Oct 10 2011

The wonder years – over 70 percent of GDP comes from personal consumption. For the past decade home equity and credit from other sources fueled growth because of falling household incomes. What happens when credit contracts and home equity evaporates?

In a debt based economy a credit crisis is similar to an uncontrollable virus spreading from house to house.  The slow infection hibernated for decades until it went into a pandemic.  It is troubling to see how the middle class is slowly being dismantled.  However there is one silver lining of the home price correction.  […]

Oct 6 2011

How investment banks turned housing and student loans into a toxic and financial disaster – Middle class largest asset coopted by banking sector to raid and speculate on. Financial sector nearly 30 percent of all corporate profits in U.S. In the 1950s it was under 10 percent.

Most Americans pull their net worth from their investment in good old housing.  It is the biggest purchase most will ever make.  And because of this, after the Great Depression, housing was a boring yet stable investment class.  It had to be.  This is the cornerstone of wealth for most Americans.  Banks used to do […]

Oct 3 2011

Living paycheck to paycheck with the housing albatross – Survey finds one in three Americans unable to make their mortgage or rent payment beyond one month if they lost their job. 61 percent unable to make payments beyond five months.

One of the unnerving revelations brought about by the current recession is how many Americans are living precariously close to the economic edge.  The Band-Aid of credit cards, home equity loans, and other vehicles of debt masked the problem for many years.  Debt was rolled over on a continuous basis and as long as the […]

Sep 29 2011

The punishment of the American saver – JP Morgan Chase CEO makes 843 times the median household income and pays his Chase customers 0.01 percent on their savings.

The current financial system is designed to punish old school savers.  By definition in our debt based economy those who save are actually taking fuel out of the consumption based economy.  Spendthrifts are the high octane that keeps things spinning even if it comes with a high debt price tag.  You see this occurring in […]

Sep 26 2011

The Big Change: Massive financial volatility and the occupation of Wall Street – when the middle class breaks protests will hit the financial streets. Poverty in the suburbs and rising food costs.

When the basic costs of living move up there is bound to be shocks deep in the economy.  As we mull over the humbling Census data, it is clear that many Americans are struggling in this modern day economy that protects the banks at the cost of the majority.  Let us call a spade a […]

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