COMMUNISM - Calif. city to seize private property

“From each according to his abilities, to

each according to his needs.”
― Karl Marx

The People's Republic of California  -  Marxist California Democrats are on the march looking to seize the money, the private property, of banks and private individual lenders and re-distribute that wealth to voter home owners.  Emphasis on the VOTER part please.

When you rob Peter and give the money to Paul, you will always get Paul's vote.

The Leftist Democrat city of Richmond, California, said on Tuesday it will use its power of eminent domain to seize private property mortgage loans to keep its residents in their homes, becoming the first U.S. municipality to adopt such an approach.

The northern California city sent notice to the holders of more than 620 underwater home mortgages in the city, asking them to sell the loans to the city. It would buy the mortgages for 80 percent of the fair value of the homes, write them down and help the homeowners refinance their mortgages.

In the event the owners of the loans would not cooperate, the city would seize the loans using eminent domain, Mayor Gayle McLaughlin said in the Virginia Gazette.

"Residents here in Richmond have been suffering for years thanks to the housing crisis Wall Street created and which Wall Street refuses to fix," said McLaughlin in a statement.

Numerous groups, including the National Association of Realtors, the American Bankers Association, and the Securities Industry and Financial Markets Association, have already voiced fierce opposition to using the threat of eminent domain to buy mortgages.

"It is very, very discouraging to see a municipality begin the process," Timothy Cameron, managing director and head of SIFMA's Asset Management Group, said in an interview. "What this does is destroys the contractual rights of investors along with their trust and confidence in the capital markets. I wouldn't be surprised if a lawsuit is filed by investors, quite frankly."

Eminent domain is normally used by cities to force the sale of homes if they obstruct the construction of a project deemed beneficial to the wider community, such as a road or bridge.
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Richmond is working with San Francisco-based Mortgage Resolution Partners, a private investment firm that has been pitching the plan to U.S. cities and municipalities for more than a year. MRP, raising money from private sources, would work with the city to obtain the financing to buy the distressed mortgages and restructure them. MRP would receive a fee for every troubled loan it restructured under the plan

China's Credit Bubble is Bursting - Will the Banks Fail?

China's credit bubble is unprecedented in world history

• China's shadow banking system is out of control and under mounting stress as borrowers struggle to roll over short-term debts.
• The Shanghai Interbank Offering Rate jumped from around 4% towards 10% in a matter of days signaling a heightened level of financial stress.

The unprecedented level of credit expansion in China has gotten to the point where it dwarfs anything we’ve seen before with overall credit now at about $23 trillion, making a severe banking crisis a very real possibility.

Question of the day  -  No one has seen a credit bubble of this size burst.  Will a Chinese implosion shove the U.S. and world economy into some lower Hell?

With a shadow banking system that is becoming increasingly prominent, the rise of bundling of assets and securitization, and an acceleration of policy tightening, over-indebted local governments and institutions will feel the pain of a rising cost of capital, prompting Fitch Ratings to raise red flags about the future growth prospects of the Chinese economy reports Forbes.


At Nomura, where they noted that liquidity tightening is dangerous in a highly leveraged economy, they increased their probability that a risk scenario could push GDP growth below 7% this year, threatening social stability.

The world’s second largest economy could be on the verge of a dramatic financial sector meltdown that could jolt the globe.

With a “credit-driven growth model [that] is clearly falling apart” and facing the specter of “Japanese-style deflation,” the risks have definitely increased, explained Fitch’s Charlene Chu, cited by The Telegraph’s Ambrose Evans-Pritchard.

The Chinese financial sector is definitely sending out some dangerous signals. Overall credit has grown from $9 trillion to $23 trillion in the five years.

A major problem is that much of this incredible surge in credit has been channeled through the shadow banking sector, which is very closely connected to the banks.


China's Ghost Cities and Malls 

Chinese "ghost city" of new towers with no residents
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Desolate condos and vacant subdivisions uninhabited for miles, and miles, and miles, and miles of empty apartments.
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Property values have doubled and tripled and more -- so people in the middle class have sunk every last penny into buying five, even 10 apartments, fueling a building bonanza unprecedented in human history. No nation has ever built so much so fast.
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. It's the main driver of growth and has been for the last few years. Some estimates have it as high as 20 or 30 percent of the whole economy.
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There are multiple classes of people that are going to get wiped out by this. People who have invested three generations worth of savings -- so grandparents, parents and children - into properties will see their savings evaporate. And then there are 50 million construction workers who are working on all these projects around China.
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See our articles:  Chinese real estate bubble bursts
and
The Great Depression is coming to China
 

Empty homes for miles and miles and miles.