I Told You So

It wasn't and isn't just "subprime". It wasn't and isn't just a minor blip affecting a few million people.

It is a general Credit Crisis that affects all of the nation. The vast troubles we've created (or allowed to be created, by indulging in the utter madness of FREE-MARKET FUNDAMENTALISM) have put us into a Great Depression. We're in a Great Depression NOW.

Mortgage Delinquencies, Foreclosures Rise to Record (Update3)
http://www.bloomberg.com/apps/news?pid=20601087&sid=a37uyBrX6dvY&refer=w...

"One in 10 American homeowners fell behind on mortgage payments or were in foreclosure during the third quarter as the world’s largest economy shed jobs and real estate prices tumbled.

The share of mortgages 30 days or more overdue rose to a seasonally adjusted 6.99 percent while loans already in foreclosure rose to 2.97 percent, both all-time highs in a survey that goes back 29 years, the Mortgage Bankers Association said in a report today. The gain in delinquencies was driven by an increase of loans with payments 90 days or more overdue."

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I think it's time we do away with the Federal Reserve. Their constant inability to manage has created a gap in our national credit.

Couple that with the average american's inability to save and instead rely on credit and you get to where we are now. Getting out of the financial crisis isn't a hard fix at all. Tighten your belts, close your wallet, and don't outspend your earnings.

This last year I've paid a considerable ammount of debt off. Next year all I will have left is student loans. This comes at great personal sacrifice. I don't have a new car. I don't own a home. However I'm one of the few people I know who doesn't wonder where their check goes each week. That alone has been worth it all.

MikeyA

MikeyA

...for example, what if the next Republican majority decided it was for the good of the country (despite losing their chance at reelection) if they eliminated the burden of all Medicare and Medicaid programs? If that party decided to look after the welfare of the majority of Americans, and let the elderly (or the young who are too weak to survive on their own to) die naturally, wouldn't that be a good thing? Just eliminate those programs and there would be a dramatic reduction in taxes. Couple this with a tax program that would allow 100% of all contributions to the maintenance of those too poor to exist without assistance to be written off of individual and corporate gross incomes, and we would find out if individual and corporate charity could take the place of government assistance.

Old South End Broadway

...and people are just too cheap to buy the various forms of insurance out there.

Old South End Broadway

I'd be willing to bet if you went into the homes of many uninsured you'd find they have cell phones and cable t.v. You know the essentials.

Our country is VASTLY underinsured. Even those with health insurance don't have disability insurance. So when a problem hits a family the family is devastated.

Unfortunately I learned by this very thing happening to a family member.

MikeyA

MikeyA

We're only underinsured when you don't consider that the costs of basic health care are just too high.

I agree that having luxuries like cell phones and broadband Internet access is ludicrous, when things more necessary like good food and basic health budgeting fall by the wayside.

...until someone torched my dad's car one winter. My mother was afraid to let anyone in. I got a cell phone, and would call her every time before I came to the back door of my house. I then found that the convenience of calling her to find out what she needed when I was at the grocery store made shopping easier. My brother can only be reached on his cell phone (he has completely given up a land line).

We took care of my father during his last year of life. The care you get in a nursing home is never as good as with a loving family. Even though the lower paid staff were very caring (one even used to buy a hamburger for my father with her own money) they are too overwhelmed with patients to give them the concern they need. My father was an effort even for his family (he "cold-cocked" more than one staff member at the nursing home), and I appreciate what the aids do but they can never be as caring as family. Also, there were two of us (my mom and I) watching my father every minute so he would not harm himself.

Old South End Broadway

It's been well enough documented that the majority of those who bankrupt due to medical bills, already had health insurance at the onset of the medical event in question.

Health care is always rationed. We happen to ration it by PRICE. That means to blatantly price it over what many people can pay. That forces people into insurance schemes, where they encounter either further abuse, or they are milked dry over time instead of just in one shot.

We did the same thing with houses. Look how well THAT turned out.

GZ

I commend you on your attempts to warn with your information and insight.

If there was anyone galloping through the streets with their bullhorn warning the villagers of impending doom, it was you.

well done and a hearty cheers for your efforts. you were spot on.

... I guess. You certainly know me well enough to know that I'd rather be wrong about the suffering of millions and the eventual violent deaths of tens to hundreds of thousands. I had to bet with myself that the worst of our society would come to dominate socio-economics. I was right. Damn me.

Ohio is now officially in worse shape that the national picture (and when you come back to visit, I'm sure this isn't unfamiliar to you):

More fall behind on mortgages
59,700 in Ohio, 10,800 in Ky. have fallen into foreclosure
http://news.cincinnati.com/article/20081206/BIZ01/812060326

"Nearly one of eight homeowners in Ohio with mortgages were behind on their payments or in foreclosure at the end of the third quarter.

That's worse than the national rate of more than 10 percent, according to the Mortgage Bankers Association, which released its quarterly delinquency survey Friday."

For specific numbers from the article:

"In Ohio, 3.93 percent of the 1.5 million mortgage-holders were in foreclosure - about 59,700 households, while another 8.31 percent or 126,000 were behind on payments."

Ohio is essentially Ground Zero for the Greater Depression. I like that term; I had been using GDII before, but others on relevant blogs have been using the former term. It does make the point. This Depression will, MUST be worse than the one in the 1930s. Our businesses are much more dependent upon DEBT, than in the 1930s. Many more people have no recourse to local farming (even gardening) to alleviate hunger, unlike in the 1930s. We have too many people in too deep of debt, unable to feed themselves and who are surrounded by legal systems that already assume they are serfs. TROUBLE IS BREWING. Resorting to the solutions offered by weapons will become common.

...attractive in such times. And even someone who is not Marxist might believe that the son or daughter of an industrialist might be more liberal than their dead parent. It might be a good time for those with wealth to hunker down with it.

Old South End Broadway

Recessions are part of living in a free market economy. They come and they go. Each has its own causes and politicians wring their hands and flap their gums, but only the free market can lift us out of a recession.

People will hunker down for awhile. They will pay off debt and put off buying consumer goods. The economy will continue to suffer. Those who signed mortgages they could not afford will eventually end up in housing they can afford.

After a while, people will need or want those consumer goods again and start spending. People will go back to work and we will be back to normal.

So it has been since the advent of a currency driven economy. So it shall be again.

Too many people freak out too much about recessions. Their like hurricanes or tornadoes. They do damage and are painful for those affected by them. But they are also naturally occurring phenomena that we can nothing to stop. So we weather them.

MikeyA: My sincere congratulations to you, sir. Society needs more people with your self-control and good sense.

From the article: The median home price in the fourth quarter probably will be $190,300, down 19 percent from the record $226,800 in 2006’s second quarter, according to a Nov. 24 forecast by Fannie Mae, the world’s largest mortgage buyer.

This is the same Fannie Mae that is suffering a little cash flow problem these days, brought on by poor financial decisions and justified by creative statistics. Ah, well... I note that the median price is listed when what I'd really like to see is the mode. I imagine that many people reading the article won't know what the median number refers to, and will accept the median as being the average. Not so. The median is the number right in the center of the list of numbers. The mean value (also called the average) is the sum of all the numbers in the list divided by the number of numbers in the list, and the mode, which is seldom seen, is the number that occurs most often in the list. The figure that I'd really like to see from Fannie Mae is the mode. For those who flunked High School math, or who are bored or curious, check out the link: http://www.purplemath.com/modules/meanmode.htm

As an example of the way this could misrepresent home prices, consider this list of home prices in hundred thousands:

1, 1, 1, 1, 5, 7, 9, 9, 10

Statistics 101 with Professor Zero would indicate that the:
Mean Value or Average: 4.88
Median value: 5
Mode value: 1

So even though the average and the median values are about $500,000 the vast majority of people are paying $100,000. I'm not saying that's the case here, I'm saying you can't know until the other values are listed. It would also help to know the top and bottom of the range used.

One hundred and ninety grand is a lot of dough. We're talking mucho dinero here. Now, I rub elbows with a lot of people these days, and out of all the people I actually know on a first name only basis, I can't think of anyone who can afford to pay one-ninety for a house with twenty percent down and a twenty five year mortgage. Newspapers and self-proclaimed financial experts are howling about falling home prices and falling home sales, and all we're really seeing is the market adjusting for the outrageously inflated home prices that developed over the last ten years. I can't afford a home right now. I can't even afford the taxes on a home right now, particularly in the city of Madison, Wisconsin where the average person has been forced out of the city by high taxes.

From GZ: It's been well enough documented that the majority of those who bankrupt due to medical bills, already had health insurance at the onset of the medical event in question.

I wasn't aware of that, but given the cost of a medical calamity I can imagine that it's true.

Mad Jack
Mad Jack's Shack

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