When we see that a record amount of homeowners contemplate the idea to run away and instead of fighting for their properties because they realize that refinancing their mortgage won’t do fix anything as the real estate prices are now going down inexorably, we should be very - extremely - concerned. Please take the time to sit down and click here to play the CBS video related to the latest 60 minutes show which seems to be taking side with the homeowners who have decided to walk away from their duties, as reported by Michael Shedlock on his blog. Here is an excerpt:

Steve Kroft: “It sounds complicated but it’s really very simple. Banks lent hundreds of billions of dollars to homebuyers that can’t pay them back. Wall Street took the risky debt, dressed it up as fancy securities and sold them round the world as safe investments. If it sounds a little bit like a shell game or a ponzi scheme, in some ways it was” …They cannot refinance because the value of the house fell below the existing mortgage. They say they can afford the higher payments but see no point in making them.

Matt: The value of the house keeps going down and the payments keep going up. Where’s the logic in that?

Stephanie: Why make a $3200 a month payment on a 1200 square foot home? It makes no sense.

Steve Kroft: But that’s what you agreed to do when you bought the house.

Stephanie: Fine if the value was going up. The value is going down.

Steve Kroft: You are saying essentially you are going to stop making payments.

Stephanie: The only advice we’ve gotten so far is to walk away.

The LA Times is writing A tipping point? “Foreclose me … I’ll save money”
A homeowner who can’t sell his house tells the L.A.Times, “Foreclose me. … I’ll live in the house for free for 12 months, and I’ll save my money and I’ll move on.”

Banks and lenders fear this kind of thinking — that walking away from a house could be the smart economic move — appears to be on the rise. Wachovia, in a conference call yesterday, warned investors that increasing numbers of homeowners are walking away from their homes by choice: “… people that have otherwise had the capacity to pay, but have basically just decided not to because they feel like they’ve lost equity, value in their properties…”

If we really want to sort things out efficiently we ought to regard the unfolding crisis with a centrist state of mind. Our credit based financial system has flawed our entire ’system values’.

In good times, the policy makers want us to believe in free enterprise but in bad time seem to be rediscovering socialism to resolve the issues and protect their businesses. Does this make sense to you?

The origins of the current credit crisis lie in loose monetary policy and excessive capital flows that was turbo-charged by “financial engineering” techniques used by banks. Borrowing bought more borrowing fueling price increases in financial assets - debt, equity, property, infrastructure… more

Furthermore, George Soros himself declared as of January 25:

… “The current crisis is not only the bust that follows the housing boom, it’s basically the end of a 60-year period of continuing credit expansion based on the dollar as the reserve currency,” Soros said in a debate today at the World Economic Forum in Davos, Switzerland. “Now the rest of the world is increasingly unwilling to accumulate dollars.”…

So was that all the globalization was about - a giant debt boom leading to nowhere?