mallarde

Recipients of FHA Loans Starting to Default: Say Hello to the Next Crisis

Try traveling on the 134 Freeway in the San Fernando Valley. You will see some.


On Sep 08 08:24 AM Jimmy K wrote:

> where exactly do you watch "drivers on coke"? I agree with the rest
> of your article; but I just don't get that statement...

Economic Collapse Is Accelerating

I believe we cannot have any "recovery" unless Americans can get jobs that pay them enough to live well on. Right now that is not the case.

I drove across L.A. today to pick up a piece of furniture. There are miles and miles of neighborhoods lifted out of Mexico and placed in California. Our government has permitted the world's poor to compete head-to-head with our native workers -- even on our own soil. This will be disastrous until people can set aside their politically correct thought or outmoded economics and offer some protection to the U.S. labor market.

Scary Numbers

I find the phrase "before things get back on track" sort of stomach turning. It implies that things will return to normal eventually -- 15% returns each year and the price of housing going up and never down. Sounds like an assurance from a finance professional that the old mentality of "this time it's different" still has some validity. Bleh.

Trillions and Trillions: The National Debt and Where It Is Going

I am pessimistic about the amount of poverty we have absorbed from Latin America and beyond. How much does it cost to provide education and health care to these willing "workers"?

You have to travel to certain parts of the country to see the amount of poor from the South, but it will burden the federal government and it will spread to unaffected states.

California will become a third-world republic. The rest of the country will follow the same trend, only not nearly as pronounced.

This in combination with our failure to protect American wage-earners will drive us further in the wrong direction. I see no room for optimism.

An Economic Nightmare Before Christmas

I agree that distribution of wealth is a problem that Americans reflexively refuse to discuss -- as though it makes you a Marxist.

You cannot have a healthy society or economy if a huge proportion of the population cannot earn enough in wages to live comfortably.

Instead of trying to stuff the American "consumer" with more debt, the government should concern itself with cutting the illegal population out of the labor market. That alone would help lift wages and allow the American working class and young people to start spending cash again.


On Dec 14 01:13 PM carey_jim wrote:

> Instead of facing financial collapse, America might have to consider
> two "ugly" possibilities:
>
> 1) Reducing military spending
>
> 2) Redistributing a very large part of the wealth of the upper 1
> percent of the American population who own 33% of the wealth (stocks,
> bonds, real estate, etc.) to the bottom 80% who own only about 10%
> of the wealth. sociology.ucsc.edu/who...
>
>
> If these two unpleasant things don't happen rationally, history might
> exact its pound of flesh as it has, periodically, in the past, through
> war or revolution or just social upheaval.
>
> In terms of wealth and income distribution, contemporary America
> is at about the same place as it was during the time of the "robber
> barons" at the turn of the last century, just before World War I
> when the FTC and the Federal Reserve were created.
>
> It was also the time when the Supreme Court first ruled that a Federal
> income tax was not "unconsitutional&a... (and "socialistic&q...
> as it said of the1894 Federal income tax which it DID rule unconstitutional)
> and the first time the Sherman Antitrust Act was invoked to break
> up large corporations (Standard Oil and The American Tobacco Company.)
>
>
> But then again, as Henry Ford said, "History is more or less bunk.
> It’s tradition. We don’t want tradition. We want to live in the present
> and the only history that is worth a tinker’s damn is the history
> we make today"
>
> Maybe it's time to make history instead of being unmade by it.<br/>
>
>
>
>

The Shallowest Generation

Another way the Boomer generation subsidizes itself is with immigration. We import millions of unskilled "workers" so that Boomers can save on labor costs -- in the home and in industry.

But it is young people that will need to shoulder the cost of building schools, policing and providing health care for these "workers," who will eventually have babies, pay little to no taxes and become a heavy weight upon society.

The fate of Southern California is spreading to the rest of the country. For the first time, when I returned to my hometown of St. Louis my favorite pizza place had a kitchen staffed with Mexicans or Central Americans instead of teenage kids trying to earn some extra money and develop a work ethic. Political correctness will stifle any criticism until it is too late.

I have little sympathy for Americans and what they are watching happen to their country. Maybe democracy has its limits or maybe we are just a lousy, selfish citizenry. People must begin to speak above the din of popular media.

6.5 Million Foreclosures; Is There a Behavioral Problem?

One other thing. Everyone one I know that has been forced to move knew EXACTLY what they were doing. They were swept up in the hype. Who was to blame when mom and pop shareholders lost their money in the dot-com bust? The government? Stockbrokers? No, the investors with dollar-signs in their eyes.

6.5 Million Foreclosures; Is There a Behavioral Problem?

Anyone that cannot understand an amortization schedule should not be taking out a loan for $400,000.

Anyone that cannot afford to make payments due in a year unless their house appreciates by 5-percent or more so they can refinance should not be taking out the loan.

The homeowners are to blame for getting foreclosed upon, unless a mortgage broker defrauded them. Then they should sue for fraud.

Blame the Fed for leaving rates too low? The Fed cannot set fiscal policy in order to stop people from taking huge gambles subsidized by our tax code. Fiscal policy should depend upon other things, like inflation or economic activity.

Talk of a Real Estate Bottom Already Is a Waste of Breath

There are some factors that many neglect. First: immigration and population. Particularly in CA and FL, there is more demand for housing in good areas of cities. Second: double-income families. Families have engaged in an arms race and have been using women -- who used to stay out of the labor force -- for second incomes. Once enough families are double-income, the market adjusts up due to demand and more money that can flow to real estate.

This is not to say there is not more room for the market to fall. There is lots of room. I still hope all the air seeps out of this market over the next few years.

Global Stock Markets: Index Movements

I put a large proportion of my wealth (which is sadly not much) in a number of overseas index ETFs (GML, EZA, EEM and DEM) right at the peak in around Nov. 2007.

Ouch. I really thought that the South African market would move independently of the U.S. market. When I charted my ETFs against the Dow last week, they were in lock step the whole way. What is up with that???

Only DEM, which focuses on income-producing stocks, has held its value.

I have no plans to get out of the ETFs at this point, but I really have no sense of where these indeces are heading, in particular EEM. I think emerging markets have the most downside potential. Any thoughts?