However, this plan largely bails out the banks. The banks, though, employed the loan officers and enabled the mortgage brokers who were the agents of evil on the ground. The banks should really take the hit, here, and if we lose all of our large banks, so be it. Losing all but one might be a problem, but that's not super likely.
I've been trying to think of a better bail out plan. Maybe every house with a mortgage can be put up for auction, at the 'owner''s discretion. The 'owner' retains the option to match the highest bid, and can apply his or her existing equity to the purchase. So, it's a massive price resetting.
I don't know where you'd get all the bidders, and I certainly don't want these imprudent buyers being rewarded with good deals on houses, but the houses are there, anyway.
In other news, the AGU Greenland news puts a crimp in my plan.
The Jacobshavn Glacier on the west coast of the ice sheet, a major Greenland outlet glacier draining roughly 8 percent of the ice sheet, has sped up nearly twofold in the last decade, he said. Nearby glaciers showed an increase in flow velocities of up to 50 percent during the summer melt period as a result of melt water draining to the ice-sheet bed, he said.Well, OK. We already knew the Greenland ice sheets were going to melt and drown Manhattan, and we already knew the IPCC grossly understated the speed at which this would happen. But, the idea that the Artic Polar Ice Cap will be gone in 7 years has a way of arresting the attention.
Greenland is about one-fourth the size of the United States, and about 80 percent of its surface area is covered by the massive ice sheet. Greenland hosts about one-twentieth of the world's ice -- the equivalent of about 21 feet of global sea rise. The current contribution of Greenland ice melt to global sea levels is about 0.5 millimeters annually.
So, say that the financiers have crappy bonuses this year, and next. And say that Manhattan housing rationalizes by mid-2009. It will have zero resale value. Zero. The immense amount of work required to adapt buildings to having their lower few floors under water is going to cause a lot of disruption in these prices. When President Romney moves the capitol to Salt Lake City, it's going to pretty hard to sell an apartment in a Manhattan brownstone.
The actual process of drowning is going to be kind of unpleasant. I've been practicing my crowd running and bridge running, but I'm kind of obliged to stay on the island and open a shelter while the shock wave is slamming down Long Island Sound. Well, we all have our crosses to bear, but I'll leave you with this story.