Half the country is still angry about the current economic situation

[eridani]

http://www.doctorhousingbubble.com/strategic-default-world-mortgages-30000-default-monthly-cash-flow-increase/

From the Kellogg surveys we find that half the country is still angry about the current economic situation and keep in mind we have just witnessed a 70 percent stock market rally. Apparently the bulk of the population wasn’t invited to the party. It is time we have our own Pecora Investigation.

Strategic defaults have also provided a short-term stimulus into the economy. After all, if you aren’t paying a $4,000 mortgage and now rent a $2,000 place you basically have increased your cash flow by $2,000 per month to buy more consumer goods. We’ve seen car sales jump up recently and we have seen spending tick up as well even though the unemployment situation is still near the trough and wages are stagnant. It would be one thing if people were spending more because they were earning more but this isn’t exactly what is happening.

Strategic defaults have a limited shelf life. After two more years, most of the crap mortgages will be wiped out of the system. Then what? I’m not sure we should be excited that a large number of people have stopped paying their mortgages and are now using freed up cash flow to buy more consumer goods. Is this the purpose of the bailout? What a farce.

The fact that we have tens of thousands of people able to pay their mortgage but not doing so tells us that many people are simply following the path Goldman Sachs has laid out. Game the system. Screw the majority. This is how the game is currently being played. Yet this isn’t sustainable. Just look at how the market is reacting with the Greece bailout (you do realize we are partially bailing them out as well?). The current system is rewarding the wrong people and the majority in the public gets this and that is why you see data like the above in surveys. Strategic defaults are merely an extension of this. What people are saying is screw this mortgage and walking away (not before they yank out as many months of free rent before the bank moves on the property). Banks have been doing this kind of crony robbery of the public for decades.