Zombieland

Greetings good citizen,

You ought to know by now that I never run back to back scare the pants off of you offerings, so don’t be mislead by the title. We aren’t talking about ‘real’ zombies (although I suspect some of you would take that topic somewhat more seriously than the wholesale trashing of your constitutional rights come T.E.O.T.W.A.K.I.)

No, today’s examination of figurative zombies extends only as far as the financial system and their largest debtors…

Um, Ilargi rightly points to something we ‘Doomers’ have been saying all along. Our, er, ‘system of commerce’ is dead and desperately needs to be replaced, pronto!

Then we encounter this kind of dangerous speculation which assumes demand will somehow recover in the absence of customers…(apparently the few that remain employed will buy ‘more’, for some foolish reason. Perhaps the plan is to ‘gift’ their [surviving] unemployed relatives?)

YOU don’t realize anything is ‘amiss’ because life today carries on like it always has. You go to a place of business, tender payment and they accept it without question…for now, anyway.)

BUT (and it’s a mighty big but!) the banks that clear/collect what everybody owes everybody else are in fact ‘insolvent’.

Were this to become an issue (and in the real world it would be) banks would be ‘unable’ to foreclose on anyone because the bank would have gone out of business.

Naturally, the greed heads would have devised a way to get their hands on your property without having to pay for it…but since they ‘wished’ the money into existence in the first place, its sort of the same difference.

But that is neither here nor there. The real problem is the banks can NEVER recover the money they lent on these properties IF the current (nominal) owner DOESN’T pay off the balance.

And most people who bought at these sky-high prices never intended to be the ones who would ‘pay off’ the mortgage! (The next sucker would perpetually be the one who would be ‘on the hook’ for more than the property was worth.)

‘Cept they ran out of suckers…permanently.

Stop paying the suckers enough to afford/qualify for million dollar mortgages and you’d be amazed at how quick the ‘supply’ of buyers would outstrip the ‘demand’ for houses!

Fast forward to today.

Now we have a HUGE inventory of houses that the current owners owe more on than they anyone is willing to pay. Since most mortgages are ‘non-recourse’, this is not the owner’s problem but the banks.

Understand good citizen that this is only a single symptom of a much larger and more disturbing situation.

The home situation is eminently solvable. (Make the stack of lumber ‘free’.) The crisis of the ever-expanding economic desert is not as easily solved; ‘work share’ is only a partial solution.

As you know, ‘A’ is directly tied to ‘B’.

The ‘scary’ part of this zombie story is ‘why’?

Ignorance don’t fly. There is no way that these people can honestly claim they were ‘ignorant’ of the outcome.

So why did they do it?

And that’s the puzzle I’ll leave you with good citizen as I’ve already shared my theory as to ‘why’ they did what they did.

It’s odd how peak oil and peak population can be tied together in such a destructive fashion.

But we have already determined that we aren’t dealing with particularly ‘bright’ people here…

Thanks for letting me inside your head,

Gegner