Helping Homeowners In Michigan
Archive for August 8th, 2010
Middle class in shambles – more debt, more job losses, more deceit. Banks attempt final push to break up the middle class. Housing values down by 30 percent but total household debt only down by 2 percent.
August 8th, 2010 | 
Author:
On Friday the grim reality of more job losses for Americans was plastered across headlines. What makes this even more distressing is this is occurring during what is supposed to be a recovery. Yet most Americans realize that there is no recovery outside of Wall Street. If anything, things have gotten progressively worse as foreclosures are still near their peak, bankruptcies are rising, and wages are stuck or reversing backwards. The government in conjunction with banking lobbyist and the Fed has decided to punish Americans who actually want to save their money. How? By allowing interest rates to be artificially low thus pushing savings account interest rates to all time lows. Current rates are low not because of a healthy economy, but because most people realize that the economy is still on a shaky foundation.
Take a look at the 6 month Treasury bill interest rate:
The above is occurring because people are running for cover and are happy to take a 0.20 interest rate instead of stuffing their money into a stock market that is more reminiscent of a casino. The skepticism is rooted in the fact that many are feeling in their gut the systematic dismantling of the once mighty middle class in America. Banks would love nothing more than for this to happen since a large portion of their income now comes from gambling on Wall Street. So massive foreclosures and defaults are fine as long as they can invest and speculate and make money that way.
“After all, many companies they support have moved jobs overseas so we now operate in a world where the interest of the banks is not aligned with the interest of typical Americans. In fact as we have seen with short selling the market, some investors and banks make billions of dollars by betting against the American economy.”
The only people talking about a recovery are those in the banking sector because for most there is no hint of a recovery:
Keep in mind the last two jump ups have to do more with Census hiring and the last two months of losses include those jobs pulling away. So basically any gains or losses are at the hands of artificial intervention. The overall economy is stuck because so much money is being sucked into the banking sector. Why would banks want to lend to a shrinking middle class when they can make more money speculating on Wall Street? It isn’t like the bailout money pushed into their lap had any strings attached, lobbyists made sure of that. So here we are nearly 3 years into this crisis and trillions of dollars poorer yet the middle class has gotten smaller. We now have 40 million Americans on food stamps. Even the U.S. Treasury head noticed this but this is thanks to the banks siphoning off money from the actual productive sectors of the economy.
Banks have pulled back on their lending:
Clearly the middle class is not getting any net benefit from all the bailout money. So where is this money going? The bailout funds have gone to repair the broken and battered balance sheet of banks. Yet this was not the pretense that was put on the table years ago. What was sold to the American people was that the bailout funding was to keep lending going and shore up the housing market. Does the above look like that?
From January to June, over 1.7 million American homeowners received a foreclosure filing. If we look at overall foreclosure activity it remains elevated:
Source: RealtyTrac
The reason foreclosures are still at peak levels is because Americans are largely unable to shoulder the massive amount of debt they are under. The housing market is still trillions of dollars away from the peak we reached:
In total, roughly $7 trillion in U.S. residential real estate values have been lost in the last few years if we use the current Case Shiller data and the Fed flow of Funds report. However, the amount of debt working and middle class Americans has not adjusted accordingly:
While actual real estate values have fallen by close to 30 percent household debt has only moved lower by 2 percent! And you wonder why so many Americans are underwater and defaulting in mass on their loan obligations. The middle class is slowly being taken apart and this is no accident. Banks would want nothing more than to cement their power further and this was seen when the too big to fail got even bigger in this crisis. Time to break up the banks and restore power to working and middle class Americans before it is too late.
Posted in Banks, Economy, Employment, Financial System, Government, income, middle class | 
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Reality Beckons (Government Pensions)
Since I’ve said “I told you so” a few times of late, this time I’ll just do this….. 
-
Unfunded pension liabilities are approximately $2.5
trillion, compared to the reported amount of $493 billion. -
Unfunded liabilities for health and other benefits are
$558 billion, compared to the reported $537 billion. -
Thus, total unfunded liabilities for all benefit plans are an
estimated $3.1 trillion — nearly three times higher than
the plans report.
If you need this translated, it’s very simple:
You’re not going to get the money you think you were promised.
If you’re a government employee and are counting on some sort of pension plan, get over it.
The money does not exist.
It cannot be acquired.
If you scream about “But the state constitution says we’re protected!” I will simply remind you that it is easier to change a State Constitution than it is make money that doesn’t exist magically appear.
To put this into context, the shortfall is double the annual Federal Budget deficit – at today’s bloated amounts. It is five times the average federal budget deficit during Bush’s administration.
Again: You’re not going to get the money, and most of it isn’t, as is commonly believed, in the form of medical benefits – it’s in direct cash pension compensation.
You were lied to by the plan administrators.
They (intentionally) used ridiculously-rosy projections of “gains” in their portfolios.
Their “projections” are outrageously unsound, as is their accounting.
Your public-sector unions lied to you too. They led you to believe that you could have the equivalent of a free lunch and that these plans could be funded and would pay. You can’t and they can’t.
Now you can get angry at “the people” all you want. The fact of the matter is that the people who BS’d you aren’t the public – they’re your so-called “union representatives” and the so-called “pension managers”, all of whom you hired and who report to you, not to the taxpayer.
More than two years ago I wrote a couple of Tickers on this subject and warned you that you were going to get hosed – severely. That the funds you think are there are not and would not be.
If you are a state or local government employee and thought I was some sort of nut a couple of years ago when I was warning you that you had better start both raising hell and socking back your own funds, you better read this report – and then get VERY angry, as you’ve now lost two more years of time with which you could have been trying to do something about securing your own retirement.
The programs you believed would protect it will not be there when you expect them to be.
Period.
Posted in Debt, Economic Crisis, Economy, Financial System, Fraud, Government, Pension Crisis, Pension Underfunding, pensions |
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proudly supports:
Bill Still For President
for Congress
Michigan 11th District
By Bill Still
There is only one answer for the world economic situation; monetary reform.
1. No More National Debt
2. No More Fractional Lending
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