What’s My Payment?

I didn't go to boarding schools
Preppy girls never looked at me

Why should they, I ain't nobody
Got nothing in my pocket. - Living in Beverly Hills [Weezer]

For the last three decades you didn’t need anything in your pocket to attract a preppy girl. You just needed to whip out one of your 10 credit cards and act like a Beverly Hills hotshot. Cash was for suckers. Credit cards are so easy to use. You just pull it out, buy whatever you desire at that moment and make a minimum payment every month until infinity. We’ve become a minimum payment nation. If you can handle the minimum payment, it’s yours. In 2006, the Census Bureau determined that there were nearly 1.5 billion credit cards in use in the U.S. A stack of all those credit cards would reach more than 70 miles into space -- and be almost as tall as 13 Mount Everests. Consumer credit debt has risen from $400 billion in 1980 to $2.5 trillion today. Consumers have an average of 5.4 credit cards with $973 billion outstanding. The average outstanding credit card debt for households that have a credit card was $10,679 at the end of 2008. The average American with a credit file is responsible for $16,635 in debt, excluding mortgages, according to Experian. The most fascinating fact is that the top 10 U.S. credit card issuers held an 87.55% market share of $973 billion in general purpose card outstanding in 2008. Of those, 9 are coincidently the same banks that brought down the financial system - Bank of America (BAC), Citicorp (C), JP Morgan Chase (JPM), Wells Fargo (WFC), Capital One (COF), HSBC (HBC), American Express (AXP), Discover (DFS), US Bank (USB).

Total Credit Market Debt

Source: Barry Ritholtz

It has taken Americans three decades of overspending and under-saving to get into this pickle. As you may notice, consumer credit debt is $2.5 trillion and has barely budged downward. The pundits and economists predicting a strong economic recovery are blind to the truths of consumer debt. With actual unemployment exceeding 16.8%, 9 million people forced to work part-time wanting to work full-time, the work week at all time lows, and banks shutting down credit lines, consumers will be reducing or defaulting on their debt for years. With 70% of the economy dependent on consumer spending, there is absolutely no chance of a strong recovery. Household debt service payments as a percentage of disposable income reached a peak of 14.2% in 2007 and have plunged all the way to 13.5% today. Disposable income is plunging as people without jobs don’t have anything to dispose of.

A paradigm shift is occurring and the mainstream media, mainstream economists, and clueless politicians running this country do not understand the implications. Three decades of debt accumulation is not resolved in two years. It will take decades of reduced spending, paying down debt, and writing off debt. The Federal Reserve, banking cartel, and politicians are franticly attempting to make consumers borrow and spend with TARP, TALF, Cash for Clunkers, and numerous other debt increasing gimmicks. The consumer is tapped out. The median 401k balance in the U.S. is $26,000. Boomers realize they are 60 years old and have $50,000 of retirement savings and $30,000 of credit card debt. They are learning the brutal lesson of needs versus wants. The implications are disastrous for those dependent on a consumer spending society (i.e. retailers, restaurants, hotels, car makers, homebuilders).

There are 25% of households in the U.S. with no credit cards. Of those with a credit card, 30% pay off their balances each month. These are the people that have chosen to live within their means. They understand the difference between needs and wants. They appreciate the notion of delayed gratification. You buy things when you can afford them. You live a life of thrift and frugality, save for your family’s future, and live within the parameters of a budget. What a concept. The TARP accepting banks that control 87% of the credit card market are recording losses on an unprecedented scale. But no need to worry, the middle class tax payers come to the rescue again. Orwell must be rolling in his grave at the government originated Troubled Asset Relief Program. “Troubled” is an Orwellian word to describe debt that was knowingly issued by banks to people who would never pay it back in order to generate outrageous fees and bonuses for the executives issuing the debt. When the debt predictably went bad, “Relief” was provided to the criminal bankers on the backs of the taxpaying middle class. Bank of America, Wells Fargo and JP Morgan are bigger than they were before the financial crisis, their executives are still making millions, their “assets” are still “troubled”, and we continue to pay the bill, as will our children and grandchildren. Don’t worry. Ken Lewis, Vikram Pandit and Jamie Dimon’s grandchildren will inherit hundreds of millions of your tax dollars from their banker grandpas.

I Wanna Be Just Like A King

Beverly Hills... That's where I want to be! (gimme, gimme)
Living in Beverly Hills...

Beverly Hills... Rolling like a celebrity! (gimme, gimme)
Living in Beverly Hills...

Look at all those movie stars
They're all so beautiful and clean

When the housemaids scrub the floors
They get the spaces in between
I wanna live a life like that
I wanna be just like a king

Take my picture by the pool
Cause I'm the next big thing - Living in Beverly Hills

The 8,000 square foot castle-like McMansions are the symbol of extravagance and excess that represent the worst of America’s hyper-consumerism culture. Even though the family unit has gotten smaller since 1970, the average home size has grown from 1,400 sq ft to 2,500 sq ft. McMansions are clearly not necessary due to family size. Essentially, it is another example of Boomers attempting to show the world they are successful. The bigger and gaudier the house the more flourishing you appear. This psychological need for approval combined with the big lie pushed by the National Association of Realtors that a house is always a great investment to generate the biggest housing bubble in history. One glance at Robert Shiller’s chart showing home prices since 1890, proves beyond a shadow of a doubt that we have experienced a manic increase in house prices. It is also unambiguous that the downward spiral is not nearly complete. The housing cheerleaders continue to forecast a housing recovery that is still 5 years in the future.

It is mind boggling that home prices could have surged that high while owner’s equity has plunged from 70% in 1980 to 45%. People didn’t earn the McMansions, they borrowed them. The Federal Reserve created spiral in prices upward has trapped millions of late comers in houses that are worth 20% to 30% less than the mortgage debt that is strangling them. Over 16 million home occupiers (not homeowners) are underwater in their mortgage. The decisions to buy houses with nothing down, using option ARM loans, were free choices made by people who should have known better. The decisions to make subprime loans to people making $30,000, to make no-doc loans, and to not verify income or assets were purposefully done to enrich the bankers, mortgage brokers, and real estate agents. The $10.5 trillion of mortgage debt will need to be paid down or written off over many years, before the housing market will reach equilibrium again.

Source: Mike Shedlock; T2 Partners

The dream of living like a king in Beverly Hills has come to a shattering conclusion. As mortgage delinquencies soar to all-time high levels, the kings are being led kicking and screaming to the foreclosure guillotine. Neighborhoods of McMansions in California, Phoenix, Florida, and Las Vegas are weed infested crime ridden high end ghettos. The American dream of home ownership spouted by George Bush and legislated through Fannie Mae and Freddie Mac has turned into a debt induced nightmare.

Mortgage Delinquencies

Source: Mike Shedlock; T2 Partners

The Alt-A reset crisis which will begin in 2010 and not crest until 2013 is coming down the tracks at a swift pace. The credit criteria used by the banks that doled out Alt-A loans were as lax as the subprime loans that precipitated this crisis. These loans already have delinquency rates of 33%, even before these resets kick in. There is no evading this calamity. There is also no doubt how the Federal Reserve, Treasury, and government politicians will handle this next emergency. If you have lived in a modest home, made your mortgage payments, didn’t use your home equity to buy a Mercedes ML350, and pay your taxes, the government will seize your taxes again and dispense them to the profligate borrowers and criminal bankers. You will pay your mortgage and the mortgages on millions of other houses.

Alt-A Loan Resets

Source: Mike Shedlock; T2 Partners

Give Me Something I Need

No I don't - I'm just a no class, beat down fool
And I will always be that way

I might as well enjoy my life
And watch the stars play

Beverly Hills... That's where I want to be! (gimme, gimme)(gimme,gimme)
Living in Beverly Hills...
Beverly Hills... Rolling like a celebrity! (gimme, gimme) (gimme,gimme)
Living in Beverly Hills... - Living in Beverly Hills

The era of excess, gluttony, and overindulgence is coming to a wretched ending. The unraveling is complete. We have entered an epoch of crisis that will last for two decades. The coming winter will be cold, bitter and harsh on most Americans. Millions are learning that living in Beverly Hills was just a delusionary dream. They are just no class, beat down fools and I will always be that way. It is time to enjoy the more basic aspects of life: family, friends, enjoying what you’ve got, and leaving the world a better place for our children and grandchildren. It comes down to choices. It is time for Americans to grow up and take responsibility for their actions and their futures. They must realize that the Federal Reserve and the banking cartel are the only ones profiting from ever expanding debt. The Rising Debt Era has not benefited the borrowers as they borrowed toys they couldn’t afford. The beneficiaries were Bank of America, Citicorp, Wells Fargo, JP Morgan and the other members of the cartel. The 10 biggest banks in the country control 48% of all deposits, 50% of the mortgage market, and 87% of the credit card market, supported and protected by the Federal Reserve and Treasury Department. The “too big to fail” continue to get bigger, as the FDIC will shutter 500 smaller banks in the next year.

Source: Mike Shedlock; T2 Partners

The banking cartel has no intentions of relinquishing power. It will be left to average Americans to make the right choices. Government will continue to push Keynesian Cash for Clunkers publicity stunts to keep their debt civilization going. The consumer society needs to be put to rest. Americans must ask themselves a few questions. Do you really need a $35 Aeropostale tee shirt when you can get an identical tee shirt at Kohl’s (KSS) for $6? They were both made in the same Chinese sweatshop by 13 year old children. The difference is that Aeropostale (ARO) will say it is a “green” shirt because there was no air conditioning used in the sweatshop ruining the ozone layer. What exactly does a pair of $345 Botticelli shoes do that a pair of $35 shoes from Payless Shoe Source (PSS) won’t do? Does a $10,000 Rolex watch tell time better than a $50 Timex? Will an $85,000 BMW 750LI get you to the supermarket better than a $15,000 Honda Civic?

When I started researching this article, I came across a Heritage Foundation report called How Poor Are America's Poor? Examining the "Plague" of Poverty in America. The article makes it clear that the poor in America do not fit the portrayal of living in poverty when compared to real poverty in Africa and much of the developing world. The report concludes:

The typical American defined as "poor" by the government has a car, air conditioning, a refrigera­tor, a stove, a clothes washer and dryer, and a micro­wave. He has two color televisions, cable or satellite TV reception, a VCR or DVD player, and a stereo. He is able to obtain medical care. His home is in good repair and is not overcrowded. By his own report, his family is not hungry and he had suffi­cient funds in the past year to meet his family's essential needs. While this individual's life is not opulent, it is equally far from the popular images of dire poverty conveyed by the press, liberal activists, and politicians.

The main causes of child poverty in the United States are low levels of parental work, high numbers of single-parent families, and low skill levels of incoming immigrants. By increasing work and mar­riage, reducing illegal immigration, and by improv­ing the skill level of future legal immigrants, our nation can, over time, virtually eliminate remaining child poverty.

The Heritage Foundation report missed one key aspect of being poor in America. The politicians and banks have taken advantage of the poor’s lack of education and ignorance regarding the perils of debt and have enslaved them in a monthly payment plantation. The poor don’t own the cars, electronics, homes and appliances. They are renting them until they can no longer make the payments. The politicians have colluded with the Federal Reserve and banks to provide bad money to the poor in order to keep them satiated and pliable. When the debt predictably goes bad, the banks are compensated by their bought government cronies with middle class’ tax dollars.

"When I was a child I spoke as a child I understood as a child I thought as a child; but when I became a man I put away childish things." I Cor. xiii. 11.

Americans, led by the Baby Boom Generation, have been living like spoiled children for thirty years. They have thought like children, with instant self-gratification as their sole aspiration. It is time to put away childish things. Hard times have arrived. There is no easy way out. We have kicked the can down the road for a generation. Tomorrow has arrived. Our long-term structural problems have now collided with our current debt induced tragedy. Current policies that further the expansion of debt will ultimately lead to the collapse of our economic system. The timing is all that is in doubt.

Give me something that I need
Satisfaction guaranteed to you
What's the consolation prize?
Economy sized dreams of hope

When I was a kid I thought
I wanted all the things that I haven't got
Oh. I learned the hardest way
Then I realized what it took
To tell the difference between
Thieves and crooks
A lesson learned to me and you

Give me something that I need
Satisfaction guaranteed
Because I'm thinking about
A brand new hope
The one I've never known
Cause now I know
It's all that I wanted - Macy’s Day Parade [Green Day]

Materialism has not provided what we needed. As our current crisis deepens, luxury cars and Rolex watches will seem so phony. Childish symbols like yellow rubber wristbands and yellow, pink, and rainbow ribbon stickers on our SUVs do nothing to change the world. When you are walking down the street, look people in the eye and say hello rather than staring at your feet or checking your latest email or text message on your “crackberry”. Deeper personal relationships with family and friends will become crucial. The thieves and crooks occupy Washington DC and Wall Street. We do not need what they are selling. Economy sized dreams of hope will sustain the citizens of this great country. Instead of accumulating stuff, give your stuff to people who need it. Donate your stuff to Purple Heart, the Salvation Army, or any other worthy charity. Donate your time to Manna, Habitat for Humanity, or any other worthy cause. Don’t delegate your role in caring for your fellow citizens to the government. Americans will soon realize that what they wanted was not what they needed.

Comments

[Graham and ...:]

Credit cards made us feel wealthier than we actually are, and led to a misallocation of resources by making us buy things we don't really need, and can't really afford.

Sep 10 04:01 PM

[User 283977:]

LOL - Your comment reminded me of a great quote from the movie Mr. Blandings Builds His Dream House…

Ms. Stellwagon says advertising makes people who can't afford it... ...buy things they don't want with money they haven't got.

Sep 10 04:08 PM

[District Ba...:]

The name of the song is just "Beverly Hills." Get your Rivers Cuomo straight

Sep 10 04:24 PM

[TinyTim:]

"Boomers realize they are 60 years old and have $50,000 of retirement savings and $30,000 of credit card debt. "

And there's a line of applicants to be greeters at the local Walmart.

Hopefully, you are describing a new generation similar to the thrifty that came out of the Depression. Only they don't know it yet, just like the high-rollers during the Roaring 20's. This mentality rarely carries to the next generation

Sep 10 04:49 PM

[Leftfield:]

Besides the necessary downsizing of the unaffordable consumer economy, I hopefully await the downsizing of unaffordable, bloated government.

Sep 10 04:57 PM

[User 353732:]

Excessive debt(i.e debt beyond the ability to repay) to finance instant gratification (of material whims and fancies, not just necessities) is not merely a financial perversion, it is a social pathology that afflicts a majority of citizens.

It is a financial perversion by the wanton borrower who will not or cannot repay, because it is theft, whether by unwitting outcome or premeditated design. It is a financial perversion by the lender who lends despite a manifest lack of credit worthiness of the borrower. The lender who lends recklessly to satisfy the lust for instant fees and bonuses is a co-conspirator in the borrower's crime. The lender who then syndicates the bad loan is also a thief, who steals from other, distant, investors.
It is a social pathology because it is born of the malignant double helix of entitlements and envy. Entitlements that say we can consume more than we produce, we can earn more than the value we create for others, we can take far more than we are willing to give.....and we can do it without ill consequences for ourselves and without caring what harm it may visit on others.
Envy that covets what our neighbor has even though we do not have the merit(or luck or access to patronage) that our neighbor has; envy seeks equality of outcomes and has little interest in equality of opportunity or equality of contribution or equality of plain good fortune.

Excessive debt is not a financial abstraction:it is a concrete social malignancy.

Inevitably private entitlements and envy become public programs and policies and via the consent of the bribed, the deluded, the greedy and the uncaring, private pathologies become public pathologies. Once public, these pathologies, metastasize, multiply and spread. We turn from specific individuals degraded by envy and entitlements to a Polity thoroughly infected by National envy and National entitlements. Inexorably, the Polity turns to ever monstrous deficits at every level of government and in our economic relationships with the world. Deficits at home and internationally can only be satisfied with debt and when ethical debt is no longer adequate, the Polity turns to unethical debt via fiat money.
This is the multi-decade trajectory that began in the 1960s and is now in its hyperkinetic phase.
Unless, altered the public trajectory will first lead to the moral bankruptcy of the Nation(the very top of American society is already at the stage; the Middle class is not yet there, as a whole; while the Lower class is now so completely conditioned by its carefully nurtured entitlements and envies that it cannot distinguish between getting and deserving..economic amorality rules). In turn, this will lead to sordid, de-facto ( not de-jure because the Bosses will inflate or otherwise repudiate their way of the debt) financial bankruptcy.
The Middle Class can reform the system(or interlocking set of systems) now by first reconsidering its own priorities and values and then acting------or it can wait to build anew, after the disaster , pain and humiliation of the National fall. The reform could be mostly done in a decade; the rebuilding could take at least a generation, maybe two, assuming a hostile and contemptuous world gives us the time to do so.
Excessive, persistent, materialism will not just make us fat or sick or poor: it can consume the very substance of our Nation.

Sep 10 05:56 PM

[Russ Wetherill:]

I think roots of the debt bubble are grounded in the erroneous conception that conspicuous consumption is a reflection of one's own personal wealth. To me, wealth is not measured only by present circumstances, but also by future prospects.

I remember reading somewhere that wealth has little to do with income but everything to do with expenses. A person earning $10k a year but living on $5k, ignoring any tax liability, will soon have enough savings to support his lifestyle. Another person earning $100k and spending $105k, won't be able to support their lifestyle for very long. Which one is wealthy?

The low-wage-earner is spending half now and saving half for later; while the high-wage-earner is spending everything now and borrowing from the future. The low-wage-earner's current circumstances are assuredly quite modest, but his future prospects are likely to improve. The high-wage-earner has a comfortable present but a very bleak future. A future so bleak, in fact, that it might even cause his present to be a bit less comfortable.

Many high-wage-earners have also been high-rollers: spending today's income without a thought of tomorrow. They have been behaving like the grasshopper in the fable about the ant and the grasshopper - living for the summer with no thought of winter.

Well, winter is here, and, if there is any justice in the world, the ants should not have their savings stolen by the government to keep the grasshoppers warm during the coming months and years ahead.

Sep 10 05:56 PM

[The Geoffster:]

"Those who made the laws have apparently supposed, that every deficiency of payment is the crime of the debtor. But the truth is, that the creditor always shares the act, and often more than shares the guilt, of improper trust. It seldom happens that any man imprisons another but for debts which he suffered to be contracted in hope of advantage to himself, and for bargains in which proportioned his own profit to his own opinion of the hazard; and there is no reason, why one should punish the other for a contract in which both concurred."
Samuel Johnson: Idler #22 (September 16, 1758)

Sep 10 07:08 PM

[James Quinn:]

Wow. You've put some major thought into this issue. I think you would really like the discussion on my site.

theburningplatform.com...


On Sep 10 05:56 PM User 353732 wrote:

> Excessive debt(i.e debt beyond the ability to repay) to finance instant
> gratification (of material whims and fancies, not just necessities)
> is not merely a financial perversion, it is a social pathology that
> afflicts a majority of citizens.
>
> It is a financial perversion by the wanton borrower who will not
> or cannot repay, because it is theft, whether by unwitting outcome
> or premeditated design. It is a financial perversion by the lender
> who lends despite a manifest lack of credit worthiness of the borrower.
> The lender who lends recklessly to satisfy the lust for instant fees
> and bonuses is a co-conspirator in the borrower's crime. The lender
> who then syndicates the bad loan is also a thief, who steals from
> other, distant, investors.
> It is a social pathology because it is born of the malignant double
> helix of entitlements and envy. Entitlements that say we can consume
> more than we produce, we can earn more than the value we create for
> others, we can take far more than we are willing to give.....and
> we can do it without ill consequences for ourselves and without caring
> what harm it may visit on others.
> Envy that covets what our neighbor has even though we do not have
> the merit(or luck or access to patronage) that our neighbor has;
> envy seeks equality of outcomes and has little interest in equality
> of opportunity or equality of contribution or equality of plain good
> fortune.
>
> Excessive debt is not a financial abstraction:it is a concrete social
> malignancy.
>
> Inevitably private entitlements and envy become public programs and
> policies and via the consent of the bribed, the deluded, the greedy
> and the uncaring, private pathologies become public pathologies.
> Once public, these pathologies, metastasize, multiply and spread.
> We turn from specific individuals degraded by envy and entitlements
> to a Polity thoroughly infected by National envy and National entitlements.
> Inexorably, the Polity turns to ever monstrous deficits at every
> level of government and in our economic relationships with the world.
> Deficits at home and internationally can only be satisfied with debt
> and when ethical debt is no longer adequate, the Polity turns to
> unethical debt via fiat money.
> This is the multi-decade trajectory that began in the 1960s and is
> now in its hyperkinetic phase.
> Unless, altered the public trajectory will first lead to the moral
> bankruptcy of the Nation(the very top of American society is already
> at the stage; the Middle class is not yet there, as a whole; while
> the Lower class is now so completely conditioned by its carefully
> nurtured entitlements and envies that it cannot distinguish between
> getting and deserving..economic amorality rules). In turn, this will
> lead to sordid, de-facto ( not de-jure because the Bosses will inflate
> or otherwise repudiate their way of the debt) financial bankruptcy.
>
> The Middle Class can reform the system(or interlocking set of systems)
> now by first reconsidering its own priorities and values and then
> acting------or it can wait to build anew, after the disaster , pain
> and humiliation of the National fall. The reform could be mostly
> done in a decade; the rebuilding could take at least a generation,
> maybe two, assuming a hostile and contemptuous world gives us the
> time to do so.
> Excessive, persistent, materialism will not just make us fat or sick
> or poor: it can consume the very substance of our Nation.

Sep 10 08:44 PM

[sethmcs:]

So there is 25% like me that has no debt a extremely high savings rate and bright prospects for the future? Damn I thought I was the only one. Oh well I am really enjoying this recession. Hope it changes a lot of attitudes toward the value of dollar and the slavery of debt.

Sep 11 12:33 AM

[derryl:]

RE: "What's my payment?"

I don't buy cars often, just drive em 'til they drop. But a few years ago I noticed that, of all the car ads in the newspaper I was reading I could not find ANY that listed the price, just the payments. Around that time someone explained to me that people cannot afford to buy used cars because you need some money to do that. New cars are bought with debt. I hadn't been aware how pervasive this debt culture has become until that eye opener.

Sep 11 01:20 AM

[Vienna:]

Mr. Quinn,

in regard to your great articles, I would like to recall on your discussion on medical insurance, and how good the US is, and everybody treated in Europe would be dead, but in the US they would be treated to a much higher relyability.

Please refer to this article from the Washington Post, and please don't do it down as some cracy article.

www.washingtonpost.com...

seekingalpha.com/artic...

Sep 11 08:28 AM

[ArtfulDodger:]

James:

Rolexes are way too nouveau riche for me. I mainly wear a Patek, but I won it playing gin back in the 1970s. Is that all right?

I do have Tiffany Platinum Diamond Mother of Pearl and Corum Ten Dollar Gold Piece watches that I wear sometimes. I also bought them back in the 1970s.

Do I have to give them away now? Don't make me, please! I still like them. They're pretty.

Sep 11 08:36 AM

[James Quinn:]

You can keep them, as long as you didn't borrow to buy them.

You aren't allowed on this site. TBP rules!!!!


On Sep 11 08:36 AM ArtfulDodger wrote:

> James:
>
> Rolexes are way too nouveau riche for me. I mainly wear a Patek,
> but I won it playing gin back in the 1970s. Is that all right?<br/>
>
> I do have Tiffany Platinum Diamond Mother of Pearl and Corum Ten
> Dollar Gold Piece watches that I wear sometimes. I also bought them
> back in the 1970s.
>
> Do I have to give them away now? Don't make me, please! I still like
> them. They're pretty.

Sep 11 10:18 AM

[Roger Nusbaum:]

One thing that I don't think you get to (but maybe I'm wrong) is that for the various problems people have (over-levered, lack of savings and so forth) at some point everyone knows not to spend more than they make, someone (maybe a grandparent) told them to save X% yet folks eventually find their way into doing the opposite of what they know is right.

My parents made a lot of personal finance mistakes which I have benefited from enormously. Learning from the mistakes of others is a huge concept IMO.

Sep 11 11:47 AM

[Albert Meyer:]

Good article, thanks.

"The $10.5 trillion of mortgage debt will need to be paid down or written off over many years, before the housing market will reach equilibrium again"

Isn't this a little bit extreme? The collateral value of the $10.5 trillion of mortgage debt is $19 trillion, not so?

Total US household net worth is $53 trillion, not so?

Just trying to add another perspective, although there is nothing about your article that should make us proud, but then our government leads the way, not so? A healthcare program will add another $1 trillion to national debt over the next ten years - low-balling the estimate of course. Do they undertsand what the word "immoral" means.

The war was supposed to cost $80 billion... $908 billion and counting. This makes household debt fade into insignificance.

costofwar.com/

Sep 11 01:07 PM

[James Quinn:]

Read the whole article here. SA only chose to publish part.

theburningplatform.com...

The $19 trillion of equity and $53 trillion of net worth is concentrated in the top 10%. The bottom 90% have the problem.


On Sep 11 01:07 PM Albert Meyer wrote:

> Good article, thanks.
>
> "The $10.5 trillion of mortgage debt will need to be paid down or
> written off over many years, before the housing market will reach
> equilibrium again"
>
> Isn't this a little bit extreme? The collateral value of the $10.5
> trillion of mortgage debt is $19 trillion, not so?
>
> Total US household net worth is $53 trillion, not so?
>
> Just trying to add another perspective, although there is nothing
> about your article that should make us proud, but then our government
> leads the way, not so? A healthcare program will add another $1 trillion
> to national debt over the next ten years - low-balling the estimate
> of course. Do they undertsand what the word "immoral" means.
>
> The war was supposed to cost $80 billion... $908 billion and counting.
> This makes household debt fade into insignificance.
>
> costofwar.com/

Sep 11 01:27 PM

[dragonpaw:]

James , thanks for your eloquent synopsis; on target as usual.
User 353732 so aptly and completely stated that I can add nothing to your assessment. Keep up the great work!
James look out! They're nipping at your boot heels!

Sep 11 01:58 PM

[ArtfulDodger:]

Now James, you know how I'm against debt in most cases, and most especially in buying luxury items.

Certainly, I've found it insane (or perhaps suicidal) that the US government is promoting its citizens to take on more debt when too much debt is what got the nation into mess we're in now.

And guess who promoted---and yes even ordered---the creation of the debt that got us to this point: our old favorite, that Warring Warthog in Washington.

Hey James, I think I'll write Jimmy Carter and see if there's anyone at Habitat who would like a nice Patek. My wife has a favorite Baume Mercier I bought her in 1980. I think I'll grab it and throw it in there too.

Or perhaps Greenpeace needs a little money; they've been working hard out here flying balloons and advertizing, claiming that global warming is causing the wild fires to get worse.

But it's been a super cool summer here, and the Pacific has been cooler. And James quite opposite to the Atlantic the cooler weather makes this area drier.

I suppose they don't know that, because no way they would put out false information to try to accomplish one of their goals. Eh?

Have a good weekend. Give the kids a hug for me, will ya?

Sep 11 04:28 PM

[James Quinn:]

You have a great weekend too. It is pouring rain here. I'll spend my night in a hockey rink working on the next article.


On Sep 11 04:28 PM ArtfulDodger wrote:

> Now James, you know how I'm against debt in most cases, and most
> especially in buying luxury items.
>
> Certainly, I've found it insane (or perhaps suicidal) that the US
> government is promoting its citizens to take on more debt when too
> much debt is what got the nation into mess we're in now.
>
> And guess who promoted---and yes even ordered---the creation of the
> debt that got us to this point: our old favorite, that Warring Warthog
> in Washington.
>
> Hey James, I think I'll write Jimmy Carter and see if there's anyone
> at Habitat who would like a nice Patek. My wife has a favorite Baume
> Mercier I bought her in 1980. I think I'll grab it and throw it in
> there too.
>
> Or perhaps Greenpeace needs a little money; they've been working
> hard out here flying balloons and advertizing, claiming that global
> warming is causing the wild fires to get worse.
>
> But it's been a super cool summer here, and the Pacific has been
> cooler. And James quite opposite to the Atlantic the cooler weather
> makes this area drier.
>
> I suppose they don't know that, because no way they would put out
> false information to try to accomplish one of their goals. Eh?<br/>
>
> Have a good weekend. Give the kids a hug for me, will ya?

Sep 11 05:00 PM

[MWH:]

Hello James, I have enjoyed your writing for some time and believe you understand our situation better than most. I see America racing toward what was depicted in the 70's film "Soylent Green". The politicians, fat cats and money men control anything of value while living in luxury as the populace is left to grovel for morsels in squalor.
I thought it was fiction at the time, little did I know in reality it was prophetic. The sad thing is America's "sheep" are cheerfully marching to the slaughter with their beer in one hand and remote in the other. Keep the wisdom coming! Regards, MWH

Sep 16 10:57 PM

[investorinPA:]

James, your very last paragraph hit home with me. I have linked it onto my blog as well at contraryriches.blogspo.... You deserve any positive feedback you get on it.

Oct 11 01:35 AM