News: Sharp rise in overdue mortgage payments

More than a fifth of UK homebuyers who have a chequered credit history have fallen behind on their mortgage payments and even those with top-quality ratings have seen a statistically significant rise in delinquencies in the first three months of this year.

New data from Standard & Poor’s provides the first glimpse into how mortgages are performing this year. It is based on the behaviour of homebuyers whose loans have been packed into mortgage-backed securities – which accounts for 80 per cent of the £43bn subprime mortgage market.

Of all loans to borrowers with poor or no credit history, total delinquencies – defined as arrears of more than 30 days – made up 21.73 per cent at the end of March while those seriously delinquent by 90 days or more, including some already in foreclosure, edged into double digits at 10.60 per cent.

The figures show that more than £7bn worth of loans are at risk of default unless lenders agree to modify the loan terms. S&P believes that the loans backing the securities it rates are a representative sample of the market as a whole. The rise in subprime arrears threatens further problems not only for the economy but also for those financial institutions that bought securities backed by the loans.

Potentially more worrying is the small but notable increase in delinquency rates among prime mortgage-holders.

An Example of the Damage the "welfare" state does to a country.

http://news.bbc.co.uk/1/hi/uk/7421045.stm

When the woman entered the UK in March 1998 under an assumed name, she was seriously ill and was admitted to hospital.

So she's been here for 10 years at 25,000 per year. Total 250,000 Pounds.

The high taxes to pay for the NHS discourage decent migrants, and the NHS free treatment encourages the worst immigrants to the U.K.

Geonomics

Geonomics:
Geonomics is a political/economic system that understands that economies run on the exchange of time, and that governments are extremely bad at doing anything other than force.

Governments have diworsified into vast areas of life. Areas that the government runs it runs extremely badly. The ways that government raises money cause huge economic damage, and the ways that government spends the money cause huge social damage. Government should be used only for externalising problems, such as pollution, crime and defence.

A Geonomic government would treat everyone equally. Instead of paying out when people make mistakes (what governments call social-insurance*), geonomics pays every citizen a regular citizens dividend. This is raised by taxing the right to exclude i.e intellectual (patent/copyright) and physical property tax.

With 8 Trillion of Property to tax at 7% per year each UK citizen could get a dividend of over 9 thousand pounds! The average person, should be able to live in the average house.

Market Geonomics:
Market Geonomics allows the owner to set the price of their property, and they are taxed at a percentage of that value. However to make sure the price is not set artificially low anyone can buy the property, with a delay (say 2 years for physical). This would solve a lot of planning permission problems and speed up compulsory purchase etc. and ensure a much more efficient utilisation of land. For intellectual property this would ensure much more sub-licensing of patents in order to make the patent work, instead of using it as an attempt to block competitors.

Any country using geonomics would be able to lower their investment interest rates as the geonomic tax would act like an interest rate. This would mean that houses would be more affordable(Av Wages/Av House Price), and that speculative house price bubbles should be much less likely to form.

Education:
Parents would be responsible for paying for the education of their own children. Government would lend parents the money (Government would become a net lender instead of borrower and thus take inflation more seriously), only the interest payments would come out of the parents citizens dividend. As parents would be choosing schools and paying for their child's education, they would tend to take far more interest in the standard of the teaching, rather than using them as a subsidised crèche, this should lead to higher educational attainment, as well as an end to poorer parents being priced out of schools because they cannot afford a near enough house to a good school. By the time each child has left school their accumulated citizens dividends should make a sizeable fund to let them purchase job relevant training or a university education.

Health:
Each citizen gets a dividend, this would be topped up depending on the cost of catastrophically insuring a fit person of their age and sex. This would ensure that the moral hazard of the NHS is removed. It would also allow you to decide not to pursue terminal low chance treatments and enjoy your last times. If someone was not watching their health they would hopefully notice the extra payments they have to make to purchase insurance and decide to do something about it.

Employment:
As there are no taxes on Income, there are no barriers to earning, so more people would work, and more people could be employed. You would keep 100% of the money you earn, and the government would not need to pry into your private financial details. Hopefully more people would find the security of the citizens dividend to setup their own small businesses.

Retirement:
Retirement would mean that you just take the citizens dividend. There would be no ageism with regard to forcing people of a certain age from their work.

*as normal Social-X means the opposite of X.

Economics

Economics:
Most people see economics as about goods. They are wrong, economics is about the use of peoples TIME, specifically when they freely exchange it with others to both parties mutua advantage. Goods are merely the products of that time. Comparative Advantage shows that the more time that is exchanged voluntarily, the more productivity increases and thus living standards are raised. The more the exchange of time is hampered say through income taxes/national insurance/VAT (value is added through work) or through crime (theft & slavery) the more the economy will suffer.

Money:
Money is temporal barter it represents the economy it is used within. With barter, people exchange their time , however using money allows them to utilise other peoples time when they actually need it, rather than at the moment of exchange. This is much more productive, and that's why societies that abandon money get out-competed.

Debt and Credit:
Credit is the use of another persons time in the future. Debt is the use of your time in the future. When to borrow? When your utility is increased by borrowing! i.e. At the time in the future when the money is paid back with interest, you have a higher utility than if you didn't borrow. One of the best examples of useful borrowing is for education, however most people wrongly think that subsidising education is better.

Inflation:
There are two types of inflation, Price Inflation and Monetary inflation. Price inflation is caused by Price = Demand/Supply. This system is chaotically stable as changes in price cause lagged changes in supply which bring the equation back into balance. However speculative bubbles can form when the demand correlates with the price(i.e people "invest" because the price has gone up), this can form dangerous runaway cycles, both up and down in price! Monetary Inflation is caused by increasing the amount of monetary units in the economy If this expansion is "Adiabatic" then each monetary unit represents less of the economy, i.e. its value is lessened. However the economy tends to get more productive so a certain growth in monetary unit numbers, means that they tend to have the same utility. A small amount of monetary inflation is useful, because otherwise people could just sit on their monetary units and see it grow in value. This would eventally stop people exchanging their time and the economy would sieve up!