EVERY mortgage created is bought and placed into a MBS, (Mortgage Backed Security) bond, or a CDO, (Collateralized Debt Obligation).. Every single one.
Right now everyone who bought into the moratorium concerning their mortgage and has not paid their mortgage for, say, 6, 9, 12 months, is actually in default.
ALL of those mortgages are in MBS bonds. Another word for them is called derivatives.
Now once the mortgage goes into default the note becomes junk.
Any MBS, or CDO will likewise become junk.
Now, WHO is exposed to these MBS's or CDO's?
First, BANKS. In fact banks are over leveraged with these derivatives.
Then we have pension funds, retirement funds, to name two. Think about WHO maintains pension and retirement funds. Damn near everyone.
Let that sink in.
I am calling it right now.
An impending MBS bond market crash is coming because of the government sanctioned moratorium. This will affect everyone.
Now, lastly, the government had no place to inject itself, as a third party, into a two party contract, and dictate any change to the contract.
When it initially happened I knew the government was setting up an epic fail situation, and any mortgage holder who went along with it, unwittingly, assisted in the coming crash. Right along with the mortgage industry.
An MBS bond market crash is coming. Bank on it. No pun intended.
Banks will offer debt forgiveness as an exchange for a government backed UBI. They will do so under a global IMF policy that exchanges Government debt for National Sovereignty.
This is the "Reverse Mortgage" on our freedom that politicians already sold out for all around the world. That's why they don't care one lick about racking up as much debt as they want, and no institution in the world is actually concerned about the impending crash we all see coming. Because they already know the outcome.
Ding! "You will own nothing and be happy"!
Precisely!
This would drop new construction prices i assume? My wife and i just got back quotes to build a house that are about 100k higher than we can tolerate, even expecting high prices.
Yes. Hold off for now.
The vultures are circling.
Right?! Went to Home Depot to price some material for a building project I WAS going to do. 1/2 " OSB is 38.00 a sheet. 2x4x8's are over 6.00
WTF?!
Put that project on hold for now.
Millions of mortgages aren't being paid at all, since the moratorium was put in place.
Most people getting those checks were paying utility bills and buying groceries.
We only got the first check.
It is my opinion that it will start sooner.
Courts are reopening now across the country.
Mortgage companies will begin to blaze a trail to the courts once the moratorium expires. Then the dominoes start falling like an avalanche.
Yep, buy during a dip.
That seems logically like what i would expect, others have said the fed will do anything to avoid another 08. Sold my house in December, sitting on a bunch of cash and moving in an inlaw suite. Quotes from builders earlier this week were 25% worse than i expected and lead to an untenable mortgage considering that the house is only 2100 sq feet. I'm afraid we'll just end up with nasty inflation and my cash will be worth nothing but i can't really find a way to improve that situation. Bonds/etc run basically nothing.
All that nonsense is a distraction.
When the moratorium was announced I looked at my wife and asked her what could go wrong with this.
Won't impact us directly as we possess the titles and deeds to our properties.
Forbearance will turn into foreclosure at break neck speed, IMHO.
for•bear•ance fôr-bâr′əns► n. Tolerance and restraint in the face of provocation; patience. n. The act of giving a debtor more time to pay rather than immediately enforcing a debt that is due. n. The act or state of forbearing; the cessation or intermission of an act commenced,** or a refraining from beginning an act**.
What act? Foreclosure.
What happens if you've paid for your mortgage the whole time and didn't miss payments?
Absolutely nothing. You are good. Carry on!
Oh thats a small relief, thanks fren
Am going to call Scion Asset Management to get their opinion on this matter.
I will report their opinion here after the conversation.
The Big Short 2: Another Mortgage Boogaloo
Chance are Dr. Burry has already created Credit Default Swap positions concerning this matter.
Recently he went on a twitter rant, then deleted his account.
He went abruptly quiet.
Dude's a genius!
Yes, and that could inevitably cause a currency crash as well.
We will not recover from this.
maybe this is why the FED, and other central banks are moving to CBDC's?
Not sure if this is connected to this thread subject matter.
It is the timing of the hearings that caught my eye.
https://www.marketwatch.com/story/senate-house-to-hold-hearings-with-major-bank-ceos-in-late-may-2021-04-15
Then there is this article as well. Chase to sell 15B of a 31 year security.
Ironically the MBS bond market was created, wait for it, 31 years ago.
https://www.bnnbloomberg.ca/jpmorgan-to-sell-13-billion-of-bonds-in-largest-bank-sale-ever-1.1590849
Here is another article. I share it because of the mention of bad loans and loan defaults due to covid.
https://au.finance.yahoo.com/news/citigroup-exits-13-global-consumer-122218819.html
It's like deja vu all over again.
This time it will be even bigger than the 2008 MBS bond market crash.
The banks did not stop this. They have only enlarged it, since.
Millions upon millions of mortgages are actually in default because of that moratorium.
90 days past due and a mortgage contract goes into default. Yet we are talking 6, 9, 12-14 months past due.
Holy shit! Both Trump and Biden have set up an epic fail situation.
Just keep in mind historic interest rate on a home loan before about 2000 was around 6-8% and spiking 1975-1985 up to like 18%.
Agreed. Have ten of their reports in pdf. That shit is down right scary.
Out in the woods on property that we hold the title and deed to.
Important to read. Gives a bit of information on banks exposure to the derivatives market versus' equity. Staggering numbers.
https://goldswitzerland.com/the-2-3-quadrillion-global-timebomb/
What are some concrete steps I can take to protect myself from impending economic collapse?
First, please be advised that I am not a financial advisor, not a financial planner, nor a financial expert.
That depends on so many variables and the person.
There is not a one size fits all, cookie cutter plan out there. So I will share what we have done.
Minimized our exposure to debt. One cannot be completely debt free because money is nothing but a debt instrument. That said.
Zero'ed the mortgages, car notes, and credit cards. Have two debit cards. One with a local credit union and a major bank.
Adopted a minimalist lifestyle. We no longer consume material goods based on desire. We buy only what we need. Quit going out a lot. Curbed excessive entertainment.
Bought up nonperishable foods, beans, lentils rice.
Not a fan of gold because I know that Barclays and four other bullion banks set the next days opening and closing bell price of gold at 3:00 pm, GMT. In other words it is fixed. Has nothing to do with "supply and demand". Besides, cannot eat it. Also, food has more bartering power. Everyone likes to eat, right?
Moved to the woods 11 years ago. When SHTF we will be okay.
Keep venison and feral hog in the deep freezer.
Acclimated ourselves to the wild edibles in our area to forage.
Have a two acre garden.
Good ideas. Additionally, I leaned to cure meat just in case the power goes out and there's no gas for generators.
I haven't done it yet but I plan to get 4ish Solar panels to run only 1 high efficiency freezers. The new high end freezers pull about 2 amps. (Compared to a typical refrigerator that pulls about 8 amps)
God bless you. I guess I’ll try to finish off those car payments before shit hits the fan. I did cut off a lot of consumption and I’ve got three months food stores up. I also keep silver— I’d rather have some than not. Red pill me though: what’s the benefit a credit union would have over a bank?
https://money.usnews.com/banking/articles/the-pros-and-cons-of-a-credit-union-versus-a-bank
Thank you! I’m going to have do some research on all of this.
You are most welcome!
HELLO, TIME-TRAVELER FROM 2008.
DO YOU HAVE A SPORTS ALMENAC I MAY BUY?
So when it crashes, will home prices rise? or will it actually be a good time to buy a home?
Fall. Buy during the dip.