Crash – DivX Version (Normal Quality), DVD (Good Quality), PDA Version
Comments(0)
|
IMDB rating: 5.90 Plot: Since a road accident left him with serious facial and bodily scarring, a former ‘TV scientist’ has become obsessed by the marriage of motor car technology with what he sees as the ‘raw sexuality’ of car-crash victims. The scientist, along with a crash victim he has recently befriended, sets about performing a series of sexual acts in a variety of motor vehicles, either with other crash victims or with prostitutes who they contort into the shape of trapped-corpses. Ultimately, the scientist craves a suicidal union of blood, semen and engine coolant, a union with which he becomes dangerously obsessed. |
Available versions:
DivX Version (Normal Quality), DVD (Good Quality), PDA Version
Actors: Spader James,Koteas Elias,MacNeill Peter,Katz Judah,Sarosiak Ronn,Banks Boyd,Parilo Markus,Stoneham Jr. John,Drama,Thriller,
What will happen to my debt if the economy crashes?
will I still be in debt when the dollar fails or would it all just cancel out and I would be free yet broke?
just curious eh?
It depends. If we have inflation that will make your debt seem smaller ie; as a percentage of your income. If we have deflation that will make debt seem larger.
yp_kevin_houston_804 | Nov 19, 2009
you will still be in debt
insa | Nov 19, 2009
The answer by yp_kevin_houston_804 is correct. I will try to add some perspective. The risks to the economy are mostly in the form of excessive debt. All levels of society – households, municipalities, corporations, states and the national government – are under crushing debt levels. At the limit, the servicing cost of your debt exceeds your income. At that point, the game is over, and you are bankrupt.
One entity’s debt is an asset for someone else. If you have a mortgage, the discounted value (for both interest and the possibility of default) of your payments are held somewhere as an asset. The bank that originated the loan may hold it, or it may have bundled those cash flows and sold them as derivative securities.
If you fail to make timely payments, prudent accounting would require the entity holding the paper for your mortgage to write it down. It is interesting to consider what this write-down would mean. If the mortgage is sufficiently less than the value of the home, nothing really happens. The owner of your mortgage can foreclose and sell the property. Their loss is limited to the transaction costs of the sale. What happens when the mortgage is for significantly less than the balance of the mortgage though?
The only recourse that the owner of the mortgage has is to take possession of the property. If they can not sell it for the total balance of the mortgage, that is all that they get. Now, here is where it gets interesting! The money exchanged for your mortgage was created at origination. If you used the mortgage to construct the home, it was paid to the builders and other people involved in developing the property. That money is floating around the economy.
However, upon discovering that your property was worth less than the mortgage, the bank’s reserves are reduced. Too many such discoveries could leave the bank with fewer reserves than it has deposits. In other words, it is insolvent. The FDIC is supposed to step in as soon as insolvency is detected, but it is interesting (and alarming) to note that bank failures resulting in FDIC takeover have often resulted in as much as 50% deficiencies of asset values to reserves.
The FDIC has some reserve to cover these losses, but at a point (and not too distant, it only has about a half percent reserve for all of the potential losses in the system) its reserves will run out. Most likely, Congress and/or the Federal Reserve would step in at this point. But the salient fact is that defaults litterally take money out of the economy. The money is created when loans are made, and if they are eventually revealed to not be sound loans, money is destroyed when they default.
In the interests of brevity (I like writing about this stuff, but perhaps you don’t like reading it?), I’ll jump ahead a little. Defaults can have a cascading impact when a society has reached an excessive debt load. Because most financial institutions are leveraged to each other, the insolvency of one entity means a reduction in value (if not the total loss) of assets at another. To consumers such as you and me, this flows through in the value of our assets (home values would drop along with stocks, mutual funds, retirement accounts, etc.) and would also show up as higher servicing costs to our debt – the institutions that survived would surely jack up rates defensivly [1].
In this deflationary scenario, we would see the return of "cash is king" mentality. Not only would your existing debt be a heavier burden, but you would not be likely to obtain new credit. The only silver lining to a deflationary collapse would be if prices were also allowed to fall. Alas, such an event would be catastrophic to the interests that most influence government even though they would help you and me. They were not allowed to fall during the Great Depression, and I don’t expect they would be now judging by the actions of the current and recent administrations [2].
You may have heard during the crisis last year that financial firms were suspending mark-to-market accounting. This means that they could ignore actual market values for their assets and hold them at the book value (essentially, though not exactly, the value assuming no default). A year later, when we see banks failing, we are still seeing them with 40% and 50% deficiencies in their reserves. In essence, official accounting practices are lying. The value of these assets was not due to some temporary "liquidity crunch" but reflects the inability of debtors to services their debts. Officials are responding to the debt crisis by issuing more debt. This can avert disaster for a time, but if nothing fundamental changes in the meantime, it will only intensify the pain later on.
There is the potential that monetary officials could respond to all of this by debasing the currency (i.e. printing more). I don’t think that they would do this as it could easily lead to hyperinflation. The more likely
Joe S | Nov 19, 2009
