Avoiding Bankruptcy - the Banks, not Consumers
By Kurt O'Keefe, Attorney at Law on Oct 18, 2007 in Benefits of Bankruptcy, Foreclosure Issues, Mortgages
According to Helicopter Ben, a central bank has to do things that will prevent sales of assets that “will drive the prices of those assets well below their longer-term fundamental values, raising the risk of widespread insolvency and intensifying the crisis.”
Consumers filing bankruptcy are not helped by the Fed avoiding their crises, as their home values fall and they deal with their insolvency. I guess each individual bankruptcy, even as they build up to ever increasing totals, encompassing more of the country, does not intensify the crisis like the Wall Street barons getting their shorts twisted.
The above is from Fortune magazine, a great article telling us what to look for to verify no recession is coming. I have been singing this tune, the failure to acknowledge what has really happening, delaying the day of reckoning, only makes things worse, likely causing more Chapter 13 and Chapter 7 bankruptcies, again and again.
Wall Street has some $400 billion of Structured Investment Vehicles, off the books holdings of toxic sub-prime junk, according to the Fortune piece linked above.
That no one knows what this stuff is actually worth is one issue.
The recent super rescue fund is designed to continue the concealment of that fact.
Another point of emphasis by Fortune is, how does Bernanke know what the fundamental value of anything is? I am fairly literate economically, I give up.
My clients think their homes’ fundamental value is more than what they can get right now, what I call, market value, what a willing buyer would pay a willing seller.
They want to file a Chapter 13 to save a house that is underwater, worth less than what they owe.
Gee, sounds like what the Wall Street banks are doing.
Only the Fed supports them.
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