephen Schwarzman also said on Wednesday he was seeing "more than green shoots" of economic recovery, though the scale of growth through next year was still unclear.

Doesn't Blackstone have 8 IPO scheduled  to sell to your pension fund and retirement funds?????

Too bad revenues to Autos, Transporation, Hotels, Government and Health Care are collapsing....unless we restrcture....what do you think happens if Oil goes to $200 per barrel.

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#2) On October 14, 2009 at 11:23 AM, JerseyShoreGirl (< 20) wrote:

The Silver Bear Cafe:  Government Reports Point to Fiscal Doomsday

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#3) On October 14, 2009 at 11:38 AM, bigcat1969 (81.28) wrote:

Another interesting note is that many of the Q3 results have been helped by low taxes.  I've seen that note several times so far in this young earnings season.  If income tax and business tax both fall, where is the government money for 2010 going to come from?

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#4) On October 14, 2009 at 11:47 AM, alstry (< 20) wrote:

Most Fools don't realize that companies keep two sets of books....the tax books they report to Uncle Sam and the financial books that they report to shareholders......

Guess which one generally looks a lot prettier????

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