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Mortgage or Death Age By James Reed
The French word for “dead” is “mort,” and it is no surprise that our English word “mortgage” also has the connotations of death built into it. This is the field where we conspiracy theorists belong, not contesting biochemistry and things we failed at high school science. To my mind it does not matter what the causes of the present so-called pandemic pandemonium are, bioweapon, natural evolution of nasty bugs, 5 G or whatever. I am agnostic about the biology and causation. But not so the economic effects, which are real. For the US, a mortgage crisis is underway, and this alone could ring in another GFC, not KFC, apart from every other economic mystery and misery:
“Unlike in the 2008 financial crisis when a glut of subprime debt, layered with trillions in CDOs and CDO squareds, sent home prices to stratospheric levels before everything crashed scarring an entire generation of homebuyers, this time the housing sector is facing a far more conventional problem: the sudden and unpredictable inability of mortgage borrowers to make their scheduled monthly payments as the entire economy grinds to a halt due to the coronavirus pandemic. And unfortunately this time the crisis will be far worse, because as Bloomberg reports mortgage lenders are preparing for the biggest wave of delinquencies in history. And unless the plan to buy time works - and as we reported earlier there is a distinct possibility the Treasury's plan to provide much needed liquidity to America's small businesses may be on the verge of collapse - an even worse crisis may be coming: mass foreclosures and mortgage market mayhem. Borrowers who lost income from the coronavirus, which is already a skyrocketing number as the 10 million new jobless claims in the past two weeks attests, can ask to skip payments for as many as 180 days at a time on federally backed mortgages, and avoid penalties and a hit to their credit scores. But as Bloomberg notes, it’s not a payment holiday and eventually homeowners they’ll have to make it all up. According to estimates by Moody's Analytics chief economist Mark Zandi, as many as 30% of Americans with home loans – about 15 million households – could stop paying if the U.S. economy remains closed through the summer or beyond.
"This is an unprecedented event," said Susan Wachter, professor of real estate and finance at the Wharton School of the University of Pennsylvania. She also points out another way the current crisis is different from the 2008 GFC: "The great financial crisis happened over a number of years. This is happening in a matter of months - a matter of weeks." Meanwhile lenders - like everyone else - are operating in the dark, with no way of predicting the scope or duration of the pandemic or the damage it will wreak on the economy. If the virus recedes soon and the economy roars back to life, then the plan will help borrowers get back on track quickly. But the greater the fallout, the harder and more expensive it will be to stave off repossessions. "Nobody has any sense of how long this might last," said Andrew Jakabovics, a former Department of Housing and Urban Development senior policy adviser who is now at Enterprise Community Partners, a nonprofit affordable housing group. "The forbearance program allows everybody to press pause on their current circumstances and take a deep breath. Then we can look at what the world might look like in six or 12 months from now and plan for that." But if the economic turmoil is long-lasting, the government will have to find a way to prevent foreclosures - which could mean forgiving some debt, said Tendayi Kapfidze, Chief Economist at LendingTree. And with the government now stuck in "bailout everyone mode", the risk of allowing foreclosures to spiral is just too great because it would damage financial markets and that could reinfect the economy, he explained. “I expect policy makers to do whatever they can to hold the line on a financial crisis,” Kapfidze said hinting at just a trace of a conflict of interest as his firm may well be next to fold if its borrowers declare a payment moratorium. "And that means preventing foreclosures by any means necessary."
Get ready for the Great Depression 2.0, something long anticipated, and coming up fast to smash everything:
“Last week more than 3.2 million Americans filed initial claims for unemployment benefits, and that was more than four times higher than the previous all-time record. This week another massive surge is expected, and we will continue to see lots more layoffs for as long as this pandemic persists. It is going to be a very challenging time for the country as a whole because we haven’t seen anything like this since the Great Depression of the 1930s. Yes, shutting down most of the nation is saving lives, but it is also absolutely crippling our economy. According to a survey that was conducted from March 20th to March 26th by Challenger, Gray & Christmas, almost half of all U.S. companies say that it is likely that they will be conducting layoffs at some point “in the next three months”… Forty-nine percent of companies told Challenger, Gray & Christmas they are very or somewhat likely to conduct layoffs in the next three months, while 11% reported they have conducted permanent layoffs; another 7% have conducted temporary layoffs. If that actually happens, can you imagine what that will do to our unemployment rate? I know that this may sound really crazy, but at this point, the St. Louis Fed is projecting that we will soon see a 32 percent unemployment rate… Millions of Americans already have lost their jobs due to the coronavirus crisis and the worst of the damage is yet to come, according to a Federal Reserve estimate. Economists at the Fed’s St. Louis district project total employment reductions of 47 million, which would translate to a 32.1% unemployment rate, according to a recent analysis of how bad things could get. Could things really get that bad so quickly? If we do see a number that high, it would surpass even the highest unemployment rates that we witnessed during the Great Depression of the 1930s.”
The time proven “solution” to this problem of economic collapse is a world war to get everything moving again and get the money flowing back into the meaningless computers of the super capitalist financial overlords. But, this time they may have bitten off more than they can chew, for war will inevitably be nuclear, and that will not be “fake.” Spoiler alert; most people die, some of the elite class too.