The Ponzi Decade: A Lost Decade in Stocks, Industrial Production, U.S. dollar, and Housing. How we Managed to Inflate and Destroy the Biggest Financial Bubble of our Generation.
It is fitting that we end the current decade just like we started it, with the bursting of bubbles. In the early part of the decade we were dealing with the fallout of the technology bust. That was quickly replaced by the even bigger housing bubble and that has now popped as well. The trillions lost by average Americans is incredible but in reality nothing was technically lost because the entire decade was one enormous Ponzi scheme and like all Ponzi schemes the wealth created is false. Bernard Madoff was simply the mascot of a decade built on phony money spewed out by the corporatocracy of Wall Street. What is even more troubling is how the actions taken by Wall Street are not being prosecuted in the same fashion as our justice system took on Bernard Madoff. The reason for that is the corporatocracy has legalized national bank robbery.
Credit Card Debt up to 15 Percent of Annual Household Income. Average Credit Card Debt in 1980 was $670 and Today it is up to $7,800. The Slimy World of Credit Card Lending.
Credit card companies have made it their passion to ensure that every eligible American has access to a credit card. They have also created a financial labyrinth with traps in every corner from tricky financial statements to interest rates that would make loan sharks blush. The credit card has become some form of financial rite of passage. Even colleges are plastered with credit card pushers trying to get their new batch of Americans hooked on the world of debt financing. In a way, this is an early initiation into the world of spending what you don’t have so when the U.S. Treasury and Federal Reserve create money out of thin air many Americans don’t find this concept foreign.
The Commercial Real Estate Default Wave is Here: Commercial Mortgage Defaults Now at 16 Year High. 3.4 Percent of all Commercial Real Estate Loans in Default.
What has been lost in the housing talk recovery is the grim statistics that commercial real estate has fallen 37 percent in value in the last year. This wouldn’t be such a big problem aside from the tiny detail that some $3 trillion in commercial real estate loans are still outstanding. The commercial real estate debacle is already happening with defaults reaching 16 year highs. This is already occurring before many of the commercial real estate loans reach their refinance dates. In some instances banks are simply ignoring non-payment and giving borrowers a few more months or even years. Why? Because they can still claim the note is current and claim the asset at inflated values.
Pillaging the Average American: Wall Street Paying Back Bailouts with Bailouts. Total Bailout Package Ceiling of $14 Trillion Yet Focus Only on TARP Repayments in the tens of Billions.
In the last few weeks the corporatocracy has gone on a massive Madison Avenue public relations tour touting the great job banks are doing and how they are paying back the taxpayer for the generous gift of life. Instead of working with small business or lowering credit card rates banks have taken it upon their shoulders to issue record breaking bonuses. It is true that banks are paying back TARP handouts yet few are focusing on how the banks have made profits in the last 9 months since those dismal days of March. There is also this convenient avoidance of fact that some $14 trillion in bailouts have been made to banks and Wall Street. The TARP repayments amount to a few hundred billion, no small amount, but a fraction of the real cost to the American taxpayer. The average American has benefitted very little from the corporatocracy handout to their banking colleagues.