Aug 14 2010

Jobs for middle class expansion are long gone – The struggles to create jobs that will create a vibrant middle class have vanished under the foot of banking dominance.

Most Americans realize that having a job is a prerequisite to gaining entrance into the middle class.  If you work hard enough, chances are you would have access to some of the things promised to the middle class; access to affordable housing, a good education, and the ability for some sort of retirement.  That ideal has been thrown out the window over the last few decades while the expansion of banking has created a cycle of boom and bust bubbles.  The American labor force has been weakened from every angle while banking profits have soared beyond the rate of inflation (or any other measure for that matter).  In fact, over the past decade average Americans are doing much worse adjusted for inflation.  The defined contribution plan or pensions has given way to 401k/403b plans that push people into gambling on the casino known as Wall Street.  Job protection is weaker than we have seen since the end of the Great Depression.  Yet we are told that the economy is good without a solid job market?

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Aug 10 2010

The great American un-recovery: Banking failures and swindling the wealth from working and middle class Americans. Household assets off by $11 trillion from 2007 peak.

The economic profession and bankers on Wall Street have taken a hit to their credibility with missing the biggest recession since the Great Depression.  It is understandable for the average person on the street to miss something as nuanced as a tiny recession but for a group of professionals whose mission statement involves understanding the economy and then to miss the biggest economic headwinds in a century is just inexcusable. This is no tiny recession.  We have witnessed the unfortunate destruction of trillions of dollars and untold damage to the American working and middle class.  Yet we are told from these same professionals that we are in a recovery.  There is plenty of room to remain skeptical about this group.

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Aug 6 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.

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.

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Aug 3 2010

Commercial real estate maturities will peak in 2012 – $350 billion in loans coming due and hundreds of additional bank failures. Bank lending in the CRE market collapsing.

The commercial real estate disaster is sinking banks on a weekly basis.  Talk of a V-shape recovery is now largely a moot point since we are past the point of a quick and strong recovery.  The question now revolves around what we are going to face for the next few years.  Commercial real estate really is a harbinger of what went wrong in the last decade.  Banks and builders hungry for massive profits overestimated the demand for Starbucks and Macys locations around the country.  After all, you actually need money to spend and many average Americans are struggling just to pay their monthly bills.  The only way commercial real estate (CRE) was going to do well is if we had a booming population of young and wealthier professionals with more disposable income.  Yet that did not happen.

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Jul 30 2010

40 years of housing data – U.S. homes still too expensive for typical families. In 1970 the median home could be purchased with 657 ounces of gold. Today, it only requires 155 ounces. The erosion of the U.S. dollar

The last 40 years have seen the U.S. housing market transform into a market largely driven by incredible amounts of debt.  The credit card companies understood the basic notion that the monthly payment drove most financial decisions.  Even though people purchase a home with a 30 year mortgage, the implicit understanding was that in a few years the home would be sold again and yet another new mortgage would be taken out.  Housing became like the national debt in that most realized we would never get around to paying it off.  We would simply roll over the debt over and over apparently in an endless process.  Yet this can only go on as long as average Americans have an increase in their standard of living and wages.  The opposite has occurred.  For that reason, housing is expensive in today’s market.  The median sales price of an existing home is $184,000:

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