Credit Cards the Opiate of the American Middle Class – The Withdrawal is in And the Wall Street Dealers are Raking in Trillions of Dollars. 2 Credit Cards for Every Man, Woman, and Child in the U.S.
If you want to know how reliant the middle class has become on credit cards all you need to know is that in circulation we have 631 million credit cards in the U.S. For a nation with slightly above 300 million people this is roughly 2 credit cards for each man, woman, and child. Credit cards and their subsequent “plastic free†variety of home equity lines of credit caused a massive boom that really put a veil over the underlying destruction of the middle class. As Americans spent their way inching closer to the day of paying the Pied Piper, many thought they were getting wealthier when in reality, they were merely leasing a smoke and mirrors operation of transferring all their wealth to the banking sector of the economy. It would be one thing if banks were lending their own money and putting their operations at risk. When push came to shove, Americans get booted from their homes and have cars reposed while banks steal taxpayer bailout money to enrich themselves even further. In addition, big operations funded by big money are now going out there buying properties at fire sale prices with government backed money.
Real Estate Still Overpriced in California in many Markets and Paying your Mortgage with Unemployment Benefits – Examining Housing Values through Employment and Local Market Trends. Los Angeles has a 4.4 Income to Home Price Ratio even after a 42 Percent Price Decline.
As housing prices have collapsed from their halcyon bubble peak, many are peering out into the foreclosure landscape that is the current U.S. real estate market and are wondering if prices now fall in line with economic fundamentals. The problem in many areas across the U.S. isn’t so much with housing prices but actual employment and wages. Take for example cities like Detroit where homes can be had for less than the price of the cars they are producing. At the crux of the banking bailout and its subsequent failure was that it only focused on aiding the stability of the current banking order. As trillions of dollars have been funneled to prop up banks, in reality, little has been done in remedying the foreclosure crisis because at the core, prices were in bubbles. The pop is always painful. Trying to mitigate the problem has essentially created a transfer of wealth to banks where they now, after years of cronyism, can now offer principal reductions which actually had a place in what are known as cram downs through bankruptcy. A pound of flesh was always extracted.
How the Middle Class Slowly Evaporated in the Last 40 Years – Loss of Manufacturing, Bank Deregulation, Hyper Consumption, and Short-term Profit Seeking from Wall Street.
Some like to think that the middle class has always been a fixture of American society. In fact, the rise of a steady and strong middle class didn’t happen until after World War II. Clearly people can’t look at the economically painful Great Depression, which rampaged the nation from 1929 to 1939 as a good time for average Americans? In fact, even a few years after World War II the nation hit a few rough patches with price controls and millions of Americans rushing back into the workforce. But with many of the industrial economies in tatters in Europe and Asia, the U.S. had a well positioned spot for decades of strong growth. But make no mistake by looking at history that we were producing and manufacturing goods for the world. And things seemed to work out well for many Americans even with a robust manufacturing base.
3 Underground Real Estate Practices Moving the Market – Short Sale Fraud, Squatter Stimulus, and Buying Before Foreclosing.
In the early days of the housing bubble here in California and other bubble states a handful of people were raising alarm bells that mortgage fraud was occurring at unprecedented levels. The housing industry initially came out skeptically stating this was only a handful of wayward people. As it turns out, it was the vast majority of the industry sticking people into the most toxic loans for the highest level of commission. What was good for the borrower wasn’t necessarily what was the best for the mortgage broker’s bottom-line. After the housing bubble burst, we realized the industry was corrupt to the core and that practices that were standard were largely a joke. The housing market became one big free grab bag of money. Some now think that we somehow have stopped this massive fraud but that is a big misconception. The fix is in.