The Struggling Class – The emergence of consistent poverty. How the other half live financially. 40 million Americans on food assistance and large unbanked population. Family Dollar up over 80 percent through the recession.
It is disturbing to see many articles published in foreign newspapers and magazines highlighting the plight of the middle class in America. You would think that our own media would want to cover this issue which should be at the top of the list for everyone. Instead, our mainstream media systematically attempts to keep everyone financially in the dark and shell shocked into spending money (assuming they still have disposable income). They do this by pumping out inane show after inane show to keep people numb to the deeper problems of the day. The middle class is giving way to a new struggling class. This is a class that is defined by a constant struggle merely to chase the middle class carrot on the stick while the large banking sector becomes ever more powerful and the resource pie shrinks. The recovery never even appeared for millions of Americans.
The trillion dollar bailout you didn’t hear about – Commercial real estate values plummet again yet banks hide losses. A $3.5 trillion financial disaster in the making. We are now proud owners of an AMC theater and Chick-fil-A.
The latest data on existing home sales should tell you exactly where we are in this so called recovery. Average Americans are unable to purchase big ticket items without massive government subsidies. It is also the case that all the too big to fail banks are standing only because of the generous support of taxpayer money. Without large tax credits and the Federal Reserve buying down mortgage rates the housing market is extremely weak. Yet very few of the housing “analysts†actually bother to ask why they are weak in the first place. The employment market is in disarray and wages have fallen for everyone outside of the top 1 percent of income earners. The bailout fatigue is running out of steam but banks are using clandestine methods to offload trillions of dollars of commercial real estate to taxpayers. The next giant bailout is already happening but you probably haven’t heard about it.
Sin City and Nevada suffer brunt of recession – 25 percent underemployment rate for Nevada reflecting depression like stats. Foreclosure data on home that was picked up for $120,000 but had a second mortgage of $1.2 million.
The great recession has touched every state across the United States with a reverse Midas touch. Every average American has felt this recession to one degree or another. Yet few states have felt the economic implosion like Nevada. Here we have a state that highlights the heavy reliance on the housing bubble, conspicuous consumer spending, and ultimately the pop of the debt bubble. The data coming out on Nevada is not encouraging and overall trends show deep problems for states in the Southwest. Yet now that the curtain is being pulled back, we start getting a bigger glimpse of the profound problems that confront Nevada moving forward. We’ll look at population changes but also examine the housing and employment markets of the desert state.
As more Americans save the typical too big to fail banking savings account is paying close to 0 percent in interest. At the same time the average credit card interest rate is over 14 percent.
The one silver lining of this crisis if there is one to be had is that many more Americans are actually saving more money. However the problem that many now face is historically low interest rates through bank savings accounts. Average Americans have few places to go receive a decent return (5% or lower) without funneling their money into the highly speculative world of the stock market. The personal savings rate is at a level not seen for two decades and is occurring during the worst crisis since the Great Depression. Yet the interest on savings accounts is incredibly low while the too big to fail banks also provide credit cards for rates that are still near record levels. It is understandable that safer investments now offer lower rates. Yet the margin is based on taxpayer dollars. In other words, big banks are using the leverage of bailout funds to give Americans virtually nothing for stashing money away while ramping up the costs on credit cards and other fees like overdraft charges.