Italian Banks to Freeze Mortgage Payments for Unemployed

Looks like the Italians are helping out their home owners. From Italian Banks to Freeze Mortgage Payments for Unemployed:

The Italian Banking Association (ABI) on Wednesday decided to allow mortgage holders who are in serious economic difficulty to suspend payments for up to one year.
Local media said the measure will go into effect in January and will apply to three categories of mortgage holders who are now unemployed following the economic downturn.
To benefit from the payment deferment mortgage are holders who have simply lost their jobs, who are on temporary lay-off plans, who were self-employed but have fallen out of business and who have lost family members whose income supported the entire family.

According to the article, the Italian housing market isn't the bomb like the U.S., but look at what the Italian government is reacting to, an unemployment rate of 8.4%, expected to peak at 10.7% in 2010.

Now isn't the U.S. already at 10.2%?

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It seems that Europe is responding to this crisis

much better than we are. Their approach to regulatory reform, while still being worked out, is starting off much more aggressive than we are.

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EU is in recovery too

I agree with Rebel, EU is way more aggressive and taking action plus they did quite a bit to help their workers, unlike the U.S.

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Germany is faring far better than the rest of the continent,

and that has a lot to do with the Kurzabeit program. It's short time work. Basically, the idea is that firms cut work hours.

So let's say that you are a firm. You employ 10 workers at 40 hrs a week. That's 400 hrs work time.

The economy goes south, and now you only have the orders to support 280 hours work time. In America that would most often mean that you would lay off 3 workers, and keep the other 7 on full time.

In Germany, what they do is cut the workweek down from 40 hours to 28 hours. The government covers (with as I understand it, matching money from the firm) 12 hours of pay. So everyone stays on the job. Skills are quickly lost when layoffs occur, but keeping people on the job prevents a macroeconomic shock, and primes the economy for the recovery.

There is no down time needed to recover skills, like when you layoff, and them have to bring new people up to speed when the recovery occurs.

It's an ertzatz Keynesianism. Taming the business cycle, so that the process is creative, while leading to less destruction.

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better system!

Right now we have our own "private" system, where companies deny full time hours and there is no additional pay. They do this to deny full time benefits as well as wage increases.

That sounds like a much better idea. That way at least the skill sets are not lost.

One attitude in the U.S. that simply has to cease, is this entire view of workers as disposable diapers.

They don't seem to care or get that workers are the company, they are the skills and expertise.

They seem to believe that they can import, or offshore outsource or whatever....that there is an unlimited supply of labor, fully trained...they don't have to do a damn thing.

Meanwhile China looks like the U.S. 20 years ago in terms of activity and growth....and skills and the U.S. is more and more looking like a 3rd world country.

How long do they believe Americans will remember these advanced skills? How long before they realize that younger workers need experience to obtain those skills?

Doesn't it seem like if it's really stupid policy, America will enact it and anything that is common sense or practical, you can be sure it will not happen?

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Tom, nice find

But can I make a request to format your links. Over on the right hand side of EP is the user guide, which shows you the HTML code to format a link.

Also, you can lick on the rich text editor link, below the post body and have a GUI which has little formatting buttons to help you. If you hover your mouse over each button, it will tell you what it is.

Nice find!

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I will try

Robert,
Thank you for your kind words and advice.

I’ll try that format thing. But, understand I came of age with note cards and dreaming of someday owning an I.B.M electric typewriter. This computer thing is a mountain to climb. I think HTML, and my hands get clammy.
But, I will try.

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you can do this

try the rich text editor to help or just learn how to format two things.

Also, if people get really stuck on formatting and also understanding the blog rules, EP has an email system and I'm around to help.

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Barney Frank: Give extra TARP to unemployed homeowners

plan to make loans to unemployed home owners and use TARP funds to do it.

How about a plain freeze? Sounds more economical, what the Italians did.

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How about some principal reduction for distress mortgages

Let's get serious about this foreclosure problems and fix the horrible current modification loan program of the Obama Administration.

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they want to re-inflate the housing bubble

The reality is home prices are too high for the average, never ending, shrinking paycheck and wages. So, anything that acknowledges that....they don't want to do it. It means deflating the housing bubble and it means major losses for MBS and mortgage holders.

i.e. such a move would put housing prices down, extensively, but also put prices more in line with what people really can afford.

My 2¢

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Yes, it would.

And it would require that financial conglomerates/financial oligarchy experience some pain. And Washington elite don't want to cause any pain to them and piss off their meal ticket.

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And that is way neo-liberal policies are still alive

with the Obama Administration. I guess it's too much to have real demand created by employing people and re-establishing link between wages and productivity. Nah, that would be too bold. And piss-off his Wall Street benefactors.

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