Purely as a thought experiment, if we suspended mortgage repayments for N months and rental payments for N months, what bad (or good) effects might we see?
Ultimately it will damage the banks that hold the mortgages.
More than half of American retailers didn't pay their rent in April and May
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Re: More than half of American retailers didn't pay their rent in April and May
#12Purely as a thought experiment, if we suspended mortgage repayments for N months and rental payments for N months, what bad (or good) effects might we see?
A collapse of the banks I suspect and having to rescue them again.
Banks shouldn’t have a ton of this stuff on their balance sheets because of post ‘08 changes. The more likely parties to be damaged are asset managers.
Re: More than half of American retailers didn't pay their rent in April and May
#13Purely as a thought experiment, if we suspended mortgage repayments for N months and rental payments for N months, what bad (or good) effects might we see?
The whole banking system would collapse like in 2007-2008 because "everyone stops paying mortgages all at once" is basically what happened then. Renters stop paying their rent so landlords go broke. Landlords stop paying their mortgages. Mortgage-backed securities go into default. Anyone with lots of exposure to mortgage-backed securities folds. Their counterparties in all sorts of financial arrangements can't collec…
It kind of sounds like we need a different money system?
Re: More than half of American retailers didn't pay their rent in April and May
#14Purely as a thought experiment, if we suspended mortgage repayments for N months and rental payments for N months, what bad (or good) effects might we see?
The whole banking system would collapse like in 2007-2008 because "everyone stops paying mortgages all at once" is basically what happened then. Renters stop paying their rent so landlords go broke. Landlords stop paying their mortgages. Mortgage-backed securities go into default. Anyone with lots of exposure to mortgage-backed securities folds. Their counterparties in all sorts of financial arrangements can't collec…
In my country they just declared 1 year no mortgage payments for everyone who needs.
Re: More than half of American retailers didn't pay their rent in April and May
#15Earlier quoted context omitted.
This would make sense to me. Why are some businesses being shut down and have to deal with income losses and others like landlords can keep going and demand their income? This seems fundamentally unfair to me.
Ah, but comrade, paying rent itself is inherently unfair. It allows for profit off merely having bought something sooner than another had a chance to. If the rent stops now, why should the rent start back up?
I guess you're being sarcastic, but what value is being provided to society by having landlords rent houses out to people who would rather buy them?
Re: More than half of American retailers didn't pay their rent in April and May
#16Earlier quoted context omitted.
The whole banking system would collapse like in 2007-2008 because "everyone stops paying mortgages all at once" is basically what happened then. Renters stop paying their rent so landlords go broke. Landlords stop paying their mortgages. Mortgage-backed securities go into default. Anyone with lots of exposure to mortgage-backed securities folds. Their counterparties in all sorts of financial arrangements can't collec…
It kind of sounds like we need a different money system?
and whose better at designing systems than you and me?
Re: More than half of American retailers didn't pay their rent in April and May
#17Purely as a thought experiment, if we suspended mortgage repayments for N months and rental payments for N months, what bad (or good) effects might we see?
The whole banking system would collapse like in 2007-2008 because "everyone stops paying mortgages all at once" is basically what happened then. Renters stop paying their rent so landlords go broke. Landlords stop paying their mortgages. Mortgage-backed securities go into default. Anyone with lots of exposure to mortgage-backed securities folds. Their counterparties in all sorts of financial arrangements can't collec…
Doesn't seem to be happening in the UK yet, where many mortgages are suspended.
Re: More than half of American retailers didn't pay their rent in April and May
#18Earlier quoted context omitted.
A collapse of the banks I suspect and having to rescue them again.
Banks shouldn’t have a ton of this stuff on their balance sheets because of post ‘08 changes. The more likely parties to be damaged are asset managers.
> Banks shouldn’t have a ton of this stuff on their balance sheets
I don't understand what you mean - banks issue millions and millions of mortages.
Re: More than half of American retailers didn't pay their rent in April and May
#19Earlier quoted context omitted.
The whole banking system would collapse like in 2007-2008 because "everyone stops paying mortgages all at once" is basically what happened then. Renters stop paying their rent so landlords go broke. Landlords stop paying their mortgages. Mortgage-backed securities go into default. Anyone with lots of exposure to mortgage-backed securities folds. Their counterparties in all sorts of financial arrangements can't collec…
Doesn't seem to be happening in the UK yet, where many mortgages are suspended.
Not many people ended up taking up these offers. Less than 10% I think.
Re: More than half of American retailers didn't pay their rent in April and May
#20Purely as a thought experiment, if we suspended mortgage repayments for N months and rental payments for N months, what bad (or good) effects might we see?
People who make a living by renting out a room/floor would need government assistance to survive.
Yes, most places I've seen suspending rent and mortgage are also giving continuing monetary assistance as well.