| Subject: | [socialcredit] Re: Michael Hudson in his profound wisdom | | Date: | Wednesday, June 13, 2007 07:50:50 (-0700) | | From: | william_b_ryan <william_b_ryan @.....com>
|
Michael, the issue isn't about bankruptcy, as such,
but that that subprime mortgage lending empirically
involves risk, which you denied. The fact that some
insiders may have gotten out okay does not obviate
that fact.
I will also dispute your larger point about interest
as not being in payment for risk. Certainly, the
larger part of it is a kind of insurance premium,
reflected in the variation in interest rates, for the
risk of default, such that those who do not default in
a particular risk category will pay the amount of
default by those who do default.
There is of course a mark-up over this cost. But the
cost will nevertheless exist even in a "profitless"
financial system.
Bill
--- Michael Hudson <michael.hudson@earthlink.net>
wrote:
Bankruptcy is no problem for these subprime lenders.
For them, bankruptcy is a business decision. They've
already paid out their high earnings and bonuses to
their managers, taken the money and run. Bankruptcy
leaves an empty shell for the suckers whom they stuck
with these mortgages packaged like sausages to sell to
the pension funds.
MH
On 6/12/07 4:31 PM, "william_b_ryan@yahoo.com"
<william_b_ryan@yahoo.com> wrote:
Michael Hudson in his profound wisdom: "If you look at
the subprime mortgage crisis today, you see that the
risk is on the borrower, not the lender."
----------------------------------------
-----------------------------------------
Then perhaps he will explain this:
F_A_I_R__U_S_E__C_L_A_I_M_E_D
April 2, 2007
Major subprime mortgage lender files for bankruptcy
The Associated Press
New Century Financial Corp., once the nation¹s
second-biggest provider of higher-risk mortgages,
filed for Chapter 11 bankruptcy protection Monday and
fired 3,200 workers ‹ more than half its work force.
A casualty of the slumping housing market and
aggressive lending practices, New Century also said it
plans to sell the company¹s major assets. The firings
would better position the company for a possible sale,
the company said.
New Century was the latest so-called subprime lender
to fall on hard times amid a spike in mortgage
defaults caused by borrowers unable to make payments.
Subprime loans go to people with shaky credit
histories, offering higher profits along with higher
risk to lending companies.
More than two dozen subprime lenders have shut down in
recent months and others are scrambling to stay in
business. New Century was once the nation¹s
second-biggest subprime lender by loan volume.
-
---------------original message------------------
Re: [gang8] creditary economcs, interest and inflation
I disagree, Chris. But I've given up trying to reason
with you.
8 centuries of economists tried in vain to define
interest as payment for risk. If you look at the
subprime mortgage crisis today, you see that the risk
is on the borrower, not the lender. Your past as
public relations hack for the banking sector is
showing in trying to rewarm Thomas Aquinas.
Governments for the past century have set interest
rates to balance international payments, or for other
reasons. Credit creation is a monopoly, and you
yourself have pointed out the insipid character of
supply and demand curves. You can speak for yourself,
but do not have the effrontery to try and speak for
others.
Michael
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