Good Newsfrom Krymsk

A Russian town suffered a devastating flood recently killing 172.  More than 2,000 young volunteers responding to internet messages arrived to help.As one activist observed "It's a new story for everyone--for society to help society to solve problems without any help from the government."
NYT July 15.

Underwater Home Mortgages

The county of San Bernardino, California, is considering using eminent domain to acquire home mortgages where the principal owed is greater than the current value of the home.  Let’s run some numbers to see how this would work.  Suppose a home purchased at the height of the real estate boom for $200,000.  Today it might be sold for $100,000.  Using eminent  domain, a local government could pay the market value for the mortgage and resell it to private investors.  The bank immediately receives 100,000 rather than waiting for a costly foreclosure process and trying to sell or rent the property when there is a glut of offerings.  Homeowners now have a mortgage payment that is affordable and have no fear of being forced from their home.  Is this not a win-win outcome?

      The Securities Industry and Financial Markets Association objects emphasizing that it would be an abrogation of contract.  But, thousands of underwater homeowners are already doing that, walking away from their homes.  The only real losers would be those mortgage holders who benefit from the struggles of homeowners to keep their payments current.  For a short time the mortgage holders can pretend that their balance sheets contain the full value of the mortgages they have issued, but it is an illusion that can’t be sustained.  We need new ideas to deal with an unprecedented problem.

     

Mao & Marx

Mao must be turning over in his grave what with a new theme park being planned for Tibet.  And then there are the gated subdivisions of the super rich around Beijing with garages filled with Cadillacs.
Likewise Marx and Lenin must be wincing in disbelief at the Russian fasionistas who are the best customers for the high fashion houses of Paris and Milano.  I won't live long enough to see the next revolution, but it will surely come.