Fuck, had I thrown this rumor out there in this afternoon's post, I'd look creepy level precognitive. Then again, they've been reportedly circling the bowl for a while, with the signal to noise ratio jumping this week.
2nd largest US bank failure in history, FDIC will need 4 to 8 billion US$ to fix this one, approximately 10,000 customers with the bank had uninsured deposits.
Fuck me running.
http://www.bloomberg.com/apps/news?pid=20601103&sid=atrd9_l.GrL8&refer=us
Spare cash. How many of you have it right now? Raise your hand if you have some…boy, not a lot of hands. The period of time we are entering is something we shouldn’t fear, but we should be very cautious, concerned and level headed. If everything goes to hell and the powers that be flush the toilet, we will all sink. This power is in their hands, not ours. Keeping your head above the water while we circle the bowl is the key. Can we keep up with inflation and can we keep our heads about us? Can you do those things?
I’ve mentioned in many posts in the past that we all need to re-evaluate how we live and how we survive on a daily basis. The way we shop for the necessities of life such as food, and how we get from point A to point B are examples. Some of it is just simple frugal living and some of it is just common sense. The chances of more drastic and desperate changes are possible if you read the tealeaves.
Economists have been giving a lot of conflicting reports on the health of the economy over the past few months. The same economists who just 6 months ago were telling us the housing crisis had “bottomed out” are now saying they don’t understand why the American public is so “negative” toward the economy. Eleven months ago, the Chairman of the White House Council of Economic Advisors, Mr. Edward P. Lazear said, “We believe that the economy is back on track” and that the economy was “recovering and robust”. Just last week the Royal Bank of Scotland (RBS) warned investors that there is a 25% chance of a total crash of the stock, bond and commodity markets within the next 90 days.
The eggheads, waterheads, knuckleheads and greedheads that comment on the state of economic affairs we find ourselves in today, are the same people who led us to this point. None of them can tell us the truth of the matter since the truth is rarely factored into their equations. Get them all into a room and ask them if de-coupling has occurred. They don’t know who’s lying, who’s covering up and who’s hedging a bet or trying to cover a short.
If it weren’t apparent to you when New Orleans drowned, let me clue you in. We are all on our own. Big Daddy isn’t going to step in and save our collective hides. Big Daddy is taking care of himself and will be protected no matter which way the wind blows in the upcoming shit storm. The rest of us Joe 6 Packs will get by as long as we have clarity of thought, and put thoughts into action with a deliberate purpose.
If you have flour, beans, spices and seasonings in your pantry; if you can cook from scratch and don’t mind eating small portions where nutrition is the emphasis. You will survive the worst. If you don’t mind riding a bike, doing manual labor or fixing it yourself; foregoing career for a living wage and having multiple irons in the fire for earning money. You will survive the worst. If you can do those things and have the balls to run in the opposite direction that everyone else is running, you have an opportunity to create the foundation of wealth.
What I am saying is that we have not seen this sort of harsh economic outlook for generations. The prepared will not only survive, but will flourish. Too many people are desperately trying to maintain a lifestyle that they could not sustain in the first place. One by one those people are falling off the cliff into financial ruin. The rest of us are cutting corners, and using those proceeds to prepare ourselves for the upcoming months and years. Until cash as we know it is dissolved into some other form of currency, cash is still king. Those FRN’s will still buy goods and services. Fools are dropping cash into precious metals right now. The demand is high, the cost is high, they are paying with a devalued dollar and they don’t see that. The speculation for food and oil futures isn’t so much a cash cow of the wealthy, as it is a last ditch effort for the worlds financial houses to cover their losses right now.
Go back in history, find the people who made the foundations of their wealth in troubled financial times and you will see the path through this. When everyone is selling, you should buy. When everyone is running to the car lot to buy a hybrid, sit tight on your own car. When everyone is trying to dump their McMansion in the burbs, look at renting, renting to own or buying an unaltered, un-remodeled ranch house. When everyone is grabbing Bisquick and instant rice off the shelves, buy powdered milk, instant potatoes and dry beans. Go against the flow, you’ll pass a lot of scared herd occupants who have no clue of where they are heading.
If you are an “outsider” or have lived an alternative lifestyle for decades, the world is about to come to your level of existence. Be prepared for questions from the newbies. If you are an old hand at thrift stores and yard sales, be prepared for the former Saks Fifth Avenue buyers invading your territory. If you are about to enter our world, leave your attitude and upscale lifestyle stories at the door. We won’t help you with advice if you come to us acting like assholes. I’ve been seeing yuppies acting haughty in the very places they loathe but now rely on to survive.
I hit yard sales and thrift stores every week. I’ve been doing this since the 80’s. Over the years I have picked up antique and vintage furniture for pennies on the dollar. The only new pieces of furniture I have are the mattress I sleep on and the vintage styled La-Z-Boy in my living room. I pay for my gas, food and most of my utility payments every month by selling things I have bought over the years at these sales. I’m saving my best stuff for brighter days, just as I did in the 80’s and 90’s.
The difference between my past yard sale and thrifting experiences and today is that the best stuff is harder to come by than it once was. That will be changing very soon as the folks who paid outrageous money for some things 10 years ago, are trying to dump them in a down economy. I’m waiting for all those Deco armoires that people bought and made into home entertainment centers, to flood back on the market. They think they’ll get $600 for them, just like they paid for it in 1998, but they are in for a surprise when dealers tell them, “You ruined it when you cut a hole in the back to run electrical wires. I’ll give you $50 for it.”
I’m already seeing northside suburban women horrified to learn that the Jadite they bought in 2000, because Martha Stewart had it, is actually worth 1/10th what they paid for it originally. They have no concept that Anchor Hocking made a TON of Fire King and the Jadite line just isn’t rare. It’s actually a bit eye opening to see an educated and apparently intelligent person, look tight lipped and terse when someone walks away from a $160 Jadite compote. I actually saw that at a yard sale. Another dealer who was there with me told her she was being optimistic on her price and said he would give her $15. When she acted mortified the rude bugger told her she shouldn’t try to run an antique store from her garage as he walked back to his van. I wouldn’t have said it, but it was pretty darn funny to see and hear this exchange go on.
Just a few weeks ago I was digging through several boxes of records in someone’s driveway on a Saturday morning. I bought one record for $0.50 and passed up oodles of 1950’s Columbia Masterworks LPs priced at $5.00 each. I asked the owner why the other records were five bucks and the one I found was two bits, the guy said the others were old and you could sell them on eBay, the one I had was new and everyone had it. I gave him two quarters and walked away with a copy of the banned cover version of the “Some Girls” album by the Rolling Stones. How the dude missed the actual value of that album, and how it came into his possession are beyond me. At least it’s now in the collection of someone who knows what they have.
This is the new direction we are heading. Folks are getting desperate, think they can sell things they bought at an over-inflated price for the same price or better, and get pissed off when dealers clue them into reality. The new direction is that anger is building and we have an abundance of over-inflated egos and sense of self in a lot of our fellow travelers. A lot of people bought into the lie that the American Dream is owning stuff and moving up some ladder to more stuff in a bigger house every year or two.
The American Dream, in my mind, has always been the freedom to choose which direction you want to take in life. No guarantees, no promises and if you are willing to take the risk, no safety net. Success has been a greatly distorted word in American society. Success has become a word meaning riches and possessions. Success in my definition simply means raising yourself above your conditions or situation. A man or woman who tries to start and run an honest business, but fail, are successes in my book. They tried, they took the risk and they gave it a shot. The final outcome isn’t always as important as the actual act of trying to make a go of it.
By the end of summer as we feel the first cool winds of autumn arrive, the ladies who are selling some of their mementos of their days at Brown and a $160 compote, the man with the Columbia Masterworks LPs with split seams, the folks who had a condo foreclosed on and are trying to get rid of the damaged Armoire, will begin to sense that a cold winter and bills and upcoming holidays are looming. They will sell those possessions to pay the bills. The good stuff always gets sold first. The crap gets pulled out later. Unfortunately, the folks who had good money and spent it on crap are selling crap. They don’t even know what the “good stuff” is because they never knew in the first place.
All the while, we have been picking up their Mercury Living Presence and “Shaded Dog” S1 pressing RCA albums for a buck here and there, a quarter each on a good score. The folks with climate-controlled storage are snagging pieces of Heywood-Wakefield at used Broyhill and unfinished furniture prices. Now the pawnbrokers are changing their names and MO. They advertise on late night TV, rent commercial space in trendy zip codes and call themselves “Gold Services”.
Too many people, who are being dragged down in the depths of this economic upheaval, are doing so because they never understood the true value of education. What I mean is that for all of my life the value of education has been stressed to a point where it becomes a droning noise. The value of that education was earning a better living; at least that is what we were told. I agree with that statement but too many of us have ignored the true gift of education. That gift is the ability to learn and hone the skills necessary to research, study and evaluate data. Even some cat working the Starbucks cash register, who has an MFA in Drama should understand how to research and prepare for a part in a local theater. Those skills can port over to the “real world” but few people placed an emphasis on honing that skill. Now, we have a nation of highly educated people who don’t know the difference between propaganda and news, or the difference between fact and opinion.
It’s no wonder we spent so many billions of dollars on NASCAR collectables, DVDs sets of crappy TV shows and a plasma screen TV for kitchen viewing of the Today show. If we don’t know the difference between junk investments and investments into things with intrinsic value, how can we complain about the state of our economic affairs?
The great sloughing off of quick money has been going on in earnest for well over a year, we still have a long way to go before we hit bottom. Grab their crumbs as they fall to the way side as they will find their way back up again after things hit the cellar. Keep your head about you. Don’t fall for bullshit propaganda. Think about what service or goods you can provide to earn a living. Identify the things of real value in your life and learn to tell the difference between those things and the things that are truly valuable. Always remember that your loved ones are the most valuable part of your life.
Take the best advice I can give you as we move forward through and past this. If you want to follow trends and be fashionable, you are going to pay an inflated price for that fashion sense. Once the trend meets it’s apogee, values plummet till they find their perigee. Those fashionable things won’t rise in value until they begin their cycle to their next apogee; and if you factor in inflation and a lower sales base, that apogee will be smaller than the first. This applies not only the material things you buy; they also apply to the financial institutions we all depend on to operate efficiently in the background of our lives and they apply to the central components of our daily lives.
What I am saying is that we all need to think twice before we take drastic action in our daily lives. That gas guzzling SUV you bought in 2006 might drain a C note from you every week at the gas pump, but is it cheaper for you in the long run to ditch it for absolutely no resale value and take on another 5 year car payment, with a big maintenance expense for the battery around the time your car will be paid off? Is it worth dumping another $35K on a new car from now until 2013 when gas might reach $250 per barrel? If gas is $8 per gallon, how much is that damn hybrid still going to cost you at the pump? How much will groceries cost?
Pump and dump. The trendmakers are pumping the hybrid cars, the dump happens after they reach the end of the line with that meme. They did it with the land yacht SUVs. They did it with the McMansions. They did it when they sold us on re-education as an advantage of NAFTA. They did it with Reaganomics. They did it with winning the hearts and minds of the Vietnamese. They did it over and over and over and we always bite the hook with the big fat worm. We need to become the proverbial Eskimos and let the trendmakers become the refrigerator salesmen.
“So, tell me. Why do I need this Frigidaire?”
Payday comes and you are thrilled the floater checks are covered and you hit the grocery store and gas pumps on the way home from work. You sit down and look at your checkbook and hardly anything is left. It’s going to be a hard two weeks until the next payday and a year ago it wasn’t like this.
It’s costing you $9 or maybe $18 per day to pay for gas to and from work, so you think this is to blame, but then you think about the few sacks of groceries you bought and those cost you $75 when a year or two ago they would have only cost you $45, so you think the food is to blame. Then it hits you.
Food is higher because gas is higher, and food is also higher because there is more demand for corn and rice and wheat and soybeans and now there is a shortage. Corn is more in demand for ethanol production, which was supposed to offset rising oil costs and make the fuel cleaner to burn but now it’s driven up the cost of food, food is in short supply and gas went through the roof anyway.
Fuel is higher because the dollar is far weaker than it was even 6 months ago and the people who have true wealth are moving their money into commodity speculation, so they are driving the cost of a barrel of oil higher and higher. Demand is still high for oil and refinery capacity has been decimated since the late 90’s when the big oil companies were given the green light to merge unabated.
Your monthly bill to pay for gas in the car has skyrocketed, the bill for natural gas in your home has skyrocketed, and the electric companies are chomping at the bit to sack your earnings too. Water bills are rising, food is getting expensive and in short supply, insurance keeps going up year after year.
How have your earnings looked over the past 8 years? If you charted it out in a graph you would most likely see two big dips and a flat or slowly rising line between the two dips. Earnings have not only failed to keep pace with inflation, the average and median incomes of US workers have actually fallen. Your spending power is not what it was in 2000.
No one in the government dares even say the truth; we are in a deep recession. Economist eggheads flutter around the subject without saying it but some brave souls in the ether world of economics have been saying we are in an immense recession. Slowly but surely, some are leaning their language toward the big “D” word, the word that no one dares write or say in such circles.
On April 1st of this year the stock market rallied like crazy. The cause was an email from a respected economist who’s opinion is regarded like God’s truth. His outlook was Rosy Jack and upbeat and the market responded. Then the truth got out, his email, all comments in the writing, were an April Fools joke. He was being a sarcastic fucker like your humble blogger and the moneybags on Wall Street took off on a wild spending spree.
So, I have to ask you this question. Who and what really controls our economy? It’s not wise and learned men and women, for if they did the April Fools rally would have never happened. The cyclic dependencies that have brought us to this precipice would not have been allowed to operate had wise people been at the helm. What really controls our economy? Is it optimism? Greed? Blind luck?
I can’t answer those questions; I don’t have the foggiest clue.
Economics is a strange creature. Off and on for more than 20 years I have followed economics as an occasional, novice spectator. I’ve read various reports, books, journals and it’s all led me to a point where I see economics as a multi-headed Hydra. No precious gemstone could be cut with enough facets to equal the number found in economics.
Every now and then a small door will open and then shut just as abruptly that will lead me to a new realization of what is going on behind the scenes. The drive mechanisms of the economic bus are mysterious. These can be large or small revelations, some occur just by looking into the past.
If you sat down and read as many volumes as you can find regarding the touchstone moments of economics over the past 100 years you would have a heavy reading list and dear God, is it ever boring. It would take years to read the main books and journals, assessments and deconstructions, editorials and academic research. In the end you would be no closer to understanding the real foundation of economics. You would, however, keep seeing the same façade to the subject. Credit, payment of interest and control of resources. Those are the three subjects that maintain the façade.
Take the 1971 events where Nixon told the world to pack sand as an example. Credit in this case would be Federal Reserve notes and the valuation of currency. Interest on credits would have been the US gold reserves. Control of resources is the gold stockpile and the valuation of currency. It never changes. Credit. Payment of interest on credit. Control of resources. Thirty-seven years later and it’s still about those three subjects, only the players and the medium of credit and resources have changed.
Maybe the unrest in the economy is natural; perhaps it is not. I don’t know. I do know a few things. Level heads will prevail if and when things get messy. Level heads do not lie down on the floor and throw a tantrum. Level heads do not go out and try to assert some sort of flawed alpha type personality trait. Level heads do not wonder where the good times have gone and ask what they should do now.
Do you own a bicycle? If not, get one on the cheap through Craigslist or at a yard sale. Do it pronto. Get spare parts for it too. Do you own a small backpack or a large duffel or Navy sea bag? If not, get those items pronto. Do you know how to make a crystal radio? Download instructions on the web and try it out and commit it to memory. Do you own real work clothes, a real pair of work boots and the ability to snuff out your ego? If you say no to any of those things, get busy on them. You will need all three.
Did you ever talk to your older relatives about the Great Depression when they were alive? If you did, you better start plucking the wisdom from what they told you. If you have no idea what they did to survive that event, here is the short answer. Be prepared and ready to do whatever it takes to survive from day to day. I’m not talking about rioting and causing mayhem. I’m talking about being prepared to work for pennies and be so afraid of letting that money out of your hands that you are willing to go to bed hungry at night, for many nights, over many years.
Could you go to bed on an empty stomach after a hard day of manual labor and know you will do it again tomorrow if it means your child or elderly family member can have one small bowl full of mush? Would you be prepared to do that? Do you even know what mush is? Find out what it is and learn how to make it.
Are we heading down that path or am I just a crazy old paranoid fool? Maybe, maybe not. I do know this. We have not seen the bottom of the economic woes in this country; we are not even close to being able to see the bottom. We have only begun to start our fall into the hole.
In one regard money follows a rule in physics. Money, like water and electricity and high pressures, will follow the path of least resistance. In the case of money, the path of least resistance is the path that will yield the highest return on investment. i.e. the payment of interest on an investment. Water will not flow uphill, electricity will flow through copper wire instead of steel cables and a failed seal on a vacuum chamber will always allow a higher pressure to enter the chamber.
Real money, not like what you and I have, will always move along to the next area to speculate, causing a bubble. This bubble ratchets up demand for that ‘thing’ and drives the prices to un-naturally high levels for that ‘thing’. Credit and real estate were speculated upon and a bubble formed. Prices inflated well above the intrinsic value of those things and rose many times higher than historical prices and what inflation could provide. The bubble is leaking; the higher pressure is entering that chamber. The path of least resistance is taking the money to food stocks and other commodities like oil and precious metals. When those have once again been pillaged beyond the last drop of interest, the money will flow out to another speculative bubble like water from a broken dam.
30 years ago the purchase of a house was a safe bet. You could expect a nominal increase in value over time along with the rise of inflation to provide you with a decent profit when you sold ‘if’ you made a wise purchase and kept your home maintained. Take a look at your county tax commissioner’s website and look at the graded and assessed build quality for homes. Check out the number of new homes that are only graded as Good when compared to the number of homes 40 years ago that were built to a higher quality standard and get an Average rating. There is your value in a McMansion. Only a Good rating for quality of materials and construction on your McMansion with a mudroom and Jack and Jill bathroom while a ranch house in the same neighborhood, built in the 1960’s is better constructed with better materials. Yes, infill was a bright idea. Actually, it was a bright idea for the speculators who made a killing on the gullible and the folks who misinterpreted the “American Dream”.
If you think a 20% or 30% drop in home values is the bottom, think again. This market has another 30% in it at the least. Look at the historical values of homes before the speculation began and you will see a modest increase yearly to compensate for inflation and demand and that is all. The ‘value’ of homes over the last 30 years has been driven by speculation and when there was no driving force to raise speculation the financiers created a credit bubble to facilitate a house speculation bubble.
We are still waiting for the Alt-A bubble to begin crumbling, we are waiting for the Put Option ARMs to begin resetting, we are still waiting for the credit markets to shrug off the excess credit load with write offs. We are still waiting for the fall out from lack of cash flow that will affect commercial real estate and retail far more than the credit collapse. Remember, right now we are seeing only the early effects of a so-called credit crunch. The credit was based on ether. It was money that never existed in the first place and a massive block of the economy was being driven by this credit. When credit is gone only cash is left.
When the cash is devalued like we are seeing now, inflation really sticks it to those who have cash. When credit is gone only those with cash can maintain the economy and when uncertainty and fear permeate the economy you won’t let a penny out of your hands unless you really have to. This is the direction we are heading toward. Cash did not keep the failed and failing companies alive, credit kept them afloat. Cash did not put people in million dollar McMansions, credit put them there. The credit is going away and the speculators are looking for cash only resources such as oil and gold and corn and wheat and soybeans.
I’m not saying the end is nigh, I am saying that we all need to be prepared and we all need a plan. I’ve got a bike, work clothes, some food socked away, some cash and no qualms about letting my ego take a kicking just to make enough money to eat a bowl of rice and beans or some sort of pancake concoction. Are you willing to do the same thing?
My trip to and from work every day takes me through quite a few contrasting areas and neighborhoods. I start out in the residential area just north of the Decatur city limits; work my way past Lavista, I-85, Buford Highway and Peachtree Street. I head north through the tawny and wealthy neighborhoods of Buckhead and cruise up to the north end of the perimeter where I hop on 400 north and feel the adrenaline rush of driving with the hogs of the road until I am finally able to escape the high speed and substitute it with the stop and go of a red light every 100 yards in Alpharetta. The path is flipped around in the late afternoon for the gas burn home. I have alternate routes for when the traffic plugs due to a wreck or water main break or God knows what.
The trip is interesting in the morning as I can cruise very well and make it through many red lights before I finally have to stop. I can see the neighborhoods as I pass and get a look at my surroundings for a little while. The OCD aspect of my personality is best suited for the drive as I count things while I drive. A trick to pass time that I picked up years ago when I would drive home to visit family when I was on leave in the Navy. I count red lights, mileage, elapsed time and a wide range of other things. If I run out of obvious things to count I’ll turn my attention to car makes, models and colors.
The other week I found myself counting For Sale and For Rent signs along the side of the road. I tallied 25 homes for sale and 7 for rent. Of the 25 homes listed for sale, 16 of them were in the upscale Buckhead neighborhoods. This didn’t include the numerous condo projects that are still being built and the ones that have recently been completed. 16 multi-million-dollar homes for sale just between Peachtree Street and Pill Hill on the northside, and this was seen on one road, Peachtree-Dunwoody. Think about that for a minute, I’ll come back to it.
When financial “bubbles” burst, they do one of two things: 1) A sudden and widespread deflation. 2) A slow and prolonged leak. The mortgage crisis is a bubble that leaks like the latter, it’s a slow and drawn out process. The highest number of sub-prime loans that had a reset has just come and gone. October was the month that saw the highest number of interest rate resets. The fall out from those resets will not be seen for quite a while. The folks who have already been caught up in the crisis were those who got on the bandwagon early. The ones who jumped on while it was in full swing are just now being pulled through the wringer.
As I drove north on Peachtree-Dunwoody that morning and caught myself admiring the many older, more lovely homes I noticed that it was the newer infill style McMansions that had the for sale signs and very few of the older homes were for sale. I thought about the millions of dollars spent to buy the land, paying crews to tear down the old homes and build the new houses. I thought about what some of those places will look like after they have sat vacant for months. I thought of the stories we are hearing out of Cleveland and the Slavic Village neighborhood.
Slavic Village, for those not familiar, is an old, established neighborhood in Cleveland that was settled by European immigrants starting back in the 1800’s. It has been the most severely effected neighborhood in the entire nation, by this mortgage crisis. The last figure I saw stated that about 800 homes are vacant in this area and the director of a foreclosure prevention center in Cuyahoga County stated that it takes approximately 72 hours after a home is vacated before the looters break in. The looters are stealing recyclable materials such as copper and aluminum.
I don’t think this would happen in Buckhead as there is too much concentrated wealth and power living there to allow it to happen and I don’t think “white flight” is going to be an issue like Detroit saw decades ago. The housing trend in Atlanta has reversed in recent years with more people moving back inside the perimeter. Still, the thought of massive McMansions sitting vacant all through this upscale and power laden neighborhood is chilling.
Reports across the board show that the worst is still yet to come. An analogy would be that what we see now is simply the salad being brought to the dining table and the main course is only now being put in the oven. We are being bitten by commodity inflation and a trip to get groceries carries it’s own sticker shock. The earned wages of Americans have not kept pace with inflation over the last 6 years and now we are in a spot where the dollars is breaking records on an almost daily basis for all-time lows in value. Money doesn’t stretch because it is becoming worthless. Where will this end?
Like those homes in Buckhead, there are people who have massive personal wealth, the sort who can survive this economic slide with no problem. There are also people who are on the periphery and barely making it, even in the higher income brackets and even in those tawny neighborhoods. We, like our nation as an entity, are getting close to the breaking point. How much longer it will last before the rubber band snaps is beyond my knowledge. The fallout is going to be massive and it doesn’t take an economist to see that.
All any of us can do is hold on and wait to see when the other shoe drops.
To make 1 gallon of gasoline you need to start with 2.15 gallons of crude oil.
Under optimal conditions it takes approximately 1.24 gallons of fuel to perform a single farming task on 1 acre of land.
You can make 230 gallons of ethanol per acre of corn.
Most bio-diesel made in the United States comes from soybeans, which yields only 70.13 gallons per acre.
The average steer produces 568 lb of beef.
To produce 1 lb of beef it requires between 2.6 lb to 16 lb (depending on data source) of feed.
A 1200 lb steer, from which 568 lb of beef is harvested, requires between 13.83 and 284 (depending on data source) gallons of oil.
Soybeans cost $10 per bushel, up from $7 per bushel in January of this year.
Corn costs $3.50 per bushel, up from $2.00 per bushel two years ago.
A bushel of wheat now costs $9.50, up from $5.00 per bushel in January.
A recent study in Montana shows that for a single adult the minimum living wage needed without asking for public assistance is $10.32 an hour, $20.97 for a single adult with two children. 40% of all job openings in the state pay less than $10.32 per hour. The study also found that the state’s median wage has risen by 9.1% since 2002 but the cost of health care has risen by 44% and the overall cost of living has shot up 19.7%.
Of the 56 counties in Montana, 46 have an average population of 6 or fewer people per square mile. In Chicago the population density is 12,000 people per square mile, average. In 2006, the City Council of Chicago attempted to enact a Living Wage Law, which would have required all employers to provide its employees with pay that would at least equal the minimum living wage for the city.
According to the US Census Bureau, in 2006 earnings dropped 1% and for the third straight year earnings lagged behind inflation. The number of uninsured Americans also increased in 2006 by a total of 2.2 million.
In yesterday’s GOP debate, candidate Fred Thompson said things look “rosy” when asked to describe the economic state of affairs in America today and "We have the second-highest corporate tax penalty in the world. We need to do better than that.” Rudy Guiliani said, "The possibilities for America in this global economy are endless”. Mitt Romney said, "It's inexcusable that Michigan is undergoing a one-state recession, that the rest of the country is growing”.
National Household Survey on Drug Abuse found in 2001 that more than 4.6 million Americans--a much higher number of individuals in need of professional help than had previously been thought--did not recognize their problem and were “in denial”.
The question is—will someone do an intervention for the Republican candidates about the economy and it’s effects on 90% of the American public?
One of my favorite Saturday activities is to hit the yard sales and thrift stores. Sometimes I score some real finds in the areas that I collect and to sell on eBay. The real scores aren’t frequent but they do occur. This year I can claim among my finds; some 1st pressing Kinks LPs in astounding condition, the obligatory stash of great books and a Heywood-Wakefield end table. There is a side benefit to hitting these spots each weekend and that is a chance to gauge the market and financial situation among my fellow Atlantans.
Last summer I began seeing a noticeable rise in for sale and house for rent signs on my typical routes. As this summer has come to a close I have seen a serious drop in those signs along the road but the homes are not being sold. They sit empty, the yards beginning to look un-kept and messy. Next will come random vandalism as the homes sit, unsold and unused. The vandalism will ruin the homes and bring down the values of the surrounding houses even more.
The thrift stores are seeing more and more shoppers. I’ve noticed this as the summer has progressed. I’ve been used to a mix of three distinct groups of people at these stores over the years. One, the group I am a part of, is the dealers who sell on eBay or have booths at antique malls. Two is the group of folks who just love to find bargains and the thrill of looking for a serious “find” at the stores. The last group is the folks who really do benefit from buying clothes and household items at thrift stores. I think the latest upswing in shoppers at the thrift stores is comprised of folks who have suddenly felt the pinch of the economic downturn. I see more new cars parked in front of the store and more folks who are dressed like the stereotypical suburbanite.
Even at the farmer’s market I am seeing more folks who drive cars and are dressed differently than the people I normally see. Among the chores I had to do this weekend was a trip to get some groceries, so off I went to the International Farmer’s Market in Chamblee. Normally I see an interesting mix of folks at this market, this time I saw more middle class, suburban white folks than I am used to seeing there. They were all over the fresh produce and fruit aisles and to be honest I am actually very happy to see this development. These stores offer the best buys and the produce really is tasty like fresh from a backyard garden. I’m all for supporting independent stores and giving the middle finger to the big chain stores.
People are frugal for only one of two reasons, they want to or they have to. I am trying to live a more frugal lifestyle and I’ve straddled the fence between living more along my means and higher than I should have for years. I seem to go in cycles where I wise in managing my money and blowing it. Blowing it has always led me to feeling depressed after a while. When I reach the cusp of realizing what I am doing I have been able to back down and live a more reasonable lifestyle but by then the damage has already been done. On comes the depression.
I think there is a sudden increase in people who now have to live a more frugal lifestyle and I don’t think they are too happy either. Imagine losing your home and winding up back in an apartment? Imagine going from buying the latest plasma widescreen TV to hitting church and charity thrift stores looking to buy a used washer and dryer? I see those folks shopping at these places, their faces are new, their clothes are new and they drive cars more expensive than my Jeep. They don’t look very happy to be shopping at St. Vinnie’s.
We are being given warning signs by even the mainstream press that the economic downturn is just going to get worse in the upcoming months. I’m not an economist but even I can sense and see things that lead me to believe that we are only seeing the early stages of things getting hard in this country. I have a feeling I’ll be seeing more unhappy folks at the thrift stores. I’ll be there looking for good deals and things I know I can sell on eBay. I’m afraid they will be there not out of choice but out of necessity and that bothers me a lot. To all of the new shoppers at the thrift stores who aren’t happy with this new twist in life all I can tell you is buck it up, it could always be worse and stay out of the record bins. I’m the cat who buys the vintage vinyl for his collection.
An article posted on the Baltimore Sun website offers a true example of a nightmare for any homeowner. Baltimore City and Baltimore County tax officials are acknowledging that property tax checks from American Home Mortgage that were meant to pay property taxes for their customers, are bouncing. The situation is so serious that Baltimore County is no longer accepting corporate checks written against the bank accounts of American Home Mortgage. All payments from them will have to come in the form of a certified check. Just as troubling in this report is a comment by a senior financial analyst from Bankrate.com that property tax checks are not even being sent.
Regardless of the financial situation faced by a homeowner in this day and age one thing any homeowner would expect is for the mortgage company to have maintained the funds necessary in the escrow account for each borrower. It appears that this has not happened. Unless American Home Mortgage has failed to deposit the funds given to them by the buyer into the escrow account, I simply can’t see a reason why these checks would bounce. There has been a suggestion that their escrow bank account has been frozen for protection while it undergoes Chapter 11 bankruptcy proceedings.
This also does not ring true with me. Unless the account was frozen out of concern that AHM would dip into this account to keep itself afloat or rob the coffers. So, where does this story stand? Has American Home Mortgage failed to live up to its side of the legal agreement it made with its customers by not depositing funds into their escrow accounts? Have the escrow accounts been frozen because there was withdrawal activity seen which set off red flags? Is it just a simple mistake?
All postulation aside the most troubling story behind this is that if the property taxes are not paid by American Home Mortgage the homeowners will be the fall guys. The taxes will still be due and if they are not paid by AHM the homeowner will be hit with a late payment penalty and if they can’t pay that bill their property can be put up for auction at a tax sale.
Imagine you’ve paid your mortgage payments and you are just holding on and keeping your head above water and this hits you. Or, just as horrible, the mortgage company doesn’t pay your homeowner’s insurance and you suffer a fire or, since the mortgage terms always state that you must maintain insurance, they cancel your insurance for non-payment and order you to pay for insurance on your own?
The scandals involved with the housing conspiracy continue to deepen. Coming up in the mix…insurance companies get shafted and lay off employees, lose their income stream and fail. Also in the pike are stories about the “winners” in this conspiracy, the financial institutions that gain control of large swaths of American property. Just beyond that, homelessness for former homeowners who can not find affordable rental property or cannot find an apartment leasing company that will rent an apartment to them because of their foreclosure. Down the road…vacant homes, American suburbia becomes a ghost town.
In this day and age, the American working man and woman have very little to be happy about and more uncertainty regarding their future than ever. The holiday itself was created in order to give the working man a day of rest, it is a holiday that finds it’s origins in the unionized labor movement. Now our labor unions are toothless and the cards are stacked against them. The average American worker, who lives and sweats to live the “American Dream” is marginalized and no longer has a voice in government and little power at the bargaining table. Most are left to fend for themselves with no union to represent them.
We start the Labor Day weekend with a continuing war draining our resources and wealth from the public coffers into the bank accounts of the super wealthy who are making a proverbial killing off this war. Gas prices are still outrageously high, grocery shopping is enough to break the bank accounts of many Americans and the low hum of a President begging to nuke Iran still rings in our ears like the Taos hum.
We work longer hours, for less pay, smaller benefits and greater responsibility and workload than ever before. The pie in the sky isn’t sweet and the slices are smaller than our parents had to choose from. RealtyTrac.com predicts there will be over 2 million home foreclosures in 2007, which is 42% higher than all of 2006. Meanwhile, here in my hometown of Atlanta, the purchase of homes valued at over $1 million for just the month of May rose to 97, nearly double the number that were sold just two years ago, according to the Atlanta Journal-Constitution.
The playing field hasn’t been level in this country for a long time. I don’t begrudge a person who creates wealth nor do I take offense at what they do with their money. On the eve of a national holiday that honors the average American worker, we have to ask ourselves why we as a nation allow this level of disparity and flawed thinking get to this point. The corporations and wealthiest among us have and will fight to maintain the power they have over our government and our lives. They will not give it up and if their power is diminished even slightly, they will not rest until they have gained back as much as they lost and more.
The most simple ways for the average American to fight back are:
1) Simplify your life to reduce the influence they have on your wallet and livelihood.
2) Reject as many corporate owned institutions as is possible.
3) Learn the voting record of your local, state and national leaders. Share what you find with politically minded friends, neighbors and co-workers.
4) NEVER believe what a politician, political operative or a “leader” tells you.
5) Raise a stink when your representative votes against your own best interests. Call, write a letter, send an email. Do anything to let him/her know they sold you out. Be nice though. Lunatic ramblings and rants don’t do you a lot of good.
Enjoy your three day weekend, folks. Take care, watch out for the drunk drivers and put the white clothing away until Memorial Day weekend next year. Think about how you can make YOUR life better, more productive and creative in ways that will mystify the powers that be and limit their control over you.
And above all, if you are traveling by airplane and need to visit the bathroom, beware of pervy Senators looking for a little bit of dick to suck.
