The Banks Master Plan

Discussion in 'Economics' started by peilthetraveler, Feb 24, 2010.

  1. This thought just came to me about a minute ago. The banks have been holding onto these houses and not putting them back on the market. Of course people are saying its because they dont want to flood the supply of homes and push the price down further, but this would mean they would have to hold for not only after we recover, but for years further down the road as it almost doesnt matter when you sell the houses, if you have that many, you are always going to flood the market with houses no matter what type of economic environment you are in and selling 1 or 2 at a time when you have 1000s of homes would take decades to get rid of them all. Then it occurs to me...if the banks are planning for hyperinfllation...then of course they want to keep the houses. Thats their real assets. They dont want to buy billions of dollars worth of gold because that would freak people out and people would say "Hey! The banks must think we are going to have hyperinflation because they are buying gold!" But if they are just holding billions of dollars worth of homes, then it doesnt look like they are planning for hyper-inflation and they can go on with business as usual, trying to make a buck. They are basically hedging themselves for both sides...deflation & hyperinflation. They are holding all that cash and not loaning it out for the deflation that may occur and holding all those homes for hyper-inflation. They just have to hold out a few years and they will make out like bandits no matter which way the economy goes. Even if it goes sideways they are making bank (no pun intended) with the cheap money they are getting.

    Its actually pretty brilliant if you think about it. Imagine..they are set up to make a killing, no matter which way the economy goes from here.
  2. logikos


    Hmmmm.... interesting.

    At this point, there is nothing that is beyond believable. You might be onto something. Or maybe not. Only time will tell.
  3. 1) You're giving "credit" where it isn't due.
    2) Banks thought they were positioned to make a killing, no matter which way the market moved, at the top of the previous bull market too. :D
  4. zanek


  5. All the top holders of gold ETF's and gold miners is Wall Street.

    Doesnt has to mean anything people tell me, cause the official disclosure of their holdings is just peanuts compared to their real portfolio.
  6. moarla


    if there will be hyperinflation, nobody can afford to buy a house....
  7. I can still see homes dropping in value in a hyperinflationary scenario. It was the artificial mortgage market that drove up house values in the past. And that's being corrected now.

    Commodities, OTOH, will skyrocket over the long term.
  8. 1) Tell that to long-term shareholders of C, BAC, BSC, JPM, FNM, FRE, ABK, LEH, MER, MS et al.
    2) Do you thpeek with a lithp? :confused:
  9. There's no master plan.
    In fact banks have no plans at all.

    You forgot: What will happen when they try to sell all those homes some years down the road, when homes need expensive reconditioning due to all the time been unused?
  10. the1


    Exactly. When you let a car sit out in the cold it dry rots. You start it up and you got oil and fluids all over the driveway. The same thing happens to a house. If you don't run water through the pipes for a certain length of time then....then hopefully the chump who buys that house knows a good plumber.

    #10     Feb 24, 2010