I am writing this from Chicago, a fine example of an international city with small town centers in every neighborhood. It is a very livable city. A metro-area where a car is not needed. One can do most of their daily shopping needs by just going around the corner, on foot, to buy their daily items. The city and the surrounding immediate suburbs, which one might call the first tier development around the city, often has such independently owned shops.
Cruising around on my bicycle, I found many empty storefronts, and the home listings in the neighborhood publications appear to show homes priced 10-20% lower than a year ago.
Currently, I am sitting in a Starbucks located on a busy street surrounded by small shops, and restaurants serving the needs of the neighborhood with a feeder population I estimate to be around several thousand people. Such a shopping area shares its feeder group with other shopping areas, as well.
I believe that in many ways there is enough income to allow these businesses to survive. As one drives several miles west, where the second and third tier suburban sprawl is located, this residential tier expansion continues for 30 plus miles. The further one goes, the more one needs a car to meet their shopping needs and find big-box chain stores that the urban dwellers also patronize. I might add that there are chain stores within center city and the first tier residential expansion, as well.
Most of America is not so fortunate to live in such a convenient city. One major drawback is the outrageously high cost of housing. A two bedroom, wood sided, bungalow with tiny rooms most likely in need of repair or remodeling, a small backyard and single garage, if that, costs around $400,000!
Many of these same people earn higher salaries than those in Pittsburgh, but their monthly expenditures are likely to be higher. One thing we all have in common is the damage this economic crisis is doing to us all.
In my discussions with Chicagoans, they all stated that they are reducing their consumer spending. They are all finding it hard to pay their bills. Some are considering a part-time job, or finding a way to supplement their current incomes. Some have taken on a housemate, while others have cut way back on their weekend social and entertainment spending. Others, who may have had someone cut their lawns, are considering doing that job on their own. So many have been feeling that they are doing more work, and spending more hours for the job. They are feeling that much of their own personal time is now being spent doing work for their jobs. Restaurants are seeing fewer customers. Shops are seeing fewer sales. The consumer has reduced their spending.
The Federal Reserve reported households lost $51T, or 9% of their wealth just in the last 3 months of 2008. Over that entire year, household wealth dropped $11T, or approximately 18%. This did not include stock market investment losses! This was just household wealth.
The United States has been borrowing $2B per day over the last 10 years, much of it from China, to fuel our consumer and homeownership expansion.
Now the expansion has shifted to bank bailouts. Bloomberg News stated the government has authorized the Federal Reserve to either lend or actually commit $12.8T to the various Wall Street bank bailout programs following the decades of new home construction expansion and resale of homes.
Another common point the big city of Chicago has with smaller populated centers is that working America has seen a $50T loss of personal wealth. “The gap of lost wealth, $30.9 trillion, is approximately the combined annual Gross Domestic Product of the US, Western Europe, and Japan…Family net worth hit a record high of $64.36 trillion in 2nd quarter of 2007. By 4th quarter 2008, it fell to $51.48 trillion, a loss of $12.88 trillion”, as was reported by the economist Henry Liu. [Michael Whitney, Bernanke’s Financial Rescue Plan].
Working Americans no matter if they have a $400,000 home in a highly inflated market, such as Chicago, or a $50,000 home in a reasonably priced market have seen their personal and home wealth evaporate in less than 2 years. It is estimated that the 2009 foreclosures to be 2.1 million, or 400,000 more that in 2008. These statistics may translate into real problems even for the prosperous metro-Chicago area.
What may also affect job retention is the fall of industrial production, which dropped at an annual rate of 20%. GE saw a decline in profits. This decline indicates that consumers have slowed in their purchases of appliances, and this bellweather American company may be seeing shrinkage with across-the-board sales.
“Since 2007, industrial production is down 13.3%. Capacity utilization rate for total industry fell further to 69.3%, a historical low for this series, which begins in 1967 (Federal Reserve). The persistent fall in housing prices (30%) and losses in home equity only add to deflationary pressures.” [Michael Whitney, The Foundations of Our Economy are Strong-A Bulletin From the Captain of the Titanic.]
There does not seem to any real “Change That We Can Believe In” in the rescue of the working American.
On a different subject that has been brought to the nation’s attention this week, which I found in the article “US Water Contamination By Pharmaceutical Companies, Hospitals, Consumers”, by Donn, Mendoza, Pritchard, is frightening. We are being poisoned by big WMD-Pharmatoxins. Mr. Obama needs to grab hold of this national security crisis immediately.
271 million pounds of industrial chemicals released into rivers, lakes and other bodies of water comes from drugmakers. This includes antibiotics, anti-convulsants, mood stabilizers and sex hormones have reached the drinking water glasses of, at least, 51 million Americans. This article stated that most cities and water suppliers still do not test.
Also written was that two common industrial chemicals that are also pharmaceuticals-the antiseptics phenol and hydrogen peroxide- account for 92% of the 271 pounds identified. There are 8 million pounds of skin bleaching cream hydroquinone, 3 million pounds of nicotine compounds that can be used in quit-smoking patches, 10,000 pounds of antibiotic tetracycline hydrochloride, plus chemicals used to treat lice and worms.
Landfills leach pharmatoxins, too. Chemo-agent fluorouracil, epilepsy medicine-phenytoin and the sedative pentobarbital sodium and disposed of. 572 million pounds of buried drugs have been disposed of since 1988.
In Columbus, Ohio, drug maker Boehringer Ingelheim Roxane Inc. discharged an estimated 2,285 pounds of lithium carbonate into the wastewater treatment plant between 1995-2006.
Also, codeine, rat poison, pesticides are discharged into the water supply. In addition, the flushing of unused drugs is a problem. The article stated that it is commonly believed the majority of the chemicals discharged into the water supply came from humans and animal excretion. [End summarization.]
What we have is a national health crisis. Is there any reason why the immune systems of Americans are compromised unnecessarily?
thanks for reading, jerry
Showing posts with label Mortgage Foreclosures. Show all posts
Showing posts with label Mortgage Foreclosures. Show all posts
Tuesday, April 21, 2009
Sunday, February 22, 2009
The New American Paradigm
Urban sprawl is dead, and we should all be grateful for it. America is entering a new paradigm, which I have been writing about for over the past year. The nation has been feeling the contortions of a painful repositioning brought about by the country’s most greedy and self-centered individuals sucking off of the citizens that earned much less per year than they did. I have written before that they were the designers of the world’s biggest Ponzi scheme. They were instrumental in the monstrous frenzy that orchestrated the creation of what we know today as urban sprawl.
They issued huge "creative", although destructive mortgages to families and individuals, as well as speculators, to sell those large homes with big footprints. Often linked by highways, the residents of those homes spent hours in their cars, stuck in long rush hour delays as they crept along, inch by inch, toward their offices or places of work. To and fro was their routine, day in and day out. Out the tailpipes spewed fossil fuel pollutants.
With many of these homeowners losing extraordinary value in their homes, some over 50%, they are fearing the reset of their original Teaser mortgage rates, which might have been at 3%, now rising to 8-9-12%, or more. The incomes of many of these families were already stretched before the reset schedule, and now, with wages stagnant, and jobs being one step away from separation, as well as plummeting property values, millions are ready to walk away and find somewhere else to live leaving those who are and have been paying their mortgages left alone on the cul-de-sac to watch their own property values plummet. This is painful to watch, nonetheless.
We have begun to realize that the homeownership scam has been just what it was. It has been a scam, part of the Ponzi scheme, which began 30 years ago, to force middle income workers to live above their means, and borrow off of their investments to participate in the con-sumerism culture preaching that more stuff is better.
Those top-tier financial conartists working in the FIRE sector of our GDP, finance-insurance-real estate, were the ones who so loved to sell people highly priced homes that they would never pay off delaying the chance to live mortgage-free, for possibly many years, following that final payment, off-setting the inflated costs which were paid so dutifully. With interest payments over a 30-year mortgage schedule, their homes often cost them twice as much above what the actual agreement price was. In order to recoup that inflated outlay over 30 years, they would need to have the opportunity to live in that house mortgage-free. But, today for many that dream has turned into a nightmare. The urban sprawled communities will begin to disappear as more and more families walk away from their mortgages. There will actually be turned into ghost-town suburbs surrounding some of our cities.
A reason that might tip homeowners into walking away from their mortgages could occur when they hear the sales pitch they will likely be given in hopes of swaying their emotions attaching them to place and neighborhood when their bankers come a callin’ with new mortgage agreement papers for them to sign. Once they are done reading the stack, they will likely figure out that they will basically end up as just a renter when it is all said and done. As I wrote in my last posting, the pitch will likely be that the homeowner’s home value will be lowered to reflect current market prices. But when it is time to resell the home, the homeowner will have to agree to hand over any profit made from the sale that exceeds beyond the newly adjusted mortgage price.
They issued huge "creative", although destructive mortgages to families and individuals, as well as speculators, to sell those large homes with big footprints. Often linked by highways, the residents of those homes spent hours in their cars, stuck in long rush hour delays as they crept along, inch by inch, toward their offices or places of work. To and fro was their routine, day in and day out. Out the tailpipes spewed fossil fuel pollutants.
With many of these homeowners losing extraordinary value in their homes, some over 50%, they are fearing the reset of their original Teaser mortgage rates, which might have been at 3%, now rising to 8-9-12%, or more. The incomes of many of these families were already stretched before the reset schedule, and now, with wages stagnant, and jobs being one step away from separation, as well as plummeting property values, millions are ready to walk away and find somewhere else to live leaving those who are and have been paying their mortgages left alone on the cul-de-sac to watch their own property values plummet. This is painful to watch, nonetheless.
We have begun to realize that the homeownership scam has been just what it was. It has been a scam, part of the Ponzi scheme, which began 30 years ago, to force middle income workers to live above their means, and borrow off of their investments to participate in the con-sumerism culture preaching that more stuff is better.
Those top-tier financial conartists working in the FIRE sector of our GDP, finance-insurance-real estate, were the ones who so loved to sell people highly priced homes that they would never pay off delaying the chance to live mortgage-free, for possibly many years, following that final payment, off-setting the inflated costs which were paid so dutifully. With interest payments over a 30-year mortgage schedule, their homes often cost them twice as much above what the actual agreement price was. In order to recoup that inflated outlay over 30 years, they would need to have the opportunity to live in that house mortgage-free. But, today for many that dream has turned into a nightmare. The urban sprawled communities will begin to disappear as more and more families walk away from their mortgages. There will actually be turned into ghost-town suburbs surrounding some of our cities.
A reason that might tip homeowners into walking away from their mortgages could occur when they hear the sales pitch they will likely be given in hopes of swaying their emotions attaching them to place and neighborhood when their bankers come a callin’ with new mortgage agreement papers for them to sign. Once they are done reading the stack, they will likely figure out that they will basically end up as just a renter when it is all said and done. As I wrote in my last posting, the pitch will likely be that the homeowner’s home value will be lowered to reflect current market prices. But when it is time to resell the home, the homeowner will have to agree to hand over any profit made from the sale that exceeds beyond the newly adjusted mortgage price.
For example, if the home was originally sold for $500,000 and was adjusted to the current value of $250,000, any amount over $250,000 when sold might have to be handed over to da' Man. This would mean that the family, for all essential purposes, will be renting the home even though they had been paying a mortgage, with interest, as well as putting up that initial down payment, and financially adding to the improvement and maintenance of the property. I am not saying that this is unfair, since taxpayers would be offering mortgage assistance, if the homeowner does wish to remain in their home. All I am saying is that some might say, "So, what's the point of staying?" We maybe looking at 50% of homeowners walking away from upsidedown mortgages.
So, is there one good reason to stay and make the deal with the devil who brought down the economy, in my belief, on purpose!? These very vampires who made huge amounts of money gambling on these mortgages derivatives should now be responsible for the destruction they created throughout this economy. In my opinion, there is no good reason to stay with the home. I don't believe that the Obama administration will be forcing the bankstas, and financial kleptocrats to give up their gains and profits to support the very homeowners they exploited as they carved up those mortgages into toxic derivatives. It may be in one’s best interest to just walk away from it all and move closer to the job, reducing one’s overall monthly expenses, save some money and just rent. No more mortgage insurance. No more mortgage interest rate. No more ball and chain commitment to a possibly dying Exburban community.
When you begin to examine the Bush Ownership Society philosophy, which did not start with him, yet had existed for decades, you realize that it was meant to lock people into a place even if it sacrificed professional and personal mobility. For many of those decades, selling one’s home was not a problem, since home prices were stable, if not escalating. But, once Little Boy Bush came around the neighborhood, that all changed and prices went sky high, and the Ownership Society housing bubble got bigger and bigger until it finally exploded turning the economy into balls of fire.
This was the only way the financial predatory vampires could get the price asset values of homes and property back down to fire sale values; but now, they will be left with foreclosed, and abandoned homes. Some might say, "It serves them right!" These vampires did not really think through their crash plan very well.
The upside to all of this is that as the nation begins to remake itself, and the new paradigm begins to take shape, families who walk away from their overvalued homes can relocate to where the new urban revivals will be taking shape. Cities such as Pittsburgh, Baltimore, Columbus, Seattle, and Norfolk, to just name a few, will rise from the rubble if they can fast forward a new domestic and exportable industrial revolution, which will manufacture light rail, solar, wind, and water energy generation systems, high speed telecommunications infrastructure parts and systems, electric vehicles and parts, sustainable food production, and non-Terminator seed harvesting systems, sustainable building materials and pre-fabricated residential and commercial structures and systems.
Just think, what if shopping malls, homes and offices were designed in such a way that once they became obsolete, or needed to be moved easily, they could be dismantled, without waste, and relocated and reassembled for use again.
If a big box store, after a few years, realized that they made a bad choice and built the structure where it no longer made a profit, could then be taken apart, and moved to a new location without waste. What if the home you were living in needed to be moved to a new location, much like a mobile home, stacked on a truck and driven somewhere else, then restacked and assembled. All that would remain on the old lot would be a slab and a flat piece of landscaped ground, which could be sold to someone else. Such a concept could be done with, for example, used shipping containers, and there will be plenty available, that could be remade into stackable dwellings.
By designing structures in such a way, a mobile society could set down roots, without necessarily renting, and then, when necessary, relocate the homes to new sites where they could be stacked back up on newly purchased or leased lots. No one would be horse tied to fixed locations, especially when property values appear to be declining.
The nation’s future will no longer look like it had for the last 60 or so years. It will be forever changed. A new paradigm. The mega-financialized Ponzi sector will be put back into their boxes and managed properly. Once again, labor MUST take back its rightful place in the economy, which should be, at least, on even par with all other sectors. No one sector should dominate the economy. Without labor, and “laborers” earning good wages, while able to spend and save money, there is no economy. Without finance, there would be no investment to bring about new ideas. But, the laws need to be changed to eliminate monopolies created by big pharma, energy producers, and other multi-national conglomerates stifling creativity, research and development, and more. New laws need to passed that reduce the burden put on manufacturing that weights them down with outrageous health care costs, insurance costs, rental costs, and borrowing costs.
It is clear that a new paradigm will be forcing Change, one way or another. The world is in crisis created by the ‘Consumer Society of Americans’ so willing to buy the cheap stuff made in foreign countries. We have been responsible for the lifting-up of emerging economies and their standard-of-living. There is nothing wrong with that, but now, our debt has reached dangerous levels, 45 million Americans are without health care, millions are ready to retire, if possible, and jobs are disappearing. Obama’s Change will need to find sources of capital, since domestic revenues have significantly declined. Other richer nations are finding they don’t have enough to spare. He must not waste a penny of it. It appears he already has. He needs to wake up to the future and the new paradigm rolling in. It is time to make it relevant. It must be a bottom up paradigm with workers rebuilding cities and surrounding areas, revitalizing our agriculture with domestic local farmers supplying their regions using efficient machines and technologies, expanding light rail and transit systems, with Green energy grids, and manufacturing that would be immediately used domestically and desired by those in America, as well as other parts of the world.
President Obama must decide which side of the paradigm line drawn in the sand he chooses to stand on: a bottom up paradigm, or the top down paradigm.
So, is there one good reason to stay and make the deal with the devil who brought down the economy, in my belief, on purpose!? These very vampires who made huge amounts of money gambling on these mortgages derivatives should now be responsible for the destruction they created throughout this economy. In my opinion, there is no good reason to stay with the home. I don't believe that the Obama administration will be forcing the bankstas, and financial kleptocrats to give up their gains and profits to support the very homeowners they exploited as they carved up those mortgages into toxic derivatives. It may be in one’s best interest to just walk away from it all and move closer to the job, reducing one’s overall monthly expenses, save some money and just rent. No more mortgage insurance. No more mortgage interest rate. No more ball and chain commitment to a possibly dying Exburban community.
When you begin to examine the Bush Ownership Society philosophy, which did not start with him, yet had existed for decades, you realize that it was meant to lock people into a place even if it sacrificed professional and personal mobility. For many of those decades, selling one’s home was not a problem, since home prices were stable, if not escalating. But, once Little Boy Bush came around the neighborhood, that all changed and prices went sky high, and the Ownership Society housing bubble got bigger and bigger until it finally exploded turning the economy into balls of fire.
This was the only way the financial predatory vampires could get the price asset values of homes and property back down to fire sale values; but now, they will be left with foreclosed, and abandoned homes. Some might say, "It serves them right!" These vampires did not really think through their crash plan very well.
The upside to all of this is that as the nation begins to remake itself, and the new paradigm begins to take shape, families who walk away from their overvalued homes can relocate to where the new urban revivals will be taking shape. Cities such as Pittsburgh, Baltimore, Columbus, Seattle, and Norfolk, to just name a few, will rise from the rubble if they can fast forward a new domestic and exportable industrial revolution, which will manufacture light rail, solar, wind, and water energy generation systems, high speed telecommunications infrastructure parts and systems, electric vehicles and parts, sustainable food production, and non-Terminator seed harvesting systems, sustainable building materials and pre-fabricated residential and commercial structures and systems.
Just think, what if shopping malls, homes and offices were designed in such a way that once they became obsolete, or needed to be moved easily, they could be dismantled, without waste, and relocated and reassembled for use again.
If a big box store, after a few years, realized that they made a bad choice and built the structure where it no longer made a profit, could then be taken apart, and moved to a new location without waste. What if the home you were living in needed to be moved to a new location, much like a mobile home, stacked on a truck and driven somewhere else, then restacked and assembled. All that would remain on the old lot would be a slab and a flat piece of landscaped ground, which could be sold to someone else. Such a concept could be done with, for example, used shipping containers, and there will be plenty available, that could be remade into stackable dwellings.
By designing structures in such a way, a mobile society could set down roots, without necessarily renting, and then, when necessary, relocate the homes to new sites where they could be stacked back up on newly purchased or leased lots. No one would be horse tied to fixed locations, especially when property values appear to be declining.
The nation’s future will no longer look like it had for the last 60 or so years. It will be forever changed. A new paradigm. The mega-financialized Ponzi sector will be put back into their boxes and managed properly. Once again, labor MUST take back its rightful place in the economy, which should be, at least, on even par with all other sectors. No one sector should dominate the economy. Without labor, and “laborers” earning good wages, while able to spend and save money, there is no economy. Without finance, there would be no investment to bring about new ideas. But, the laws need to be changed to eliminate monopolies created by big pharma, energy producers, and other multi-national conglomerates stifling creativity, research and development, and more. New laws need to passed that reduce the burden put on manufacturing that weights them down with outrageous health care costs, insurance costs, rental costs, and borrowing costs.
It is clear that a new paradigm will be forcing Change, one way or another. The world is in crisis created by the ‘Consumer Society of Americans’ so willing to buy the cheap stuff made in foreign countries. We have been responsible for the lifting-up of emerging economies and their standard-of-living. There is nothing wrong with that, but now, our debt has reached dangerous levels, 45 million Americans are without health care, millions are ready to retire, if possible, and jobs are disappearing. Obama’s Change will need to find sources of capital, since domestic revenues have significantly declined. Other richer nations are finding they don’t have enough to spare. He must not waste a penny of it. It appears he already has. He needs to wake up to the future and the new paradigm rolling in. It is time to make it relevant. It must be a bottom up paradigm with workers rebuilding cities and surrounding areas, revitalizing our agriculture with domestic local farmers supplying their regions using efficient machines and technologies, expanding light rail and transit systems, with Green energy grids, and manufacturing that would be immediately used domestically and desired by those in America, as well as other parts of the world.
President Obama must decide which side of the paradigm line drawn in the sand he chooses to stand on: a bottom up paradigm, or the top down paradigm.
Thanks for reading, jerry
Postscript:
President Obama made a statement, today (2-23-09), that he was going to cut the budget by half before his 4 years are over. I support that goal, but to convene a panel of people to solve this problem seems extreme. It seems that if Mr. Obama were to rebuild America from the bottom up, there would be increased revenue flowing into the treasury through manufacturing and workers paying taxes. Then there is the balancing out the tax system. By having those who earn more pay more taxes, and raising the dividend and capital gains tax on individuals who earn more that $1M, you might get a good start on adding revenues. How about demanding that domestic multi-national corporations that have moved jobs overseas bring those profits back in order to be taxed. That amount has been estimated to be around $450B. End the wars and that will bring back $500B. Reduce the defense and HLS department budgets and that could amount to $500B. A single payer health care system might stop middle class bankruptcies especially during a time of extreme economic hardships.
There is Mr. President. You have nearly balanced the budget! No panel required!
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