Monday, September 20, 2010

Being Right or Making Money

"many consumers are stopping their mortgage payments, and then blowing the money they would usually pay towards their mortgage on luxuries"


What percent of these insolvent consumers are buying "luxuries" and how much do these luxury purchases account for in relation to the total spending of these insolvent consumers? 


Fact is, you can't answer these questions because you have shit data and lurid conclusions based on suspicion, rumor, anecdotal "evidence" and the burning envy that still defines America . . . particularly the astonishingly perverse envy of the "haves" for the "have nots." 


No doubt a "significant" number of the falling middle class are insanely maxing out their cards and gaming the system--this is America--but in an environment of 40 million-plus on food stamps, 20% real unemployment/underemployment, ARM blow-ups, and so on do you really believe most people are spending the money they don't have to pay their mortgage payments on luxuries?   I would suggest that before asserting common sense defying conclusions, you dig up some actual data that meaningfully supports something stronger than this bullshit.


What is this, National Enquirer for the educated set? 


Okay, the put-down is a rhetorical one, George.  I generally admire your work and, of course, ZH is the shiznit.  But this developing story line of the average underwater American bleeding the rest of us dry while they continue living The Life is getting real old.  See Tyler's similar post from just yesterday. 


I suspect these unsupported conclusions say more about the audience than they do about the typical insolvent consumer, regardless of the testimonials.  Sampling bias, anyone?


Final thought that apparently is not widely known here: If you have both income and overwhelming credit card or other debt, you can't just skate by not paying the bills.  It might work for a while with the house, since the banks are complicit in hiding the bad debts on their books, but it doesn't work anywhere else for long.  One late payment and your credit line is cut off (and we all know card credit limits have been slashed to begin with.)  Then you get taken to court.  My daughter is an attorney working for one of the nation's largest debtor-relief firms and she's been blown away by the onslaught of suits brought by creditors in the last 6 months--her workload just writing Answers has increased about 600%.  When it's not the banks themselves, it's the collection agencies that have bought the paper--don't pretend that a charge-off by the original creditor means the debt disappeared for good.  Many people on unemployment are being garnished.  People who have retirement accounts are tapping them out. 


I look forward to some quality analysis of these issues as the data emerges and creative, conscientious analysts applying themselves to doing it--wish I didn't have to keep hearing this incessant drumbeat of unsupported resentment until that day arrives. 



We are so happy that our favorite chic-cheap-hipster store has found itself dead center in the middle of controversy as a result of the new Supreme Court ruling that allows corporations to contribute freely to political causes.



Trend setters that they are, Target was one of the first to take advantage of this ruling by giving money to a 'pro-business' PAC that in turn supported a gubernatorial candidate opposed to same sex marriage.



Unfortunately for Target, just as they were lighting up a celeb-studded performance art spectacle at the Standard Hotel in NYC, they were being 'outed' for making this contribution.



Still, we're thankful to them for shining a spotlight on the critical question: is what's good for a corporation good for America? Because despite Target's carefully cultivated earthy-crunchy-hipster-greenster-image, it is really just a very BIG corporation. Yes, they are cool merchants with a carefully cultivated good guy image, but do we want any company with infinitely deep pockets influencing public policy decisions? Do we want individuals at big companies with control of this money making nearly invisible contributions to special interest groups? (Minnesota law requires some transparency, but not all states do.)



Since business is all about the money, we don't expect that anyone who is making big bucks off Target ads, or selling huge amounts of product through this mass retailer, or basking in the glow of major promotional opportunities like the one at the Standard, to be turning their backs anytime soon on the King of discount cool.



Still, no company wants bad press, angry customers or unhappy institutional investors. So, as Target carefully considers how to respond to this chain of embarrassing events, we suggest they think about this: how about a pledge to stop contributing to these kinds of political groups that can unduly and without transparency influence our political process?



Better yet, how about really being cutting edge and targeting their energies toward support of real campaign finance reform aimed at taking big money and special interests out of our political process?



Now that would be the earthy-crunchy-good-guy thing to do.





Read more from Rosalyn Hoffman at Bitches on a Budget.

Join the 67,000 fans of Bitches on a Budget on Facebook.














robert shumake

"many consumers are stopping their mortgage payments, and then blowing the money they would usually pay towards their mortgage on luxuries"


What percent of these insolvent consumers are buying "luxuries" and how much do these luxury purchases account for in relation to the total spending of these insolvent consumers? 


Fact is, you can't answer these questions because you have shit data and lurid conclusions based on suspicion, rumor, anecdotal "evidence" and the burning envy that still defines America . . . particularly the astonishingly perverse envy of the "haves" for the "have nots." 


No doubt a "significant" number of the falling middle class are insanely maxing out their cards and gaming the system--this is America--but in an environment of 40 million-plus on food stamps, 20% real unemployment/underemployment, ARM blow-ups, and so on do you really believe most people are spending the money they don't have to pay their mortgage payments on luxuries?   I would suggest that before asserting common sense defying conclusions, you dig up some actual data that meaningfully supports something stronger than this bullshit.


What is this, National Enquirer for the educated set? 


Okay, the put-down is a rhetorical one, George.  I generally admire your work and, of course, ZH is the shiznit.  But this developing story line of the average underwater American bleeding the rest of us dry while they continue living The Life is getting real old.  See Tyler's similar post from just yesterday. 


I suspect these unsupported conclusions say more about the audience than they do about the typical insolvent consumer, regardless of the testimonials.  Sampling bias, anyone?


Final thought that apparently is not widely known here: If you have both income and overwhelming credit card or other debt, you can't just skate by not paying the bills.  It might work for a while with the house, since the banks are complicit in hiding the bad debts on their books, but it doesn't work anywhere else for long.  One late payment and your credit line is cut off (and we all know card credit limits have been slashed to begin with.)  Then you get taken to court.  My daughter is an attorney working for one of the nation's largest debtor-relief firms and she's been blown away by the onslaught of suits brought by creditors in the last 6 months--her workload just writing Answers has increased about 600%.  When it's not the banks themselves, it's the collection agencies that have bought the paper--don't pretend that a charge-off by the original creditor means the debt disappeared for good.  Many people on unemployment are being garnished.  People who have retirement accounts are tapping them out. 


I look forward to some quality analysis of these issues as the data emerges and creative, conscientious analysts applying themselves to doing it--wish I didn't have to keep hearing this incessant drumbeat of unsupported resentment until that day arrives. 



We are so happy that our favorite chic-cheap-hipster store has found itself dead center in the middle of controversy as a result of the new Supreme Court ruling that allows corporations to contribute freely to political causes.



Trend setters that they are, Target was one of the first to take advantage of this ruling by giving money to a 'pro-business' PAC that in turn supported a gubernatorial candidate opposed to same sex marriage.



Unfortunately for Target, just as they were lighting up a celeb-studded performance art spectacle at the Standard Hotel in NYC, they were being 'outed' for making this contribution.



Still, we're thankful to them for shining a spotlight on the critical question: is what's good for a corporation good for America? Because despite Target's carefully cultivated earthy-crunchy-hipster-greenster-image, it is really just a very BIG corporation. Yes, they are cool merchants with a carefully cultivated good guy image, but do we want any company with infinitely deep pockets influencing public policy decisions? Do we want individuals at big companies with control of this money making nearly invisible contributions to special interest groups? (Minnesota law requires some transparency, but not all states do.)



Since business is all about the money, we don't expect that anyone who is making big bucks off Target ads, or selling huge amounts of product through this mass retailer, or basking in the glow of major promotional opportunities like the one at the Standard, to be turning their backs anytime soon on the King of discount cool.



Still, no company wants bad press, angry customers or unhappy institutional investors. So, as Target carefully considers how to respond to this chain of embarrassing events, we suggest they think about this: how about a pledge to stop contributing to these kinds of political groups that can unduly and without transparency influence our political process?



Better yet, how about really being cutting edge and targeting their energies toward support of real campaign finance reform aimed at taking big money and special interests out of our political process?



Now that would be the earthy-crunchy-good-guy thing to do.





Read more from Rosalyn Hoffman at Bitches on a Budget.

Join the 67,000 fans of Bitches on a Budget on Facebook.














robert shumake

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robert shumake





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