Housing Doom

I know it’s kind of long, but as a reader pointed out to me- if you don’t want to watch the whole thing, you should at least skip to Professor Warren’s comments at the 27 minute mark.

She said she did a presentation where she was doing a presentation to Citigroup on bankruptcy. She was telling them how if they screen the weakest customers, the one’s most in debt, you could cut bankruptcy losses by 50%. Their response- “But if we cut those people off, that’s where we make all of our profits, and we won’t make nearly as much money.”

I finished watching the entire video a few minutes ago.

I was blown away, could not stop watching… it is extremely powerful. If the American people finally wake up to what is happening to them, then we better be prepared for a horrific revolution. The video brings into stark detail the suffering that is finally coming to the surface for all of us to see. It will not be long before everyone will be directly impacted by the coming economic storms.

I had mixed feelings throughout the video. Tears of sadness and deep grief for those in the film who had lost everything including their loved ones, was mixed with intense anger and disgust at those who perpetuate the suffering for their own benefit. I also had to remind myself that much of the blame also lies with the fraility of the human condition. This generation was raised on being accustomed to living with debt beyond our means. We became hooked on debt, and we have been too naive to recognize that it has been taking our lives slowly but surely.

This video is a sad commentary about what we have done to ourselves with getting into this predicament. Unfortunately, the video can do very little to provide much of a glimpse of the terrifying state that we will now be heading.

Davidintexas-

What this video brought home to me was the relationships between addicts, pushers and their enablers.

Ultimately the responsibility for staying straight lies with the addict- but we still try and keep the pushers off the streets to protect the young and vulnerable. Then as anyone who’s dealt with an addict knows- it’s hard to get them straight with enablers in their lives.

Debt has become an addiction in the US, and borrowers need to take responsibility for their actions. That said, I remember when it was decided to take the cigarette ads off of TV. Now I listen to the radio ads advocating, Unlock the equity in your house for that vacation you’ve always dreamed of! and I think that it’s going to be hard to get borrowers on the path to solvency without reigning in the pushers and enablers as well.

WC-

That’s OK- I should have mentioned the title anyway.

I don’t even want to watch it, I’m already sick of the debt-addicts in ‘Merika…my family is full of them and I’ve had to “enable” my 64 year old mother to keep her butt indoors.

After re-parenting myself in my 20s I became self-sufficient and debt-free finally in my 30s and will remain that way, but it seems I did so just as the looters and moochers are kicking in high-gear.

Not a fun time to be in the USA for a honest, self-sufficient business owner…

Well when you read that stats that the average college student graduates with about 4k in debt this isn’t surprising.

April

http://confessionsofamadprofessor.blogspot.com

This is a powerful message that I suspect will simply not be understood by far too many people. I think we have all gone soft and lost the ability as a nation to buckle down and do the hard work required to be fiscally healthy. I also believe what twist said regarding the addictive quality of spending. I know so many people who spend not to acquire or fill a need, but just to spend. It is as if they have a hole in them that they can never fill. And the banking industry knows this and works every angle to enable the addiction because their profits are huge. I can only hope that we individually and as a nation of people can shift out of the addiction and move toward a more frugal and basic existence despite the very powerful manipulations by banking to continue this sickness. One by one we may begin to wake up and realize that our power lies in our ability to get our own financial house in order, to spend significantly less, to realize that neither government nor business has our best interest in mind. Spread the word, flash is crass, bling will sting, the Joneses are on meth so you’ll never keep up with them.

How can we stop the madness?

John M. –

Reminds me of the “new economy” BS that was bandied about during the dot bomb peak and crash. IMHO this debacle is collapsing under it’s own weight. It is a financial train wreck and statements like Glassman’s and even actions by the Fed will prove to be insufficient to bring it to a halt. They may, however, be able to slow it down marginally and allow fraudsters and banksters to find a few greater fools on the way down.

oc-ed -

Those “greater fools” are likely to be 401k planholders, mutual fund clients, pensioners, insurance policy holders, and institutional investors like medical and educational endowments — in short, anyone who has money being held by some fiduciary that these fraudsters can corrupt. The State Street situation is especially alarming.

While we sleep, the pools of money set aside for our future security will likely be looted to save billionaires. There is only a tiny handful of people (Ambrose at the UK Telegraph is one) who is engaged throwing light on the process.

“Prudential Sues State Street Over Client Fund Losses”, by Josh P. Hamilton and Hugh Son, Bloomberg, October 1, 2007.

Prudential Financial Inc., the second- largest U.S. life insurer, sued State Street Corp. over mortgage related losses affecting 28,000 retirement plan clients. Reimbursing them will cost Prudential $80 million before taxes.

oc-ed -

Speaking of robbery from Social Security (and Medicare / Medicaid; the thieves speak of “entitlements” and “mandatory programs” when they’re eying these particular huge, lightly guarded pots of cash), author and Goldman Sachs biggie Bob Hormats along with a bevy of war planners from the American Enterprise Institute, Council on Foreign Relations, and other deep thinkers want to divert these resources to defraying the costs of America’s overseas military deployments. One of several smoking guns (high on the list is Hormat’s book!) is a June AEI seminar. I’ve got links under this August 6th post which include unannotated Doom transcripts of the whole two hours. I really need to finish an annotated version to put up as a Doom page, this stuff’s important.

Thanks for posting this – really sobering indeed. I’m up in Canada and it’s no wonder our dollar is soaring against the US. Perhaps I should do as Pres. Bush says in the documentary and take a visit to Disneyworld now that my $1CAD is today worth $1.01US (and still rising), compared with previous trips where it was only worth $0.68US-$0.75US.

Scary stuff…