@Pricknick

I believe the banks know that when the market goes south they'll get these homes for pennies on the dollar while the owners go into bankruptcy.

Will likely be the pension funds and such that will have bought up the securitized debt. And those who are or supposedly will receive benefits from such funds. People like, umm, me....

Time was, the banks were assuming at least some of the risk, now it seems they get to offload it as soon as the loan is made.

Apparently Japan has upped the percentage of foreign investment that some of their biggest pension funds are allowed to hold considerably and put the Norinchukin Bank, already one of the biggest investment players in the world in charge of handling overseas investments and it has partnered up with Goldman Sachs...

Gee, what could possibly go wrong? Or, wrong again - Norinchu, which is the bank for thousands of Japanese fishing, forestry and farming cooperatives lost hugely in 2008-9, now they have even more money to play with.

Excerpted bit from an interesting 2019 editorial on a Lyndon LaRouche site:

As Lyndon LaRouche repeatedly emphasized, prior to his passing earlier this year, what we are seeing today is not merely a “system-wide” crisis, but a terminal systemic crisis—a disintegration of the entire British imperial monetarist system, under the weight of hundreds of trillions of dollars of speculative debt, combined with a failure to maintain necessary investments into the physical economy. See Lyndon LaRouche’s “Typical Collapse Function.” Since 2008, driven by the policies of the City of London, the de- regulated banking/financial system has created a buildup of unsustainable levels of debt in all areas—corporate debt, government debt, household/consumer debt— which forces investors to seek ever-higher returns, meaning they turn to ever-more- risky investments, to make enough profit to cover their debts. In this process, everything becomes “securitized,” creating new instruments for speculation. This specula-
tive frenzy is now hegemonic.

As with Mortgage-Backed Securities in the lead-up
to the 2008 Crash, so-called “innovative financial in- struments” are launched, with little or nothing of value to back them up, and no way of knowing their real value, except what frenzied traders will pay. One of these is Collateralized Loan Obligations (CLOs), which are securities produced from bundling leveraged corporate loans—including loans to zombie companies!

A report in the Italian financial daily Il Sole 24 Ore, and a follow-up in Bloomberg, identifies a Japanese bank, Norinchukin Bank, which has been heavily involved in CLOs, as one of the other
afraid of a highly interconnected Wall Street firm making an intra-day bankruptcy filing and catching everybody by surprise.

If that’s what’s worrying the risk officers at J.P. Morgan Chase, it’s also worrying the risk officers at Goldman Sachs, Morgan Stanley, Citigroup, Bank of America and every other major bank on Wall Street.

Therefore, J.P. Morgan Chase pulled back, dumping a subsequent liquidity crisis into the lap of the Federal Reserve, in its role as “lender of last resort.”
Even with the Fed pumping in anywhere up to $100 billion per day to protect against an “intra-day bankruptcy,” in which a surprise announcement would leave lenders stuck holding the worthless assets of its customers—as happened with Lehman Brothers in September 2008—it is not enough.

A report issued by Bank of America Merrill Lynch, as reported in
the Financial Times, explains why. According to the Financial Times article, “Beware the Dawn of the Corporate Dead,” “Bank of America Merrill Lynch estimates that there are 548 large or mid-range “zombie companies” in the trans-Atlantic region that need daily infusions of cash to avoid bankruptcy. A zombie company is one whose annual earnings cannot cover the interest on its debt. Corporate debt is one of the explosive trigger points in an increasingly stretched financial system, as it is estimated that more than 40% of new bonds issued by corporations are traded at or near junk bond levels...

As with Mortgage-Backed Securities in the lead-up to the 2008 Crash, so-called “innovative financial instruments” are launched, with little or nothing of value to back them up, and no way of knowing their real value, except what frenzied traders will pay. One of these is Collateralized Loan Obligations (CLOs), which are securities produced from bundling leveraged corporate loans—including loans to zombie companies!

A report in the Italian financial daily Il Sole 24 Ore, and a follow-up in Bloomberg, identifies a Japanese bank, Norinchukin Bank, which has been heavily involved in CLOs, as one of the other possible causes of the current liquidity crunch. Norinchukin became a major player in high-risk CLO trading to make up for losses due to the effects of the negative interest rate policy of the Bank of Japan. It currently holds almost 10% of the global CLO market.

When the Bank of Japan warned that prices of CLOs might fall due to changes in market conditions, the bank began selling off its holdings, taking away from the usual flows of money from CLO trading into overnight lending. In its Nov. 12 coverage of the issue, “Japan’s biggest CLO Investor Cools on $750 Billion Market,” Bloomberg concludes that, “At the start of the year, Norinchukin’s CLO purchases were critical in both the U.S. and Europe after the leveraged-loan market seized up,” thus affecting the repo market liquidity.

This is not a problem located in Japan: Norinchukin Bank’s counterparties include major French banks BNP Paribas, Société Générale, Crédit Agricole and BPCE.

Of note, also, are the comments of former IMF Director Carlo Cottarelli, who joined the chorus of those supporting more liquidity pumping in the European Union. In a November 17 radio interview he said: The European Resolution Fund [ERF], which is being created, is small and is growing slowly. What they say is: As long as the ERF has not reached a dimension big enough to bail out banks—all banks—we need the possibility for the European Stability Mechanism to jump in with its money to avoid insufficient funds to support the European banking system.

This may explain the about-face of the Angela Merkel government in Germany in joining the call for a centrally run ERF, as there are increasing fears of a crash of Deutsche Bank in this moment of escalating instability.

The hope that the “continuing strength” of the U.S. economy can pull the world out of a deepening “recession” is proven to be a delusion by new monthly figures that show a slowdown in manufacturing, trade, transport of goods, and consumer spending in the U.S. While many phony reasons are proffered—trade war with China, the uncertainty surrounding the impeachment of Trump, climate change (!)—the reality is that the debt crisis reveals the depth of the collapse of the
physical economy of the U.S.

The four-decade-plus shift of the United States from a scientifically and technologically driven economy, with constant improvements in productivity, to a post-industrial rust heap, in which the only “wealth” produced comes from changes in fictitious “market” valuations produced by speculative trading, is now hitting the American people with a vengeance.

Source

And all of that, plus demographic implosion even before all the Corona virus insanity.

that some banks are giving loans that roll the down payment into the loan itself.
There's a young couple down the road from me that purchased a two hundred thousand dollar home with no down payment. Their combined income is less than 40 grand.
I believe the banks know that when the market goes south they'll get these homes for pennies on the dollar while the owners go into bankruptcy.

@earthling1
Burn it, baby, and never be a billionaire again. I would be ashamed to be a billionaire. Shame on you ! Get poor immediately.

I'm here to tell you how hard it is to find a safe place to keep my wealth.
I can't keep it all in Greenbacks because I would need a vault the size of a mansion to begin with. And security personnel would be a slow drain on it, plus the value of it continues to plummet.
I can't find anymore stocks to buy because all the corporations have bought back their own stocks. Besides, the market could crash at any moment.
Real estate is skyrocketing, but its just a gamble that increasing value will hopefully outweight the slow drain of property taxes. And the dander of a market crash.
Gold is an option and would require a smaller vault. But other billionaires holding gold could dump theirs and render mine near worthless.
What to do what to do what to do?
This is really difficult and perplexing.
It causes me untold worry and I am constantly fretting over it.
And don't get me started on whom of my heirs to leave it to because I DON'T EVER WANT TO DIE.
Poor me.
s/