Comments on: Let’s All Just Walk Away http://loanworkout.org/2009/11/lets-all-just-walk-away/ Loan Modification & Home Loan News Fri, 19 Mar 2010 20:49:15 -0700 http://wordpress.org/?v=2.9.2 hourly 1 By: expres12 http://loanworkout.org/2009/11/lets-all-just-walk-away/#comment-18154 expres12 Mon, 23 Nov 2009 18:05:58 +0000 http://loanworkout.org/?p=6936#comment-18154 Early last year, Roubini suggested an across the board mortgage haircut for all homeowners. In my opinion, this would have been far more effective than any of the economic stimuli and bank bailouts to date. The powers that be refuse to do what is necessary. That namely is to let the banks fail. Banks of any size, large or small need to die if they are dead. All of the pain we are presently experiencing is due to the artificial life support for entities that are by classic definition, dead. I'm not sure if I agree with White and Roubini on the haircuts. But they would be no worse than what we have now. I do disagree with White's assessment that artificially low interest rates will drive down housing costs. After all, it was artificially low rates that caused the real estate bubble to begin with. Early last year, Roubini suggested an across the board mortgage haircut for all homeowners. In my opinion, this would have been far more effective than any of the economic stimuli and bank bailouts to date.

The powers that be refuse to do what is necessary. That namely is to let the banks fail. Banks of any size, large or small need to die if they are dead. All of the pain we are presently experiencing is due to the artificial life support for entities that are by classic definition, dead.

I’m not sure if I agree with White and Roubini on the haircuts. But they would be no worse than what we have now. I do disagree with White’s assessment that artificially low interest rates will drive down housing costs. After all, it was artificially low rates that caused the real estate bubble to begin with.

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