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Under this nightmare scenario it will be extraordinarily hard to determine loan quality and losses and very hard to foreclose against borrowers that can afford attorneys (admittedly a minority) and that claim fraud in the inducement.

and how is that a nightmare for the majority of people involved?

Any idiot can face a crisis - it's day to day living that wears you out.

by ceebs (ceebs (at) eurotrib (dot) com) on Mon Mar 2nd, 2009 at 04:15:33 PM EST
[ Parent ]
Because we will end up paying the bill for it all.

Nationalization is the answer, but there's an idiot streak that runs through the US when it comes to the government being involved in the economy.

I just had someone challenge me today to give one case where nationalization solved anything, and I look em in the eye, and say, Sweden 1995.

And they get flustered, and argue that the government made things worse there.

These days, I feel like we are repeating all the mistakes of the Great Depression. i.e. a belief in self regulating markets was popped by reality, and now the lingering of free market ideology has created the equivalent of the Bavarian redoubt who are damned if they won't trash the whole economy before pragmatic solutions like nationalization get in the way of the way they think that the world works.

And so the crisis grows deeper.

And I'll give my consent to any government that does not deny a man a living wage-Billy Bragg

by ManfromMiddletown (manfrommiddletown at lycos dot com) on Mon Mar 2nd, 2009 at 04:24:55 PM EST
[ Parent ]
I think he means a nightmare from the point of view of a bank regulator who knows a whole heap of "securitised" assets may never be evaluated, not from the POV of mortgage holders faced with foreclosure.
by afew (afew(a in a circle)eurotrib_dot_com) on Mon Mar 2nd, 2009 at 04:32:22 PM EST
[ Parent ]


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