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Zombie Banks: How Broken Banks and Debtor Nations are Crippling the Global Economy by YALMAN ONARAN

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Chapter 9

To Foreclose or Not to Foreclose?

David Blanchflower, an economics professor at Dartmouth College, spends a lot of time in southern Florida, where the most spectacular housing bubble has given way to the worst bust in the United States. Blanchflower tells the story of a Florida limo driver to illustrate the problems still facing the nation’s housing market. The driver bought his house for $300,000 at the peak of the market, putting $100,000 down and borrowing the rest. In early 2011, a house similar to his down the street sold for $82,000. The driver was continuing to pay his mortgage, but questioning why he should keep doing so. “I make these payments so the bankers can pay themselves all these bonuses,” he told Blanchflower. “My mortgage ...

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