From Each According to His Inability, To Each According to His Greed
- This topic is empty.
-
Posts
-
I think the one recurring question that has been on everyone’s minds since at least 2008-09 is – what will the government do? We all know what the lar
[See the full post at: From Each According to His Inability, To Each According to His Greed]they didn’t have nearly enough equity left in their assets or dischargeable debt to justify paying the lawyers’ fees and court costs associated with a bankruptcy filing. Basically, they have already been squeezed out of so much wealth that they have been priced out of the bankruptcy process. It is really a sad state of affairs
What happens to those people?
Is the next step being hounded and scared by private collectors of debts?
Prison?
I really like your categorizing the statement as the economic version of the Golden Rule.
That really provides some objectivity and accuracy to that incredible statement.
You know, there are 2 ways people are disappointed: The first, is not getting what they want. The second, IS getting what they want!
Don LevitI think you’re drawing the wrong conclusion as to the decline in bankruptcies, especially in regards to businesses. This probably has more to do with zombie banks rolling over loans to zombie companies to avoid writing the loan off. Low interest rates makes the process easier. Also, to the extent that banks are allowing short sales or reworking loans under the various government foreclosure avoidance programs is going to reduce the number of “homeowners’ filing for bankruptcy.
I am a contractor in the Dallas Texas area. About 6 months ago I overheard a conversation between two management types at a local family-owned builder-supply business. They were dumbfounded that another builder-supply business in the area had just secured financing from a British financial institution at an !!% rate! Apparently, this other business had done this TO SURVIVE!! These men knew the complete impossibility of such a gambit and were amazed that anyone could be so foolish! Not being a shy person, I insinuated myself into the conversation. As a result, I also learned of another large building supply company in the area that can only be described as a “zombie” company. These management guys at the family-owned business were angry because Wells Fargo Bank was “keeping alive” a competitor. The family-owned business has no debt. Their competitor continues operating in the market because it apparently owes Wells Fargo so much money that the bank could not allow it to go out of business. This of course screws up the market pretty badly while putting completely unnecessary and unfair pressure on the debt-free business! Two examples from my corner of “bankruptcy avoided”.
Wait one cotton pickin’ minute here. A week or so ago, Newspeak stated that Americans just loaded up the highest amount of credit card debt during the quarter since 2007. CNBC spun it saying the the American consumer is back spending and is confident, and we had a rally that day.
As an attorney who files bankruptcies, I often wonder how many individuals cannot even get the fee to file (never mind attorneys’ fees). Of course, if their only source of income is Social Security, they probably don’t have a lot to worry about from creditors, unless they owe child support, student loans, or taxes.
jal post=4244 wrote:
they didn’t have nearly enough equity left in their assets or dischargeable debt to justify paying the lawyers’ fees and court costs associated with a bankruptcy filing. Basically, they have already been squeezed out of so much wealth that they have been priced out of the bankruptcy process. It is really a sad state of affairs
What happens to those people?
Is the next step being hounded and scared by private collectors of debts?
Prison?
The first step for these people is really just selling their assets or walking away from them altogether, as well as their loans. Depending on the jurisdiction, creditors and debt collectors may be able to come after them for the balance, and I certainly wouldn’t want to find myself in that situation, because I do think the “normal” protections we have been accustomed to will go out the window pretty quickly and we have already seen quite a few people jailed for what essentially amounts to unpaid debts – see Revisiting the Physical Risks of Debt
sangell post=4249 wrote: I think you’re drawing the wrong conclusion as to the decline in bankruptcies, especially in regards to businesses. This probably has more to do with zombie banks rolling over loans to zombie companies to avoid writing the loan off. Low interest rates makes the process easier. Also, to the extent that banks are allowing short sales or reworking loans under the various government foreclosure avoidance programs is going to reduce the number of “homeowners’ filing for bankruptcy.
Yes, that’s what I meant by keeping debtors on “the treadmill” in the post. The decline in bankruptcies is obviously not only due to people being unable to afford them (or qualify for them), but also people coerced to stay in debt via low interest rates, refinancing and loan mods, most of which is directly subsidized by taxpayers. Either way, the decline is not a “positive” economic development (for return to growth) as the pundits would have us believe.
…Boris,I think I detected a note of “sarcastic wit”in your reply?I have lost the ability to listen to any “statistic”from any one with a agenda w/o a [small] belly laugh….telling the truth is a revolutionary act now.
Just got CHS latest in the mail from ama-zone…anyone else got it yet?
Bee good,or
Bee carefulsnuffy
It certainly rings far more true to me that, rather than indicating a healthy uptick in the economy, recent declines in bankruptcies are entirely attributable to (1) banks extending even more cheap credit so they don’t have to write down the original (huge) un-repayable loan, and (2) bankrupts simply being unable to afford the basic bankruptcy filing fees and legal costs to follow through.
And it got me thinking that the only new loan customers for banks are the existing loan customers who have no choice but to refinance even bigger loans to keep going. Banks have no choice but to continue the lending game to stay solvent themselves, and so they hold hostage the customers who have big loans that cannot be repaid except by going further into debt with bigger loans. Because potential new customers, like me for example, are not setting foot inside their doors. There is no other business to be had at the moment or the foreseeable future.
Indeed, somewhere in the past two or three years something changed inside of me. My partner and I both KNOW we will never ask for a mortgage again. At this point, it has little to do with what we can afford, and everything to do with a fundamental shift in our psyche. It’s not even entirely political; although, there is some conscious desire to stick it to the banks too. Rather, it is much more of an unconscious shift, more along the lines of the endogenous subconscious changes in mood that Robert Prechter describes in his socionomics theory. I don’t even know when it happened–it’s that unconscious. After liberating ourselves from our first and only mortgage, my partner and I simply refuse on the deepest emotional level to ever get a mortgage loan again. No house seems worth the sacrifice.
The sense of relief after being cut free of major debts is eye-opening. It’s like seeing the light of atheism–once you are there, there’s probably no going back. We’ll never go in debt again, I don’t think. And are we so unusual? How many more of us in the wider population are simply swearing off the idea of debt. I think it’s contagious, just as the (vanishing) borrowing frenzy was contagious. If the new anti-debt contagion takes hold in any significant way (and I think it will), the banks are truly sunk. The existing debtor hostages will truly be their ONLY customers!
skipbreakfast,
What you said about the mortgage really rings a bell w/me.Mrs snuffy and I have had a month-long conversation about a job I need to have done and do NOT want to do…involving 1 very large a half dead maple,and one way way way big maple that threatens my neighbors shop,and my “new” orchard. 2 very large trees that need to come down.
My big saw died a while back and I only have a 14 inch bar sthil,that, while it is a nice saw,is not what you want for this project.I have a nice bid from a logger that will include cutting to firewood size….but Mama snuffy and I REALLY had to think about weather it is worth getting it done now…which will mean credit use.
We decided to sell a 85 tercel 4wd wagon and its part car to repay THE FUNDS AS QUICKLY AS POSSIBLE.but to do this as it means 20+ cords of maple… stacked… and that is one form of treasure.
Bee good,or
Bee carefulsnuffy
The folks I worry about are the ones who do not want debt, but because they have no income and no valuable assets to sell, they get stuck opting to go back to school to survive.
If you have a few resources you can stay out of debt, it’s the running out of resources that is going to get many of us. IMHO.
Ashvin: “But regardless of what we choose to call it, we must remember that 99%+ of humanity occupies the same boat here – there is no use trying to scapegoat one segment over another through the political process. // The political machinations of nation-states are all but dead now; only the natural sovereignty of individuals and their local communities remain.”
We already see the “freedom” and “liberty” people trying to set up the phony dualism of “makers” versus “takers.” The next gambit is intergenerational warfare, or “throw granny off the ventilator.”
I do not understand your last statement, though:”The political machinations of nation-states are all but dead now; only the natural sovereignty of individuals and their local communities remain.” The nation-state retains an impressive array of tools to coerce and prod the public. The point of the last graph seems to be that we are all in the same boat, and we shouldn’t blame one another… so what do you mean?
Surly1 post=4281 wrote: I do not understand your last statement, though:”The political machinations of nation-states are all but dead now; only the natural sovereignty of individuals and their local communities remain.” The nation-state retains an impressive array of tools to coerce and prod the public. The point of the last graph seems to be that we are all in the same boat, and we shouldn’t blame one another… so what do you mean?
It means that we should not expect to find fairness, justice, peace, love or any of those good redeeming qualities of humanity through large-scale political processes at this point. I’m sure a lot of charismatic leaders will emerge promising exactly those things in upcoming years, and some of them may even scapegoat what seem to be all the “right people”, but we shouldn’t believe any of them. I think those things will only come through the strength of individuals, and whatever communities they can manage to forge and sustain.
ashvin post=4285 wrote: [quote=Surly1 post=4281]I do not I’m sure a lot of charismatic leaders will emerge promising exactly those things in upcoming years, and some of them may even scapegoat what seem to be all the “right people”, but we shouldn’t believe any of them. I think those things will only come through the strength of individuals, and whatever communities they can manage to forge and sustain.
We are always well advised to beware “men on horseback” promising easy fixes.
- You must be logged in to reply to this topic.
Sorry, the comment form is closed at this time.