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View Diary: "Enronomics" Is Just Another Word For Nothing Left To Lose (69 comments)

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  •  Worse than just that. (5+ / 0-)

    There are several unintended consequences that have occurred because of policy and an economic double standard for the wealthy and the rest of us.

    The first is that housedebtors are waking up to realize that mortgages and ownership of an asset are simple economic decisions devoid of morality.  Following the lead of the wealthy they find that the best course of action is a strategic default on deflating assets.  Mortgages that are more than 90 days dilinquent are still rising and lenders/investors are still not making a dent in that.  This says that with a continued nationwide deflation of house prices anybody holding investments tied to housing still has not seen the full destruction of its market value.  The full accounting, rather than being addressed, is just being delayed.  Enronomics in practice at the national level.

    The other item of interest is the uptick of consumer activity.  There is discussion that this is due to those witheld mortgage payments as people strategically default.  Of course, this administration continues the bias against savings so with little incentive to save, consumption, as an echo of mortgage defaults is being experienced.  Hmmm . . . .d'ya think that this can lead to a run up of some stocks that will collapse when people actually find out they can't spend their rent money?

    Interesting times indeed.

    Distrust of authority should be the first civic duty. - Norman Douglas

    by Fossil on Tue Apr 06, 2010 at 07:29:55 AM PDT

    [ Parent ]

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