May 22 2010

America’s wealthiest 25 percent of households own 87 percent of all U.S. wealth. How the middle class face growing income inequality in the new era of the psychopath corporatocracy.

A true measure of economic vitality is measured by wealth.  We can look at incomes or other measures of productivity but real wealth is measured by net worth.  Who controls wealth in the U.S.?  According to a study from the Joint Center for Housing Studies the top 25% of U.S. households control 87% of all wealth in the country.  That number comes out to a nice hefty sum of $54.2 trillion.  If we look even closer at income distribution, we will find that the top 1 percent in our country control 42 percent of all financial wealth.  By all measures being able to acquire a piece of financial wealth was the hallmark of the middle class of previous years.

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May 20 2010

FDIC next government trillion dollar bailout? Since January of 2000 to October of 2007 we had 27 bank failures. From January 2008 to May 2010 the FDIC has closed down 237 banks. Why 1,000 bank failures will occur before the Great Recession is over.

The Federal Deposit Insurance Corporation (FDIC) will be the next billion and possibly trillion dollar government bailout.  We have the FDIC that insures over 8,000 banks with an insurance fund that is in the negative.  From 2000 to October of 2007 only 27 banks were closed down by the FDIC.  Nearly eight full years and 27 banks were shut down in the face of epic gambling from the banking industry.  Since the recession started, the FDIC has closed down 237 banks with more to come.  Without a doubt, given the enormous amount of bad debt and commercial real estate loans we will have 1,000 bank failures by the time this recession is over.  Is this so hard to envision?  In April, 17 banks were closed and so far in May, 15 banks have seen their doors shut.  The rate of bank failures is increasing.

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May 18 2010

5 ways that Wall Street and the U.S. Government punish the American saver – Artificial low interest rates, understating inflation, pushing people into the stock market casino, and destroying yield on traditional safe investment vehicles.

The only savers in the U.S. seem to be the investment banks.  Four of the big banks on Wall Street turned out a perfect quarter as they have managed to leverage the zero percent funds from the Federal Reserve into government securities.  At the same time, middle class Americans would be lucky to get 0.1 percent at a bank on their savings account.  Then you have Social Security coming out stating that there will be no cost of living adjustment since inflation is supposedly under control (except for food, healthcare, and other daily use items).  Americans are being punished if they are savers and prudent with their finances.  The current system is based on turbo capitalism and the fuel that runs this system is debt.

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May 17 2010

Shadow inventory sales for years to come – 1.6 million distress sales in 2010, 1.6 million in 2011, and 1.5 million in 2012. By summer of 2011 REO pipeline will rise to 536,000.

Wall Street as usual enjoys denying facts until they become so obvious to the common person on the street.  By then, it is too late to react.  For example, subprime wasn’t a problem until it lit the fuse that set the global economy into a downward tailspin.  Analysts at Barclays Capital are now coming out giving full attention to shadow inventory in the markets.  Even though their report states that the pipeline for shadow inventory may be topping out, we have such a large number of distress properties in the pipeline that we won’t see any draw down of distress sales until 2012.  And ultimately the sales end is what keeps prices lower because distress properties sell for less.

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May 15 2010

Solving the massive debt problem with more debt. American consumers carry as much debt as annual U.S. GDP. Credit card debt declines but auto loans and student loans go up?

The Federal Reserve has come to the aid of bailing out Greece.  I wonder how many Americans even know that billions of U.S. dollars are going to prop up a failing European country in Greece that got into the mess they are in because of too much debt.  In the end, the Euro is still crashing down because Greece is merely one country out of many with massive debt problems.  Middle class Americans don’t need an extensive lesson in economics to understand this.  If you take on too much debt, at a certain point you will end up paying the piper.  This doesn’t matter if you spend too much money on clothing by charging up your credit card or buying a home that you clearly couldn’t afford.  In the end, a bill comes due.  Unlike Wall Street who operates the Washington D.C. purse strings, you are small enough to fail in their eyes.  If you purchase a home that is too expensive, you will either have to pay the mortgage or end up in foreclosure.  Giant amounts of debt have ruined individuals as well as countries.

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