From Bloomberg News; writer is Brian Louis
Amid all this attention on AfPak and the drone strikes, a reminder that the war abroad IS the war at home. Every million we spend "over there" could have been part of the economy "over here." Terrorist threat or no, this is a maxim of war that dates at least to Persia and Greece.
Forgive me if this is oversimplification, but when the banks create a financial crisis (ability to make payments on debts disrupted; said payments still due), homeowners lose their homes and either move in with family or start renting elsewhere, lose the equity that was coming from home ownership (plus any consumer lending power that comes with said equity: see "decreased demand for goods and services") and the government intervenes to help the banks continue to lend, to create more consumer debt ... and who becomes the new property holder (even if the property is sold off to a hatchet man repossession company who re-sells repossessed homes, the owner is still ...): Banks.
Big bank, little bank, most banks are owned by ... other banks. Who ignited the fire? Mortgage-backed securities, collateralized debt obligations, credit default swaps ... Banks.
It's kind of like paying taxes to maintain a military that, instead of defending the borders within which you live (relying on someone else to protect your property and the lives of your family), armed men come to your house and haul some family members away to camps while shooting the others. "Sorry, your lease on being alive and free ... has expired. We have come to collect."
Agreed that's a little reactionary, but who is protecting these banks from regular people who have nothing left to lose? More importantly, why is a fifth of the population so disenfranchised and disunited that they aren't desperately defending their lives--AND BLAMING THE BANKS?!! Are they clinically depressed and overly medicated? Is every service shut off except for 150 channels of cable? Upon this I dwell, and this confuses me.
Here's an excerpt of the Bloomberg piece:
May 10 (Bloomberg) -- More than a fifth of U.S. mortgage holders owed more than their homes were worth in the first quarter as repossessions climbed to a record, according to Zillow.com.
Twenty-three percent of owners of mortgaged homes were underwater during the period, up from 21 percent in the previous three months, the Seattle-based property data provider said today in a report. More than one in 1,000 homes were repossessed by lenders in March, the highest rate in Zillow data dating back to 2000.
Underwater homes are more likely to be lost to foreclosure because their owners have a harder time refinancing or selling when they fall behind on loan payments. U.S. home values dropped 3.8 percent in the first quarter from a year earlier, the 13th straight period of year-over-year declines, Zillow said.
“Having a lot of underwater homeowners will add to the downward pressure on house prices,” said Celia Chen, senior director at Moody’s Economy.com in West Chester, Pennsylvania. “We do expect that home prices will fall a bit more.”
Bank repossessions in the U.S. rose 35 percent in the first quarter from a year earlier to a record 257,944, according to RealtyTrac Inc., an Irvine, California-based company.
Showing posts with label financial crisis. Show all posts
Showing posts with label financial crisis. Show all posts
Saturday, June 12, 2010
Tuesday, October 27, 2009
News from the Underwire: Highlights of the Underreported
At the opposite end of the spectrum from the joyous outpouring at Wall Street's Dow Jones Industrial Average closing above 10,000 for the first time since 1999, the United Nations Food Program announced this month an enormous lack of food aid to hungry people all around the world. International food aid, both from public funds and private donations, will meet massive shortfalls in the next year largely due to the effects of the global economic downturn.
A Sept. 16 Reuters story, http://uk.reuters.com/article/idUKLG270557 quotes UN World Food Program (UNWFP) executive director Josette Sheeran detailing the inexorable increase in famine resulting from cuts to food aid by the world's wealthiest nations and the relationship of this crisis to the current international financial crisis.
Sharon Lindores writes for Reuters, "The number of hungry people passed 1 billion this year for the first time, [Sheeran] said, adding the WFP has barely a third of the funding it needs to feed 108 million people this year. To date the WFP has confirmed $2.6 billion in funding towards its $6.7 billion budget for 2009. It would take less than 0.01 percent of the global financial crisis bailout package to solve the hunger crisis, [Sheeran] said.
Following Sheeran's comments by a month, major news channels trumpeted the Wall Street achievement while the story was reported only by the fringes of the business press.
http://www.associatedcontent.com/article/2285493/dow_jones_average_climbs_above_10000.html
Still many on and off Wall Street consider genuine indicators of recovery--for instance reduction of monthly job losses, the re-issuing of loans to small business and decrease in monthly home foreclosures--to follow strength in consumer confidence.
http://www.marketwatch.com/story/confidence-drops-for-second-straight-month-2009-10-27
Wall Street Journal's MarketWatch reporter Greg Robb writes on Oct. 27, "U.S. consumers doubt that the much-touted economic recovery is under way, according to the latest report on consumer confidence released by the Conference Board on Tuesday. The consumer confidence index was much weaker than expected, falling for the second straight month as the assessment of present-day conditions fell to its lowest level in 26 years."
Analysis: Monitoring economic indicators that tell you only about the daily lives of a specific range of citizens can only provide false readings on recovery or any kinds of stability trends. Current economics, under the constant influence of Wall Street culture, do not look at the lives of the poor in the US and elsewhere to tell them about the health of financial institutions, which is most often the health analysts and investors are concerned about. People all around the world with no access to regulation of banks (or lack thereof entirely) are not facing the repair of central financial institutions like it is something we all caused and haven't the expertise to fix, but monitoring the usual media outlets we don't get that impression. Instead, powerful individuals who knew precisely what would happen and what to ask for when it did happen are looking at the rest of the world's literate population trying to interpret the current financial crisis as a routine system crash that seemingly caused itself and only our patience and adherence to the notion we're dealing with forces we can't understand without a masters degree in economics. There are perpetrators here with names and families and lives who, unlike Bernard Madoff, are getting away. They have been getting away since December of 2007 while the rest of us tried to make sense of what happened to the financial sector. They are not absconding to a secret island in the South Pacific or a mountain redoubt in the far reaches of the Swiss Alps. They are retreating into the rhetoric created by so many people who have worked so hard to obfuscate justice in economic crime, to make the situation appear so complicated that not only is it impossible to bring the culprits to a fair hearing and ultimately to justice, but also to construe this as the impossibility of even defining what justice is, therefore rendering it unattainable. What this allows is not only the exoneration of those who knew what the consequences of their enormously reckless acts would be. This prevarication also creates the possibility to commit these crimes again on the same order of magnitude, arguably by the same names and faces now running to safety behind a flimsy wall of "financial might makes financial right."
For a more critical look at the financial crisis, don't miss Jeff Madrick's piece on financial regulation in the Nov. 5 issue of the New York Review of Books: http://www.nybooks.com/articles/article-preview?article_id=23323 (online content is premium with three pay options available; newsstand copy runs about $6 and can be found at many bookstores)
Also, the action group Showdown in Chicago rallied just this weekend to raise awareness about banking and decisions being made right now by financial institutions. Under the "What's Broken" tab on their site are both html and pdf versions of a sensible prognosis in the woe that is our current financial predicament. http://www.showdowninchicago.org/whatsbroken.html
A Sept. 16 Reuters story, http://uk.reuters.com/article/idUKLG270557 quotes UN World Food Program (UNWFP) executive director Josette Sheeran detailing the inexorable increase in famine resulting from cuts to food aid by the world's wealthiest nations and the relationship of this crisis to the current international financial crisis.
Sharon Lindores writes for Reuters, "The number of hungry people passed 1 billion this year for the first time, [Sheeran] said, adding the WFP has barely a third of the funding it needs to feed 108 million people this year. To date the WFP has confirmed $2.6 billion in funding towards its $6.7 billion budget for 2009. It would take less than 0.01 percent of the global financial crisis bailout package to solve the hunger crisis, [Sheeran] said.
Following Sheeran's comments by a month, major news channels trumpeted the Wall Street achievement while the story was reported only by the fringes of the business press.
http://www.associatedcontent.com/article/2285493/dow_jones_average_climbs_above_10000.html
Still many on and off Wall Street consider genuine indicators of recovery--for instance reduction of monthly job losses, the re-issuing of loans to small business and decrease in monthly home foreclosures--to follow strength in consumer confidence.
http://www.marketwatch.com/story/confidence-drops-for-second-straight-month-2009-10-27
Wall Street Journal's MarketWatch reporter Greg Robb writes on Oct. 27, "U.S. consumers doubt that the much-touted economic recovery is under way, according to the latest report on consumer confidence released by the Conference Board on Tuesday. The consumer confidence index was much weaker than expected, falling for the second straight month as the assessment of present-day conditions fell to its lowest level in 26 years."
Analysis: Monitoring economic indicators that tell you only about the daily lives of a specific range of citizens can only provide false readings on recovery or any kinds of stability trends. Current economics, under the constant influence of Wall Street culture, do not look at the lives of the poor in the US and elsewhere to tell them about the health of financial institutions, which is most often the health analysts and investors are concerned about. People all around the world with no access to regulation of banks (or lack thereof entirely) are not facing the repair of central financial institutions like it is something we all caused and haven't the expertise to fix, but monitoring the usual media outlets we don't get that impression. Instead, powerful individuals who knew precisely what would happen and what to ask for when it did happen are looking at the rest of the world's literate population trying to interpret the current financial crisis as a routine system crash that seemingly caused itself and only our patience and adherence to the notion we're dealing with forces we can't understand without a masters degree in economics. There are perpetrators here with names and families and lives who, unlike Bernard Madoff, are getting away. They have been getting away since December of 2007 while the rest of us tried to make sense of what happened to the financial sector. They are not absconding to a secret island in the South Pacific or a mountain redoubt in the far reaches of the Swiss Alps. They are retreating into the rhetoric created by so many people who have worked so hard to obfuscate justice in economic crime, to make the situation appear so complicated that not only is it impossible to bring the culprits to a fair hearing and ultimately to justice, but also to construe this as the impossibility of even defining what justice is, therefore rendering it unattainable. What this allows is not only the exoneration of those who knew what the consequences of their enormously reckless acts would be. This prevarication also creates the possibility to commit these crimes again on the same order of magnitude, arguably by the same names and faces now running to safety behind a flimsy wall of "financial might makes financial right."
For a more critical look at the financial crisis, don't miss Jeff Madrick's piece on financial regulation in the Nov. 5 issue of the New York Review of Books: http://www.nybooks.com/articles/article-preview?article_id=23323 (online content is premium with three pay options available; newsstand copy runs about $6 and can be found at many bookstores)
Also, the action group Showdown in Chicago rallied just this weekend to raise awareness about banking and decisions being made right now by financial institutions. Under the "What's Broken" tab on their site are both html and pdf versions of a sensible prognosis in the woe that is our current financial predicament. http://www.showdowninchicago.org/whatsbroken.html
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