"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
Since Bethenny Frankel is officially out as a regular on Bravo's 'The Real Housewives of New York City,' we can now speculate on who's going.
Judge Garr King laments he can't sentence the one-time journalist to more than the 18-month maximum for Social Security fraud.
Why? Because now Fox News has to explain to viewers why O'Donnell is ready to serve in the US Senate even though she's not ready to appear on Fox News Sunday. Awkward.
robert shumake
SON says:
September 9th, 2010 at 4:04 pm
DAD I AM HOMOSEX.
DAD says:
September 9th, 2010 at 4:04 pm
SON I AM DISAPPOINT.
Rob Mac says:
September 9th, 2010 at 4:53 pm
Or we could simply “print” money to retire some of our debt. This would reassure people who get freaked out at the size of the debt and would have the same inflationary effect of handing the money out to American citizens. The stimulative effect would likely be a bit less, but I’d take that tradeoff.
JR says:
September 9th, 2010 at 4:54 pm
Aren’t you missing the role of international trade. What you say makes sense if all goods and services are produced locally. Once you take intl. trade into account, more/printed money could simply go into buying more from other countries, who could theoretically hold that money for an indefinite time.
chris says:
September 9th, 2010 at 4:56 pm
It’s true that at some point the money-printing would spark high inflation.
Yes — specifically, after aggregate demand was boosted to the point that it exceeded aggregate supply. We’re nowhere near that point — I think literally trillions of dollars short of it — so there’s plenty of room to play around with helicopter drops. Please do, Mr. Bernanke.
timmie says:
September 9th, 2010 at 4:59 pm
Did that truly huge spike in Fed spending 2008-2009 lead to rapid economic growth? No. What evidence is there that things would be any different now? None.
The Great Reckoning that we are now experiencing was, as your cite points out, only postponed through half a decade of public and private debt increasing by 10% a year and when that became unsustainable our financial system cratered.
Does anyone think we can return to those levels of profligacy for five years or more? Does anyone doubt that even that level of new debt would prove inadequate to cure what ails us?
Our recent history has been one huge Keynesian experiment gone wrong. But to put out the fire in the dining room Matt wants to burn down the house.
chris says:
September 9th, 2010 at 5:29 pm
Did that truly huge spike in Fed spending 2008-2009 lead to rapid economic growth? No.
No, it only halted a once-in-a-century level of economic collapse in its tracks.
But I guess since the first gallon of water didn’t put the fire out, it’s time to abandon that plan and switch to gasoline.
Ape Man says:
September 9th, 2010 at 8:32 pm
“Or we could simply “print” money to retire some of our debt.”
This is incorrect. If you think it through, it will help you understand how money works on the macro scale.
A treasury note is an account at the Fed that bears interest. It has a fixed, often very short, term of maturity.
If you “print money” to “retire” that debt, all you are doing is changing those interest-bearing Fed accounts into non interest-bearing Fed accounts. The people who held those dollars want to hold them as Treasury notes. They will immediately reinvest them in… Treasury notes.
3
zyxw says:
September 9th, 2010 at 8:50 pm
Another structural problem now is income inequality. If income was spread out more fairly there would be a lot more money spent generating more jobs, etc. There’s only so much the super rich can spend–after awhile you really can’t buy that much more stuff, so instead they are hoarding it at the moment waiting for the economy to rebound so they can eventually invest in something and make even more money to hoard.
Shooter242 says:
September 9th, 2010 at 10:33 pm
* You can print all the money you want but if people don’t want to borrow, it doesn’t matter.
* As for throwing everybody a grand, it didn’t work with Bush’s $600 because you and everyone else knows it’s a one-off.
* Then there is the payroll credit for about the same amount of money, how did that work out?
Do you think our problem could be related to Congress serving up legislative pigs in a poke? For all it’s wonderfulness, health insurance in Massachusetts has led to Mass Gen Hospital
to barring new primary care patients. Now imagine that over an entire country. Any chance that would lead to more saving and less spending?
As for income inequality, Al Gore making millions has no effect on anyone that he doesn’t employ. Interestingly, the US is pretty far down on the property rights ladder globally. Apparently we are behind China, Gambia, and Jordan. Having yahoos here threaten to confiscate wealth by hook or crook, isn’t reassuring.
BB says:
September 9th, 2010 at 11:23 pm
So, why do we even keep track of the deficit? I accept the fact that we have a sovereign currency, not on a gold standard, etc., which means that we don’t have to go in debt (i.e. sell bonds) for every dollar we print/create. Thus taxation is merely an anti-inflationary measure. So…shouldn’t we just keep track of inflation and adjust our federal spending accordingly, since the deficit doesn’t actually mean anything?
urgs says:
September 10th, 2010 at 2:23 am
Defraud small savers (thats allright, since so many of them are foreigners nowadays – evil Chinese, many of them living from less than 1$ a day), shovel some windfall gains to big business ===> ?????????? =====> Jobs!
aelkejeellekeleljklejlelje
Evil Twin says:
September 10th, 2010 at 2:35 am
You can print all the money you want but if people don’t want to borrow, it doesn’t matter.
And here we see the return of the invisible bear riding phantom bond vigilantes. Yes, the modifiers are a bit unclear. That’s because Shooter is a fucking moron whose knowledge of financial matters is roughly the same as a four month old.
Hey, dumbfuck, do you know what you do when people don’t want to borrow money from you? You raise the stakes, you promise them more in return for loaning you the money. Do you know what interest rates look like right this moment you dimwitted clod?
Come back when you have something to say that isn’t discredited talking points.
Lewis says:
September 10th, 2010 at 7:45 pm
At the risk of confirming Matt’s views, I think Prof Keen explains it well : http://www.debtdeflation.com/blogs/2010/09/05/back-to-the-future/
Superior Excellence Better Flavor-Organic Kona Coffee | Toilet Safety Rail says:
September 11th, 2010 at 5:50 am
Matthew Yglesias » Mo’ Money, Mo’ Demand