By Padmini Arhant
According to the latest reports, the current jobless rate is 10.2% with 16 million Americans competing for 3 million jobs. Apparently, this figure does not include the underemployed. The Corporate related unemployment is further expected to rise up to 10.8% by the end of next year. Another grim factor is the joblessness among the self-employed and the small business retrenchments reportedly escalate the figure to an alarming 17.5% resembling the severe depression era.
Growing unemployment is a major impediment as consumer spending is directly linked to the job market posing a downside for the entire economy. Despite, the economic growth at 3.5% along with the 9.5% annual productivity for the recent quarter, the American workforce is yet to benefit from the surge in these areas.
The most affected sectors appear to be construction, manufacturing and retail. Although, the recent stimulus signed by President Obama extends unemployment benefits for 14 weeks and 20 weeks to the worst hit states combined with the tax credits for the first time and other home buyers, the problems confronting the industries required to generate jobs is attention worthy.
Please refer to http://www.padminiarhant.com for the remaining content.
Thank you.
Padmini Arhant
Too often I hear complaints from financially struggling community associations having trouble getting banks to finalize foreclosure processes in order to forestall having to pay maintenance fees. Read more...
Hundreds of people from around the country gathered in Chicago for three days of events dubbed “Showdown in Chicago,” intended to draw attention to the foreclosure crisis and related financial problems and to call for more regulation in the financial industry.
While some protesters waved signs that read “Put people first” and “Wanted: Wall Street bankers,” others chanted, “Bust up big banks!” and “Bailout? No thanks!” Read more about the protest against the banks...
The most revealing political quote of the last year came, in my view, from the second-highest ranking Democratic Senator, Dick Durbin, who told a local radio station in April: “And the banks — hard to believe in a time when we’re facing a banking crisis that many of the banks created — are still the most powerful lobby on Capitol Hill. And they frankly own the place.”
Read more...
When the history of America from 1980 - 2010 is written it might be described as the Age of Greed and Dishonesty. There are no self-imposed ethical restrictions on business that might put the brakes on greed - individual greed and corporate greed. Somehow we got the idea that what generates the most money defines "good." In order to minimize possible government restrictions founded in any kind of ethical thinking, however slight, those benefiting from laissez faire invest in the purchase of legislators. This compensates for the fact that there are not enough such beneficiaries to win elections by force of their numbers. It is easier to buy them than to elect them; one can buy whoever wins. Why worry?
We have disdain in sporting events against teams that pile on points after having assured victory. Yet we don't seem to have trouble swallowing when we hear of individuals making $100 million a year - more money than can be spent in the productive economy of goods and services. Where does it go? To banks and other financial institutions competing with one another to offer the highest returns. Do they care about the soundness of their investment products? The recent economic collapse had nothing to do with the underlying economy in which most of us live. It resulted from dishonesty in the financial community. And what did we do about it? We pumped trillions into these crooked organizations run by crooked executives so they could keep doing what they had been doing before: taking billions off the top (taxpayers' money this time) for themselves and making more hare-brained investments with our tax money. Everything goes. In some cases, they paid back the money that saved them from oblivion in order to avoid any restrictions on what their leadership could pay itself. And we swallow hard this time, but making a hundred million a year generates an attitude. They raise an eyebrow at us. We realize that we are not in this game at all.
We do however, need health care services for ourselves and our families, especially if we're 'boomers' getting ready to check out. This is good news for 'providers' and insurers. In fact, it's great news. We don't want to die, and they can help us. Are we going to quibble about price? Hardly - at first. But inflation in the cost of 'providers' outstrips everthing else for a couple of decades. Good grief, these CAT scans are a couple of grand apiece. The radiologist likes it because he/she owns a piece of the scanner. Do you need one? Of course, says your PCP who is in the same profit-making company as the radiologist. Besides, you get the warm feeling that they are doing everything they can for you. It's a good thing you have insurance - if you're not already ill and you don't change jobs in this vigorous econonomic climate. Ooopps. Insurance costs money, too - more and more every year. And now your employer is hurting; it either stops paying for as much of your insurance as it had, or it gets an insurance company that offers you less coverage for more money. Now you're starting to feel it. You see that when you retire, you won't be able to do much more than pay for your health care. Like I said, its not a good business, it's a great business.
If you're over 65, you can get Medicare. For some more money you can also get insurance to cover the 20% not covered by Medicare and a prescription drug policy as well. It's costly, but you need it, and you can rely on it. You don't care if it's one of those big government boondoggles. In fact you are terrified that the government will change it, pull it out from under you. And now, the government is talking about change. This can't be good; it could threaten your Medicare. They are talking about Obamacare! It will kill you. It will force you to have inferior care, as opposed to the good-government Medicare that you so love. You are angry at the thought. And some politicians who think it's just fine to spend half of your post-retirement income on health care (they're covered), who accept millions of dollars from the health care industry, tell you that you ought to be worried. This frightens you.
You go to a townhall meeting. You look Satan (your representative or senator) in the eye and you scream. And why not? The guy from Iowa told you that you ought to be afraid.A lot of people are getting richer than we can imagine, and we get to be scared. We aren't in this game as players, we're the stuff that other peoples' wealth is made of. We're angry. Where should we direct this anger? At the President of the United States who has been in office for 8 months? Or should we forget being angry and start thinking about whether we really like things as they are, or whether we're just afraid. Greed and dishonesty leave a big wake.
Storyline: On June 19th if some act in greed, en masse, the global economy will totally tank. What is special about June 19th is that in the financial realm it is known as the quadruple witching hour. The final hour of the stock market trading session on the third Friday of March, June, September, and December, when in addition to the expiration of option contracts and futures contracts, which indicates a triple witching hour, the expiration of single stock futures (SSFs) also occurs.
What is extra special about this June 19th is that by raising the H1N1 Virus to level 6 in an emergency secret meeting today, establishing a global Pandemic status, it triggers the force majeure clauses in contracts. Force majeure or “act of God” is somewhat ironic because if there are acts out of greed then the very system that permitted it will collapse by an act of God. Normally a force majeure clause removes the obligation to honor a contract, due to natural events beyond one’s control. So while in reality the somewhat mild H1N1 (swine flu) virus which is hardly a threat or cause for alarm could be used as a legal excuse to not honor contracts. However the real reason the contracts cannot be honored is not a result of the virus but rather the greed and corruption of those that had been running the system which failed because of imbalance due to greed and corruption. Of course if certain numbers can resist temptation, acting from a holistic perspective, then the system, as a result of collaboration, could be reconstructed without a total failure, or maybe not.
This could really get interesting and I am starting to see that the truth may be making a play to bring certain things to light and triggering a major systems evolution, and in fact a realization is coming that will bring change. It is a bit like a game of chess.
See it does and is happening in reality; check out this Google news search for force majeure.
http://news.google.com/news?pz=1&ned=us&hl=en&q=force+majeure+
At one link we find this good question, what is the answer?
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Economic Force Majeure
Source: Blake, Cassels & Graydon LLP - Does a severe downturn in the economy constitute an event of force majeure? If you can no longer get financing because banks do not have the money to lend, can you claim force majeure because events are beyond your control?
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The answer could be yes and no, depending on the role one is playing and in what context.
Here are some perspectives I proffer.
The Global Accounting System (monetary systems) are a man made creation it is not natural. If the Global Accounting System were based on natural principles we might say it was then beyond our control, however it is not at this time. The Economic System is actually manipulated and some things are contrived by independent agency attempting to produce effect, in other words unnatural cause. We have an economic system where there are some natural market forces at work but it is really dominated by human nature. Of course there are events that influence the system both natural and man made. In this context we might say the answer is “no”.
We also have the economic participants who must in order to live and sustain themselves utilize a system that is beyond their control, it is controlled by others sometimes to the controllers benefit and not that of the economic system participants as a whole. Therefore the inability to obtain financing to allow continued value creation could be considered beyond their control. In this context we might say the answer is “yes”.
One could also open up a can of worms with something I have pointed out long before, man is a part of nature, so any thing man does is an act of nature in a greater context, of course that also means that man is subject to the laws of nature, and if doing something that causes imbalance, threatens life or creates suffering, it will be corrected or if that is no possible destroyed by the natural forces of nature. In other words when an element in nature stops listening to the signals from the rest of the elements in the system it may cause dissonance and disruption in the system and threaten the whole body and therefore for the body to survive, if it cannot be corrected it must be destroyed.
There will be much greater understanding and realizations as one completes the articulation of economics in an easy to understand manner from a scientific and natural perspective and disseminates it. This will highlight the flaws of the current systems design and destroy the illusions that it is based upon that lead to detriment not benefit.
I also note that many in executive management may not intend detriment however when seeking guidance from those with vested interests one is getting distorted or inferior advice which results in detriment to the majority and the system as a whole. Management’s key deliverable is the correct choosing of individuals or entities to play support roles which include the ability for discernment of the truth and reality behind appearances and the ability to detect a compromised agent or those lacking in capacity.
Very interesting article on the problem / disaster of trying to rescue the national banks. The large, national banks need to be broken into pieces.
http://www.dismountingourtiger.com/economics/bank-bailout-yields-collateral-damage-double-standards-poor-solutions/comment-page-1#comment-91
How can we as consumers help?
http://my.barackobama.com/page/group/AmericansforSmartBanking
Soon as we got a Democrat in the White House, a bunch of Senators claiming to be Democrats rushed to show how independent they are, declaring they won’t necessarily vote in support of the President’s agenda that he was elected to enact. As a Hoosier, I’ll put Indiana’s Evan Bayh (pronounced “Bye” or “Buy”) at the top of the list.
Mr. Obama is right to allow politicians to vote their “consciences” (oxymoron is obvious). Where he’s wrong is in promising to raise money for them. I won’t give one penny to support ANY Senator who fails to toe the line and earnestly help the President do what he promised. Many promises were made. If they’re not kept because Democrats in the Senate support powerful banks and other lobbies against the people who support Mr. Obama’s agenda, then Bayh-Bayh to them come the primary.
If self-described Democrats in the Senate refuse to push through the President’s agenda, then it’s up to us to FIND SOMEONE WHO WILL. I won’t give money to or raise money for Evan Bayh or Arlen Spector or any of the approximately eight others who have declared themselves “independent” of this cause.
They want our money and votes only to betray us to the powerful lobbyists who own them. We need to start work right now finding better people to run against them in the primaries and start raising the money they’ll need to win.
We kept McCain and Palin out of the White House. We certain can put Bayh, Specter and those other eight “independent” Democrats OUT of the Senate. CHANGE is coming to America.
Bank of America online banner....reads.....FREE CHECKING.....no service charge
The gimmick is put and maintain balance of $300.
If your balance of YOUR MONEY in YOUR ACCOUNT goes below $300 they can charge you $5.95
monthly service charge ...on ....MY MONEY.
MY MONEY in their pocket...but if is use ...MY MONEY...they charge me.
That means....I should just GIVE THEM ...$300 for life...as a CHARGE for a FREE CHECKING ACCOUNT.
I would be better off than to think it was still ...MY MONEY...as I would not be tempted to use it if it were not in MY ACCOUNT,...and get CHARGED...to use it.
xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
Then there is FREE OVERDRAFT...up to $300 .....that cost.....$36 ...on approved credit.
I was GIVEN ...FREE OVERDRAFT...after passing a CREDIT CHECK...on one account.
DENIED IT ON THE SECOND ACCOUNT......member of the bank ...for decades....V.
1. Modern Bankers seem lazy. It much easier to lend to bad risks companies or individuals, collect exorbitant fees, wait for them to default or go bankrupt and then resell any recovered assets rather than evaluate good business plans, make roots in the community, and profit when everyone does well.
2. $500,000 paying jobs are really < $35,000 jobs. With the advances in computer technology people used to have a plethora or knowledge can be replaced by adequate folks with access to internet and all the data that is now available.
3. The tough bankruptcy laws backfired. Rather than being able to collect from people who don't have assets (real estate went done), banks loaned money to bad risks, assuming they be able to collect in court or re-sell appreciating assets. Wrong, see 1.No more money to bad banks! Let the bad banks go into bankruptcy (this is the free market), sense that is where they seem to want the American people to be.
Received a blog response from Banker's Compliance Consulting Blog in part below:
"This is exactly the type of person we are trying to warn you about! How does this blog make it "apparent . . . many financial institutions are discriminating illegally"? Only someone without your interests at hand would jump to such a conclusion.
Let me make it clear. We don't recommend you hide your data or make it inaccessible. We are simply advising you to follow the regulatory requirements when releasing your HMDA data. ..."
Hmmm - Now this blog has seemingly changed their recommendation from making it difficult to obtain data to ... "we don't recommend you hide your data or make it inaccessible". Yet that is exactly what the blog has encouraged banks and financial institutions to do... make data as difficult to access as possible.
This blog is trying to warn you about a someone like me reporting Banker's Compliance Consulting Blog to the Federal Reserve for encouraging banks and financial institutions to make it difficult for individuals to access Home Mortgage Disclosure Act (HMDA) data. Now - if you were doing everything you could to make it difficult for someone to access REQUIRED data, what would be your first inclination?
Would you suspect the bank or financial institution is attempting to hide something! As I recall federal compliance laws it goes something like this "impropriety or the appearance of impropriety..."
Again - I encourage you to send a message to this blog telling them to stop requesting banks and financial institutions make it DIFFICULT for consumers to access required HMDA data and file a complaint with the Federal Reserve.
This vid was one I found on a site called Deprogram.net. The vid http://www.youtube.com/watch?v=BoA3wHi9iDE, is by a guy from the Center for Global Research known as Michel Chossudovsky. He argues that the current policies + TARP will eat up almost all of the US's GDP (which I've heard is more a service economy rather than a manufacturing economy).
What's your take on this vid after watching it?
Hmm...
EMK
Randi Payton
rpayton@onwheelsinc.com
President Barack Obama may be doing a good job of repairing the nation’s economy but behind the scenes his strongest political base is eroding due to major setbacks in corporate diversity. African Americans reached into their pocketbooks to make unprecedented contributions to Mr. Obama’s presidential campaign last year. However, if the current trend of cutting diversity efforts continues, African Americans will not have the resources to financially support the president’s bid for a second term. When there’s the no work, there’s no money.
Thousands of African American small businesses, automotive dealers and suppliers, minority –owned media outlets and their employees are feeling the brunt of the recession. Businesses cannot get loans, corporations are laying off employees at an alarming rate and domestic automakers, the second largest employer of African Americans outside of the federal government, don’t see diversity as a priority during this economic crisis.
Minority car dealers and minority automotive suppliers who had the funds to support President Obama’s first run for the presidency will almost disappear because of the current economic crisis. Automakers have been corporate leaders in diversity for at least a generation. But diversity is not being considered in the restructuring plans of the domestic automotive industry.
Automakers that championed diversity and encouraged their ad agencies to support it, but did not require those same agencies to practice it, are now dropping diversity advertising and marketing altogether or making significant cuts. Corporations are too concerned with their survival to focus on diversity advertising and marketing which should be an essential part of restructuring. However, it has been looked at as affirmative action instead of a need to reach more than 30 percent of American consumers.
Minority dealers and suppliers who represented a huge financial support base for President Obama during his presidential campaign cannot get financing to operate their businesses and they have lost the support of larger companies that cannot get credit themselves. Not only has progress on this front ceased but all these businesses are closing at an alarming rate.
Small minority businesses experienced huge growth; their owners who often used equity in their homes to finance their start-ups can no longer do so and SBA and VA backed financing is frozen. The banks simply will not loan, although the Obama Administration has pumped money into them to free up the secondary finance markets. Banks either don’t have the cash or they are using the federal money to generate interest payments and to repay the government to escape federal oversight. But small minority-owned businesses have been left out of this equation.
African American employees, who were making inroads into upper management positions when diversity was a corporate priority, are now the first to be cut during tough times. Their input was never really valued; even those who have proven track records of success.
One 30-year senior executive at General Motors told me that this is the worse time that she has ever seen for diversity. Progress in that area is quietly being set-back. President Obama needs to appoint a diversity czar to protect the interests of minority consumers.
Other black politicians as well as President Obama should also be worried because they all need financially healthy voters to support their political campaigns. The ultra conservatives have yet another trick up their sleeve to destroy the economic base of minority consumers. They have one goal in mind – force the domestic automakers into bankruptcy and destroy the unions and the middle class. The current trend is having a devastating impact on African American middle class workers and it would make it difficult for all African American office seekers and incumbents, not just the president, to get future financial support from the black community.
Randi Payton is the CEO & President of On Wheels Media, which publishes African Americans On Wheels, Latinos On Wheels and the www.onwheelsinc.com web site. On Wheels will launch DECISIVE magazines and web hub summer of 2009, a consumer media to help consumer in multicultural market make decision on products and services. Get free digital copies of On Wheels magazines at www.onwheelsinc.com
"The HARD reality "
With the mass of job losses, the factories closing, and life changing in all areas and modifying the conditions within our landscape of the nations- We are facing some great challenges, that will take some great modifications to rebuild our nation. It has to start with our people.
Logic is simple, with the jobs losses come a series of other attributes, which are not disconnected- such as wage reductions, and lower start wages, in some areas people have engaged work modification, to help other co-workers with - days off, and other modified working circumstance. We are yet, to learn what further impacts are to come. But it is a certain fact- other impact will come. Credit denials cannot be sustained in the current climate if we hope to be a nations which recovers, much of americans are not in good standings based on the current situation, from the massive home defaults, to other types of credit default which is logically a symptomatic result of unemployment and earning irregularities form once good paying jobs, and other jobs that simply vanished. It is obvious and very overt in the true realism.. that without business lending being modified and infused with available capital- and the ease of restriction on lending the capital, the situation simply becomes more critical.
We've seen it with Banks, they needed massive cash infusion, simply to function, We've seen it with major manafactuers, they needed massive cash infusion simply to keep operating, then it is without a doubt, logical that small business equally so needs infusions of lending, to continue operating, and to modify their operations to improve their opportunity to earn better income - surely it also impacts the average citizen, no less than it has impacted the institutions of finance and it equally impacted the product and service providers of every sort. So how can we assume it will not impact the average citizen. and small business.
We further see, the nation cannot rely on the banks to be fair in their understanding, nor their assessment which support their denials of lending, yet they were the culprits who caused the problems, and now they continue to damage and escalate the problem by locking up the lending of funds provided to them, by the same public unto whom, they deny loans, which is the American taxpayer, the American small business. Not only did they get large cash infusion, they also got SBA guarantee, and still they keep their standards beyond the ability of business and individuals to attain- and the direct result is, it further clogs our system and delay our recovery. Our Government would have come out better to directly lend to small business, and by pass the banks.. as its evident the banks will not play fair, nor will they give reason to the same reason they themselves were in cash strapped or in default and needed support American Banking.. is due for a massive overhaul, and possible more government intervention, even taking over their operations if need be, to get cash flowing.
People working in industry, regardless of the nature or type- may need to find ways to be of more reasonable mindset when dealing with the mass of people who are facing challenges, because no indistry is safe nor secure at this stage of the economice situation- and tomorrow may find many facing what others have already faced - each person may elect to be of care in their consideration when dealing with people in the climate of today. Example, people who work collections- it serves no purpose to be rude, pushy or even down right nastsy, because it can't gain any more than what people can afford to pay- and truth is if people could pay to be current, they'd not be dealing with the massive defaults which are nation wide.
Some have already made provision, such as Auto Dealerships now offering to make payments up to 12 months if people happen to loose their job due to lay off , downsizing or the company simply goes out of business. These are business who face realism, and address real life situation with pro-active modifications. Its a way industry as to the automotive sector, has made timely adjustments, to avoid destroying individual credit and offering up means to assist.
Our nations is for certain due for some serious mind adjustment in the current climate- many adjustments people are not willing to make or face, but reality shows clearly if we are to rise out of this devastation - we have to think different, and we have to do it in ways, that many fight, but see not the true nature of it all- some fight stimulus programs, only because they are living comfortable at the moment, and their comfort has given them a diminished compassion, which shows the lack of true understanding which impacts the nation, and people who currently have disposable income, have not come to terms with the true nature of this crisis in our nation.. but eventually they will awaken, and being late in their ability to awaken, they may be in more shock than the rest of the nations, because they have blinded themselves far longer than the rest of the mass of people within the nation.
A nation with the dire situations we face- has to face some tough realism, and that will no doubt have to come in the form of modifying their lending practices- to make provisions to lend - to distressed business, and challenged individuals. We saw the move by the Federal Government to authorize 15 Billion to the SBA- but those funds are held hostage by the banks- when the whole mandate and purpose was to make available lending by Federal backed support of 15 billions - to keep distressed business in operations. It requested immediate loans be made to cover, operating expense, bills, and to maintain their ability to support operating. For such a point to be addressed, has to regard, the need justifies the facts. If this money is needed to cover operating expense, bills and to plan their continuance- it also regards, the nature of delinquency which is evident. when the business become challenged. Its an attempt to avert further business closure, to avert further job losses, and the infuse the system with capital to support means to regain some level of stability of business owners. It also can afford business owners to modify their offering and look at optional ways to improve their income generations.
If this does not happen, then business credit will further erode, and that will further erode personal credit- as business owners are faced with a simple reality - Pay business expense- or pay personal expense - Logic is , the Business has to consider its business expense as a first priority- because that is the means to earn to pay personal expense. If it allows the business to fold, then not only are the business expense suffering a default, but the personal expense suffer equally as well. then the business face the dire situation of both a lost business and a loss personal life environment, such as home or apartment, and other things which are part of basic living.
This in turns makes it even more difficult to restart a business, as well as it makes it more difficult to re-adjust to meet basic living. The dilemma has more factors within it, which must be considered.. If a business owner, has either worked their business for a number of years, or been otherwise employed and transition into business- they may or may not have a college degree- which many jobs are pushing as a basic requirement; Then what options exist for the person who looses their business ? their employment options are thin, because of the required degree to get a suitable paying job, even they may have capability to do the job, but with a market flooded with people holding degree's, it become a mass challenge. compound this with age factor- say a business owner is either near or above 50, and the job market is flooded with people age 21-48, then what are employers going to do? We can't be illogical to know what simplicity is, the employer is going to take that person between 21-48 before they take the person over 50, and they are going to take the person with the degree over the person without one.
America can't retrain a mass of millions within a year or so, it is not even a practical concept that such can be done, not to a level where they can compete in a many categories, where people who have lost jobs in those same categories, are equally so in the job market. so the quandary of factors, are more real than unreal- regardless how unpleasant it is in the reality- the way the systems work, we face these challenges.
It's not only imperative that our system finds its means to be modified- We may have to go back to "pre-melt down stats", to manage business loans, as to what peoples credit standing was prior to Jan. 2007. any Stats after Jan 2007, were in part a result of the Financial Community and Real Estate market tanking and starting a snow-balling effect , aided by giant ponzi schemens, such as Madoff, and Stanford, each of which the SEC failure, and our entire systems failure to address and make efforts to correct, all of which was not undertaken to make the corrections, We allowed short selling, which was a known culprit in the 1929 Crash, we allowed it to take places and force more corporate failure, and played fuel spike games, trying to bleed the public of fake revenue to fuel a faletering government which simply, ignored the want or need for regulatory control and governmental governance to assert its position to stand firm as a system designed to manage a nation, capatilism went wild, and usurped government and people began to chant, more removal of governance from our system, which is a prime element that lead to anarchy within our economic systems, and erodes their stability, and undermines the integrity of our financial functions, - which is more relative to the trauma caused by the financial community selling un-backed paper to the world, and creating derivatives that were mere collusions that result to be massive pyramid schemes, and started a spiraling down fall of our economy- True data puts this situation all the way back to mid 2004- which found it taking hold of economic demise in the early stages of 2005 with resounding impact- and for sure by 2006, the downfall had begin to take its fuller form, and 2007 the snowball started rolling and consuming more and more of the nations... by mid 2008, it was in total free fall, as if someone dropped a lead weight from the top of a 100 story building, it simply picked up speed, and by fall of 2008 the crash was certain.
Unfortunately-- the current conditions require swift and immediate actions - the sadder reality is the partisan fight, or a republican agenda, which ignore its own faults, and denies the reality which is a direct result- and their claim is to let it all collapse, so the wealthy can retain their strangle hold on the nation. But as a nation, that must think of its future, not the mindset to preserve a near monarcy run by the wealthy- our nation must think of the nation and it's people, and its economy- and not fall further prey to the masters of greed, who brought down a nation and its economy.. We can no longer afford their brand of controlling our nation and influencing our government at the expense of the people, the nation and its international standing.
We have no choice but to return to become a nation that believes in its people, and after over 400 plus years, of straying from its own constitution, it must see all people as equal beings in a system of democracy, which is one vote for one person.. not votes being bought away by lobbyist and the agenda of a nation controlled by the wealthy throught their lobbying acts. It has take us over 400 years and a economic collapse- to finally be forced to awaken - to regard American citizens as a whole- and learn how to function to support the people, not the wealth masters, who hijacked a nation for over 4 centuries.. it must now become again .. American, where we stand together or we all fall.
These are reality spectrum of the big picture- they must be regarded for the truth they show- Many agencies both for profit, charity and even program that held massive pensions, and a variety of trust were dependent on their investments, began to simply collapse. No amount of individual business acumen could avert the disaster. it was simply beyond the control of the individual business owner, as well as the individual employee- We are yet to see, the coming challenges of personal credit irregularities- which does not mean people are unwilling to pay, they simply don't have the means to earn to meet the basis of paying, but the true matter will go far and beyond simply consumer credit, it will impact the ability of even utility payments as well as other expenses. many of which there is no means to cut back, on basic needs to the level that would meet a no income position.
this makes it dire and urgent that small business funding must be engaged, and it must be engaged with the same fevor of invested support which was afforded to the multi-national corporations and financial institutions. and the anti-help sentiment within the nations has to fade into being a memory, and we must become a nation, that believes in itself, and its people, far and above the nay sayers, who wants not to see our system support itself and its people.
We can't sit back an think the wealthy will save us, because they are of many who supported the robbery of a nation, waiting of inlflated returns from investments they knew were based of false paper, and an over inflated stock market returns. When they saw the truth being revealed to the public, they took their money and ran, they dumped it in offshore accounts, and tucked it away. leaving a nation more despaired- all for the sake to hoard their gains- which were many derived at the expense of the nations integrity, the financial economy's ultimate demise.
There may be a mountain of concept to deny what is real, but truth shows clearly- something must be modified, and we must find a way to rebuild small business ownership, and support the development and growth of small business, from start-up, to recently started business, to long time existing business. Or we simply falter as a nation. No nation on the planet can be strong without business in and upon its shores, no community can prosper without business as its backbone, and no city can support its stature of a city and maintain its stability without business ownership being its prized mechanism, nor can any city grow, without the infusion of capital gained from business revenues.
We can sit.. and stay in denial mode- and simply allow more things to erode, or we can bite the bullet of truth, and free up the lending, and push to support an expanse in the business creation within our communities, our cities, and within our states.
We've become a nation, that hates to think, and one that loves brevity, so much so, until we detest thinking anything through- we get distressed at any conversation that has over 20 words within it, and then we claim we don't understand, or in some case we can't understand, because we simply get distressed at the inference that we may have to actually think.. People like to stand on high minded concepts and claim what another should have done and could have done, but they ignore that a economy that imploded from the top down... creates a pile of rubble at the bottom. so claiming false pride about hindsight does not make one a genius- it is the developing of ways to work ourselves out of this mess, is where mans intellect is best put to use. We all know, and if we don't know its because we were not paying attention., that our current situations is the result of a run away system, which was allowed to export our jobs, sell off our factories and allow small business to fold over for the sake of major stores, who sold us massive quantity of foreign made products, and simply eliminated the localized small business. and we sit idle while community after community fell, city after city, cut services, laid off people, stopped hiring and canceled even services that were core in necessity- and still no one wanted to stop to think.. no one cared to think, and people simply fell prey to relying on corporations to save us.. and they were the culprit who brought the cycles of demise to escalate. and still no one payed attention, as the employment figures increased, and more cities found their basic budgets not able to meet its objectives. How could it, when it had allowed its small business to vanish, and left itself dependent on corporations, that have been spinning in a outsourcing craze for over 30 years. and it dawned on none.. to support and pump the funds into creating more small business to fill the vacuum left by outsourcing corporations and downsizing corporations.. We did nothing.. and remained unaware of the need to focus on building small business back as the foundation of this nation.
Foreign countries not only ramped up their corporations, they fueled a great expanse in their small business ownership- and they out paced us in every economic indicator of growth- they uplifted their standard of living, and supported their cities to develop. all the while- we sit back and watched our erode, and fall apart... all while no one wanted to think beyond brevity.. if anything contained beyond 20 words.. peoples minds simply shut down. and they claimed distress, and were ready to go out and seek entertainment to avoid thinking.
Today.. people flat out resent thinking, and have a massive disdain for anyone who care to engage thinking, sharing ideas or seeking solutions - people would prefer to claim another is a dreamer, or anything to down and demean and even discredit them. If you try and think in related terms and inter-related ideas.. people say it,s too complex, and that it needs to be one dimensional.. or they simply reject it on the spot. But how unwise is that.. it ignores the fact, that even the simple gas stations, are now "inter-related components, which house, the same as the once corner market, and the fast food eateries, while they still dispense gasoline.. Now if that is not symbolic, how we have to think in multiple inter-related components.. then what will it take for people to open their eyes so their mind can expand to see the realism.
What does it take... it takes creation of business- but the support of compounded concepts, that offer a multiple of variable offerings, But,... unto a society, that has a disdain for thinking.. it shows in our schools- they try to teach the same ways they did in the post 1950's, when the minds of youth are expansive far beyond the tradition means, so the administrators don't want to think in terms of change. and the students, want to think, but they are held in check, by an antiquated system, and not allowed to think to their capacity. so they simply get bored with school, and our drop out rate increase each year.. But we are yet, unaware, that even now toddlers can read at the age of 2, with the tools provided.. but people still want to talk to toddlers, with the gurguling sounds, that means nothing, and they consider it baby talk, to be something humorous... and they simply diminish he capability of even the toddler.. by assuming what they can't understand,...
Its wihtout a doubt.. someone will come and read this and say.. "he makes not point"... because they don't want to see the pointers, which interlink with many other pointers, they want some simple one point summation.. and life is never a one point summation. everything has a connection, if people are willing to think deep enough to seek and find the connections.
People even invested their money, with a leading comment- of saying to brokers ' We'll I don't understand anything about the finances, but if you say so, here's my money" then when things collapsed.. they claim.. " well I just did not know".. but, they refused to think, they did not want to think, they wanted someone else to do it for them, while they go on in search of another "good time jack and jane" holiday.. and now reality come back, to find the nations economy has simply crashed... and now people claim to be too distressed to think...
We have to think outside the box of convention- and find news way to embrace the challenges we must undertake- and we have to become a society that is willing to help itself and each other, and let go of our anti-help mentality - with the insidious presumption.. of thinking, this is America.. everyone should have what they need, without any assistance ... and that is simply not a reality, nor was it ever a reality, but a delusions of people who had become high on themselves.. ready to grandstand and boast about what they have, and down others for what they don't have. and that fueled a anti help society, and that lead to the downfall of a nation, its economy and its eroding social structures.. and what set in was "bigotry of every sort"..
We have to become less of multi variable bigotry and realize that as a nation we need to help ourselves, and we most certainly must find a way to help each other through our system which support a nations growth and individuals to again be able to rebuild this nations as a collective . or we will find our great nation... less of stature, and talking only of how great we use to be, rather than how great we can become.
We offer foreign arrivals more assistance and simplified means to get it, than we offer to American born citizens- ( if you doubt that, research it for yourself) eventually a nation may become aware of that reality- even in that system there is bias, because depending on what nationa a foreign arrival comes from, determines one group to get more help than another group.. But we have to find a way to help american people, with the same drive and determination we halep foreign arrivals. Our nations has great work to do.
The bankers have cheated our system, our people. They have stolen our life savings and ruined our economy. It was them who stole, not us who asked for too much or acted irresponsibilly. They gamed us, and now we suffer to bail them out. Why? They are not gods, they are pretenders and ghouls. Lets make a society without them. Lets make a society for the people. s/henry
Dear President Obama and Secretary Geithner,
I have read extensively about the issues of this crisis you are both facing and I certainly sympathize with the situation. However, as pretty much the average American, I wonder why this is so complicated. We tend to over think, when simple solutions might be the best. While I do not have the knowledge to put all the numbers together, I do look at the situation and think, why should the investment markets continue to have their risks covered. They knew what they were doing or if they did not, then they deserve what they are getting.
But the middle class American is the one that cares the burden. So I end up asking, how do we get out of this financial mess? At this point, we have a two-pronged issue. One, we need to stabilize the financial markets by allowing there to be some understanding of the risk in the loan portfolios that the banks have created. Two, we need to provide consumers with some added income to spend to get the economy rolling. So the question is how to we accomplish this?
To me the answer is found in a very simple and straight forward process.
Step one, all consumers would be eligible to go to the bank of their choice and refinance their primary home loan. The process would be:
· Have an independent appraisal done.
· This appraisal would be used to issue a new loan against the property the terms would be 4.5% interest for a maximum of 30 years.
· The amount of the loan would be the “current” appraisal value, capped at a 20% reduction from the original appraisal value or the amount owed on the current loan.
· Only primary residences would be eligible.
· The banks would send the revised loan total to a fund set up and managed by the government. The existing creditors would then apply for payment from the fund for the note they hold against a home. It would be up to them to unravel the CDO and figure out who owns what and make claims against the fund. The fund would pay out the “new loan” amount as payment in full on the CDO’s.
Here are a couple of examples:
Example 1 - Home purchased in 2006 for $300,000, 6.5% 5 year ARM, nothing put down. Current outstanding loan payoff is $290,000 and monthly payment is $1,896.
Reappraised in 2009 for $225,000, new loan created for $232,000, 80% of $290,000, at 4.5%, 30 year loan. Monthly payment would be $1,175.
Government fund would receive $232,000 to “payoff” current debt holder. Current debt holder would get $225,000. Consumer would have security in home at a new adjusted value and an additional $721 per month to spend, assisting in an economic recovery.
Example 2 – Home purchased in 2000 for $300,000, 7% interest, 30 year mortgage, 20% down, current payoff $250,000. Monthly payment $1,729. Does not need refinancing since home has not “lost value”.
Reappraised in 2009 for $295,000. New loan given for $250,000 a 4.5% for 30 years. New monthly payment $1,266.
Government fund would receive $250,000 to “payoff” current debt holder. Consumer would have security in home at a new adjusted value and an additional $463 per month to spend, assisting in an economic recovery
Couple of other keys to making it work:
· No credit check, if the person is in the home and is not over 60 days late, they get a loan.
· No title search, assuming they bought the home and a title search was done.
· Simplify the closing process to minimize cost, government pays 100% or have the banks cover it.
· All loans must be done through the banks, can not be resold by the banks for a period of 5 years.
While I know there might be issues this seems to address the two main issues facing our country from the economic point of view. I wish you well in your efforts.
Please let me know if you need any clarification of this thought process.
Larry
Geithner & Bernanke need to read these articles. I don't pass them on as a way to bash their efforts or criticize them. I feel the points made in these articles are worth evaluating:
Ben Bernanke Is Still Stuck in the 1930s
Posted Mar 16, 2009 03:47pmEDT
by John Carney
Amid growing concern about a populist backlash against banks and Wall Street, Fed Chairman Ben Bernanke appeared on “60 Minutes” over the weekend to explain recent financial rescue efforts.
When asked about whether letting Lehman Brothers collapse last year was the right move, Bernanke replied: "There were many people who said, 'Let 'em fail.' You know, 'It's not a problem. The markets will take care of it.' And I think I knew better than that. And Lehman proved that you cannot let a large internationally active firm fail in the middle of a financial crisis. Now was it a mistake? It wasn't a mistake for the following reason: we didn't have the option, we didn't have the tools. All the Federal Reserve can do is make loans against collateral," Bernanke said. In other words, it wasn't my fault.
From The Business Insider, March 16, 2009:
Today's crisis isn't a replay of the problem in the 1930s, but last night's 60 minutes interview with Ben Bernanke made it clear that our central bankers don't understand the distinction. Bernanke's academic career was spent studying the policy responses to the Great Depression. His analysis suggests that the Fed made two errors:
· Central banks allowed the money supply contract sharply. "Price fell. Deflation. So monetary policy was, in fact, very contractionary. Very tight– during that period," he said last night.
· They permitted bank failures. "And then the second mistake they made was they let the banks fail. They didn’t make any strong effort to prevent the failure of thousands of banks."
The first point, about money supply, is a rather orthodox position that was popularized by the University of Chicago's Milton Friedman and Anna Schwartz in their book "A Monetary History of the United States." They argued that in the 1930s, the country and the Federal Reserve were faced with a liquidity crisis in the banking sector. As banks failed, depositors panicked and bank runs began. This led to a cycle of bank failures.
"If the borrowers hadn't withdrawn cash, they [the banks] would have been in good shape. But the Fed just sat by and did nothing, so bank after bank failed. And that only motivated depositors to withdraw funds from banks that were not in distress," Schwartz explained in an interview with the Wall Street Journal several months ago.
Notice that there is a subtle--but extremely important--difference between Schwartz's analysis and Bernanke's. In Schwartz's view, healthy banks were failing due to a liquidity crisis. This could have been prevented by adding more liquidity. For Bernanke, even the failure of unhealthy banks should have been prevented. This is a serious departure from the historical precedent.
Bernanke's approach is premised on the idea that there will be a crisis if you don't rescue a failing firm. But there's no evidence for that. In fact, Bernanke's approach probably makes the problem worse. If bank runs were caused by an inability of depositors to distinguish between healthy and unhealthy firms, Bernanke's approach is actually creating this same confusion.
"The market knows when a firm isn't sound," Schwarts told William Cohan in a separate interview. "And if the Fed didn't behave as if every failing firm is too big to fail, then it would permit the exit of firms that weren't really viable and the market would recognise this as a just decision. It's not the job of the Fed to be intervening to help such firms. People are knowledgeable. They knew that there were troubles with Lehman."
"If they're going to go into the business of rescuing every failing firm," Schwartz said, "we won't have a capitalist system . . . People are responsible for the decisions they make. If they've made wrong decisions, lost money and don't have the funds to operate, well, it's time to leave the market. And that's what the Fed's responsibility is, not to shore up firms that have no reason to continue."
Way back in October we described this approach as fighting the last depression while ushering in the next one. Unfortunately and depressingly, it seems that Bernanke is immune to evidence or argument on this subject.
Fighting The Last Depression While Ushering In The Next One
John Carney
Oct. 16, 2008, 1:52 PM
So why isn't the bailout working? They say generals are always fighting the last war. Now Ben Bernanke, who was a financial historian before he became a World Saver, may be fighting the last depression. Unfortunately, our current economic crisis is not like the one we faced in the 1930s. It's almost its photographic negative. Policies designed to avert the last depression may actually be prolonging this crisis.
In the Great Depression, banks that were otherwise solvent, if not entirely healthy, were being brought down by panic driven bank runs and a lack of liquidity. That truly was a liquidity crisis. The Federal Reserve had it within its power to support the banks by adding liquidity but it refused to do so. Since then an academic consensus has developed around the theory that it would have been better for the Fed to take an active role in preventing the crash of solvent financial institutions.
Our problem is very different. As we've seen from the wreckage of Lehman Brothers, Bear Stearns and Merrill Lynch, many of our financial institutions are insolvent. They aren't healthy victims of bank runs. They are ailing institutions barely kept alive by frantic rounds of capital raising. The lessons of the Great Depression simply don't apply here. In fact, we're probably making things worse. Allowing insolvent institutions to fail and requiring worthless and worth less assets to be fully written down would provide transparency to the market. Instead, we're dedicated to the post-Lehman proposition of "Never Again." The various programs of our government continue to obscure asset pricing and conceal insolvency. This means that you can't trust the market to tell you which firms are failing.
Twisting the arms of bankers to lend to institutions that may be insolvent is a recipe for deepening the crisis. We've just been through a period of malinvestment--we spent too much borrowed money on junk. Borrowing more to spend on junk only digs us in deeper.
Bank lending won't get going again until trust in the markets can be restored. Fighting a Great Depression era problem probably won't help. More transparency, which means more write-downs and failures, is probably necessary if we're going to get through this. Unfortunately, we're still sailing in the opposite direction.
