Poor Us: The Great Depression 2.0

June 1, 2009

Are Gun Sales Silver Lining for Gloomy Stock Market?

Filed under: Harbinger — Tags: , , , — debacled @ 6:13 pm

By  Poor Us Guest Contributor srhansen

In cloudy times it often suits to look for a silver lining. According to many reports, gun sales are booming.  Peter Bronson, in an article in the Cincinnati Enquirer, quotes a clerk at One Shot, a local gun store,”Go anywhere else and the economy is in trouble, but walk into a gun shop and you’ll think the economy is fine.”

A story by Frederick Kunkle in The Washington Post, refers to Gary Kleck, a researcher at Florida State University’s College of Criminology and Criminal Justice, who indicated that times of uncertainty often spur sales of firearms because of concerns about personal safety. According to the Wall Street Journal, “fear and greed” have propelled a 27 percent spike in background checks for gun sales.

And, for the first time in my life, I heard an advertisement for gun sales on the air–Fox Sports Radio.  I guess it shouldn’t surprise me that Fox chose this particular sponsor, and one could argue that it’s aimed at the field and stream folk. But it’s just as likely targeted at soccer hooligans and NASCAR supporters.

The web site is called ColdWarShooters.The home page features a $2,499.99 semi-automatic carbine with a 17.4” civilian legal barrel.  Pistols range from $300 to over $1,000. Since the cold war is over, who is the target consumer? The burglars?  The burgled?  Both?

What’s the sliver bullet, er lining? My guess is silk. Everyone’s looking for stock hunches, so perhaps its time to channel that 401k into AK 47s. Maybe Smith & Wesson? Or Sturm Ruger? My choice is Hillenbrand, parent company of the Batesville Casket Company.  It’s a good bet that whether it’s the good guys or the bad guys lockin’ and loadin’, the end result will be a rising demand for burial supplies.

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May 21, 2009

Bubblicious: From NPR to MGM Recession Tales Defy Reality

Girl And Movie Poster, Cincinnati, Ohio, 1938 by WPA Photographer John VachonA couple of weeks ago on NPR Planet Money, a podcast often referenced by Poor Us, reporter Adam Davidson interviewed TARP Oversight Committee Chair Elizabeth Warren, who also happens to be a Harvard law professor with 30 years of experience studying  contracts and credit. Davidson proceeded to get all “yelly,” dismissing Warren’s focus on the plight of the family in the financial crisis as “not in the mainstream of views on this issue,” and finally instructing her on what her job should be:

“What it feels to me is what you are missing is that — I think we put aside your pet issues. We put them aside. We put them aside until this crisis is over.”

The response from listeners was immediate and fierce as hundreds of comments appeared on the Planet Money blog deriding Davidson on his unprofessional conduct and his undisguised pro-Wall Street,  anti- family bias. Ryan Chittum of the Columbia Journalism Review blog The Audit explains:

If you want a peek inside business-press mentality, and why certain stories get reported and others don’t, you can do worse than start here. It sees Warren as an outlier whose views, based on decades of research, are suspicious. It would never, ever have badgered a former bank exec, say, like this if one had been chairman of the panel.Davidson has been talking to too many bankers and insiders who sneer at someone not inside their bubble.

It’s really no surprise that Wall Street’s interest in wage-earners ended as soon as our pockets had  been picked clean. Still it was a shock to witness a reporter claim the oligarch’s POV as “mainstream.”  Perhaps Davidson needs to get out of the bubble and visit the “real” America.

Of course, he might get more than he bargained for on his Sullivan’s Travels. In that 1941 Preston Sturges’  satire, a movie director famous for his screwball comedies decides at the height of the Great Depression to take to the road incognito as research for his next picture.

Sullivan:     I want this picture to be a . . . document. I want to hold a mirror up to life. I want this to be a picture of dignity . . . a true canvas of the suffering of humanity.

LeBrand:    But with a little sex in it.

Sullivan: [reluctantly] But with a little sex in it.

Davidson might find out as Sullivan did that “true humanity” is not a  “pet project” with which to trifle. Of course, Sullivan retreated right back into Hollywood’s bubblicious version of reality, but his dream of holding up a mirror to our suffering lives on. As we speak, hundreds of empathy-fueled network execs and studio chiefs are struggling to fathom the petty concerns of the worried, out-of-work sad sacks who litter the landscape beyond the San Andres Fault.  They mean to care, and they certainly want to sell tickets and garner high ratings, yet too often when they let their imaginations roam outside the bubble they get reality wrong.

For expample, what made them think that now’s the moment we’re itching to be reminded  that “greed-is-good”?  Yet they’ve fast-tracked Oliver Stone’s Wall Street 2, with the unavoidable Shia LaBeouf in the Charlie Sheehan role.

And surely the perfect entertainment for a nation with  six million unemployed is  Fox network’s upcoming reality show:

Someone’s Gotta Go, where each week employees at an actual small business that needs to cut costs will pick who gets the heave-ho.”

Of course, for every lame attempt to relate, such as this gag-inducing pitch:

The Company Men, John Wells (“ER” executive producer) writing and directing, now in production. Ben Affleck gets downsized from hotshot corporate gig; salt-of-earth brother-in-law Kevin Costner helps him find blue-collar work.

There will be a snarky effort to crack wise like this “Friends” without benefits sitcom:

Canned, ABC, sitcom Group of Generation X friends all get laid off from their banking jobs.

Nonetheless, for all its faults, we’re only on the hook to Hollywood for the price of a ticket, whereas Wall Street and their bedfellows in corporate media cost us everything we’ve got or ever hoped to have. Tip to Davidson: if you or your ilk do step outside the bubble, travel fast and incognito or you could end up in reality according to director Sam Raimi (Spider-man, Evil Dead), who is always looking to tear the bubble a new one. :

Drag Me to Hell, Loan officer (Alison Lohman) forecloses on elderly woman, causing demonic curse. May 29 release.

Here’s a round up of greenlighted economy-themed films and TV series (after jump)  from Recession’s star rises in Hollywood:

Recession Films


May 15, 2009

There’s A Pony In There Somewhere: US Owns 38,000 (and counting) Foreclosed Homes

Pony Rides by kirawolfess Deviantart.com

How do the rich get richer? Now that Bernie Madoff is out of business, a lot of previously well-fixed folks are themselves trying to remember the magic formula.

Rest assured, for every never-rich person such as myself contemplating work without end, there is a get-rich schemer scanning the economic wasteland for ways to turn catastrophe into cash. A handful will undoubtedly succeed in finding a pony wrapped up in all that bad paper.

Case in point: I once worked for a man of significant wealth who had made his money buying up real estate abandoned by the military following WWII. Sites in strategic military locations like the strip of ocean frontage now known as Marina del Rey, CA.

That’s why when I read today’s headlines about the governments’ growing stockpile of foreclosed homes, and burgeoning tent cities I can’t help but think that somewhere someone is seeing the ghost neighborhoods of Detroit the the floating cities of the future or Hobbity tree-house retirement villages for eco-sensitive baby boomers.

Gov’t losses big in home market – USATODAY.com

Since 2007, the Department of Housing and Urban Development has acquired at least 110,000 foreclosed houses, its records show, spending about $12.2 billion to reimburse lenders after the owners defaulted on government-backed loans. So far, HUD has been able to recover only about $5.5 billion by reselling them. It has about 38,000 homes still for sale.

The government’s houses are divided among a handful of agencies. Most came into federal hands when borrowers defaulted on government-backed mortgages; in some cases, the government foreclosed on loans it wrote, or took over foreclosed properties from private lenders. The list doesn’t include homes repossessed by federally chartered mortgage giants Fannie Mae and Freddie Mac.

Gov't losses big in home market - USATODAY.com

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May 1, 2009

Banks Still Calling Shots; Senate Pulls the Trigger

Irrational Exuberance via bighplotkinartcom-It was called the “Mortgage Cramdown Law” and it was supposed to help mortgage holders–consumers, struggling families, voters– deal with banks and stay in their homes.   It was a big deal.

How big? The chair of the bailout watchdog committee, Elizabeth Warren, quoted by  Reuters on Monday, insisted that “bankruptcy judges must be allowed to reduce home mortgage debt or the Obama administration’s housing rescue efforts could fail in the areas where they are most needed.

“If this were business property, a chapter 11, or a corporate chapter 7 proceeding, there would be no restriction to write down the secured debt to the value of the collateral,” she said. “The law recognizes everywhere the importance, in a financial crisis, of recognizing losses, taking the hit and moving on,” she said.

She said she could only attribute the existence of the exception to the political clout of the mortgage banking industry. If the cramdown proposals fail in Congress, “It means that the banks are still calling the shots.”

So, of course, our elected officials in the U.S. Senate sided with their key constituency on this crucial matter, as reported today by Bloomberg:

“The U.S. Senate rejected a measure that would let bankruptcy judges cut mortgage terms to help borrowers avoid foreclosure, a victory for banks and credit unions that said the legislation would increase loan costs.

The proposed “cram-down” amendment to a housing bill was defeated today in a 51-45 vote, with 12 Democrats among the 51 opponents. The measure needed 60 votes to pass over Republican objections. The House passed its version 234-191 on March 5. via Naked Capitalism

Here are the 12 Democrats who joined the 49  Republicans as bag men for the banksters, may the swine pox befall them all:Democrats voting against the measure were: Sens. Max Baucus (Mont.), Michael Bennet (Colo.), Robert Byrd (W.Va.), Byron Dorgan (N.D.), Tim Johnson (S.D.), Mary Landrieu (La.), Blanche Lincoln (Ark.), Ben Nelson (Neb.), Mark Pryor (Ark.), Jon Tester (Mont.), Tom Carper (Del.) and Specter.

And may the acursed swineflueza stricken these grinning fools, too:

Mortgage Bankers Celebrate Victory

You would think this year’s Mortgage Bankers Association annual meeting would be a rather solemn affair — given the criticism the industry has endured in recent months. But an ANP reporter attending the meeting found the bankers in a celebratory mood. The reason? A massive lobbying campaign against bankruptcy reform legislation known as “cram-down” appeared to be working.

April 23, 2009

The “D” Word Heard Around the World (Clue: It’s Not Daffodil)

by Mike Luckovich via TruthdigWhile Wall Street dicks around trying to figure out how to by give back the TARP money (so they can keep their bonuses) and manipulate Obama’s Public/Private Partnership plan to buy up toxic assets (so they can make an illicit killing for themselves on the taxpayer’s dime), global grownups are urging them to get a grip.  It’s no longer a matter of beating around the Bush; pros from the IMF to Harvard are now calling this economic clusterfuck by its right name—a Depression

Here’s how they’re using it in context:

Global recession worst since Depression, IMF says

The International Monetary Fund declared Wednesday, for what it said was "by far the deepest global recession since the Great Depression."

Even with many countries taking bold steps to turn things around, the global economy will shrink 1.3 percent this year, the IMF predicted in its dour forecast.

"We can be fairly confident that in 2010 or even 2011, economies will not be back to normal," said IMF chief economist Olivier Blanchard. "Which means that governments should today basically think at least about contingent plans for infrastructure spending. … Next year will be too late."

(read on)

Via AP

Harvard Economic Historian Says, "We’re in a depression."

Two big-time economic thinkers …  Jeff Madrick, a Senior Fellow at the New School’s Schwartz Center for Economic Policy Analysis, faced Niall Ferguson, Laurence A. Tisch Professor of History at Harvard University and William Ziegler Professor of Business Administration at Harvard Business School. Moderator Brian Lehrer, host of the Brian Lehrer Show, asked tough questions about the economic crisis.

Ferguson took the question first. “We’re not in a recession,” he said. “We’re in a depression. I would say it’s a slight depression, rather than a Great Depression, but we’re looking at five years of subprime growth.” . (read on)

via Recessionwire

Recession has features of a depression: California unemployment rate reaches 11.2%

Unemployment in California shot to 11.2% in March, the highest level since the state began keeping records. What’s more, the number of people out of work for almost a year rose by 9.4%, and has now doubled in the last 12 months.

An average of 211,000 Californians have been unemployed for more than 47 weeks over the last year, the state reported. These people now account for about 14% of California’s approximately 1.5 million jobless.

“This recession has features of a depression,” said Nelson Lichtenstein, a labor historian at UC Santa Barbara. “We get these very long-time people being out of work. They sort of disappear to a never-never land.”

  Los Angeles Times   via G.O.O.D.

April 21, 2009

Wall St. Pity Party: “Government wants us to be slaves!”

Greed_by_jane_vivian When the Ivy League held classes in Introductory Irony, Jon Stewart must have been the only dude who showed up. (Okay, Stewart and the guys who grew up to be The Daily Show’s smarty pants writing staff.)

“What a clown,” his frosh classmates might have said as they swarmed into Goldman-Sachs Capitalist Tool  Training Shed. By the time they emerged four years later wearing bespoke suits and fondling BlackBerries, if Stewart had quipped, “What are you supposed to be? The ’fighter pilots of capitalism’?” he would have been met with silence. Capitalist Tools won’t even get a joke unless it’s at somebody else’s expense.

You, however, are certain to laugh, cry, laugh more(maybe in a scary way mixed with uncontrollable sobbing) while reading Gabriel Sherman’s current article in New York Magazine,  The Wail of the 1%: The Rage of the Privileged Class As It Loses It’s Privileges.

Here’s a few randomly selected highlights to get your heart pumping, your eyes rolling and your irony meter spinning faster than the hands on the national debt clock:

There’s a vast woundedness now on Wall Street, which is hard to contemplate after the period of triumphalism so recently ended. In this conversation about money, there’s a lot to work through. Just months ago, the masses kept what anger they had to themselves, and the bankers were close-lipped about what they thought they were owed by society. There wasn’t much of a dialogue about the haves and have-nots and who was entitled to what. For the privileged, it was a lot more comfortable when things remained unspoken. Almost more than the loss of money, they are concerned with the loss of status and pride.

“I was at a cocktail party on Friday. Some guy said to me, ‘You work on Wall Street? How’s that working out for you?’ ” says the JPMorgan banker who was forced out in a recent round of layoffs. “There was a little bit of nastiness there.”

“Nastiness”? Really? Pretty thin skinned for someone who was in a business that took huge risks with other people’s money—like nurses’ pension funds, for instance, and your 401K–and then joked “IBG, YBG” “I’ll be gone. You’ll be gone,“ code for “We’ll collect our bonuses now and be long gone before anyone finds out the deal is no good.”


April 16, 2009

Texas Mad At Taxes, Wants to Split Up with US

Texas Thank god you're in When the Supreme Court picked George W. Bush as POTUS, many left-wingnuts threatened to move to Canada. Who knows whether any of them defected, but it sure would have been easier than trying to stop W.’s dismantling of this country through civil protest.  Those who tried that were mocked and vilified as unpatriotic, terrorist sympathizers who hated America.

Now that the guard has changed, it seems that what those right-wingnuts meant to say was that true American-loving patriots don’t leave their country, they secede, which is like leaving without the bother of actually having to go elsewhere or giving up the stuff you like about where you are. If you ever wondered how George W. arrived at his Me-centric world view, now you know.

So yesterday while some Americans across the country participated in Tea Party Tax Protests, despite the historically low Federal tax rates–

The CBO estimates that the average family forked over 9 percent of its earnings to the IRS in 2006, the most recent year for which information is available. The effective tax rate hit its all-time low in 2003 and has crept up only slightly since. (more…)

April 5, 2009

Wall St. Belly Flop Sinking Summer Fun

Filed under: Harbinger — Tags: , , , , , — debacled @ 11:40 pm


The economy has already wrecked havoc on leisure activity spending from Halloween through Spring Break, but summer  vacations may take the biggest hit of all.  From Disneyland to the baseball field, tag sales and casinos, here’s a preview of what  happens to simple pleasures in the wake of a Wall Street belly flop.

Theme park season pass prices way down, job applications way up  

Six Flags Great Adventure in New Jersey expected as many as 18,000 applications for just 4,100 positions. North Carolina’s Carowinds usually has 1,000 applications by this point, but this year, it already has about 3,400. Holiday World, a popular Indiana park, saw interest shoot from 767 applications last year to 1,797 over three job fairs this year.  (More)

Disney layoffs total 1,900

Of that total, 1,400 of the positions were in Central Florida. The company laid off 900 workers and eliminated 500 positions, the company said.  In California, 200 workers lost their jobs and the company eliminated 100 positions, Disney said.  The jobs were all executive, management and professional positions, the company said.(More)

Ticket sales down, worries up as baseball readies for Opening Day

Ticket pricing was cited as the fans’ No.1 concern in a recent Associated Press-Knowledge Networks poll. Last season, tickets

averaged $25.43, up 11.7 per cent from the previous year, but parking Luna_Park_by_d___band concessions drive the actual cost of attending a game much  higher.  "I used to think we were recession-proof," says commissioner Bud Selig. "I really did. This is different." (More)

Casinos cut the price of playing to keep gamblers coming

Up until a few months ago, the minimum blackjack table at the Seneca Niagara Casino in Niagara Falls had been $10…Now, Western New York’s biggest casino advertises that $5 blackjack tables are available 24 hours a day, seven days a week. …

Roulette had a minimum bet of $10, occasionally $5, per spin. But the game has come down in price, the minimum bet at Niagara Falls is $2, but at Fort Erie, it’s only $1. …

Many horse racing tracks have trimmed $2 minimums on some “exotic” bets that offer huge payoffs for tiny wagers. ..At Buffalo Raceway, for instance, you can play a Pick 4 (select the winners of four designated consecutive races) for just 50 cents. …  (More)

Recession Delivers Blow Even to Tag Sale

One paradox of the housing downturn, organizers like Ms. Fendelman said, was that the rising number of foreclosures was forcing people to relocate, but without a parallel rise in tag sales.

A possible explanation is that people who lose their homes must vacate quickly, and so throw out possessions rather than deal with time-consuming sales, said Eileen Daly of Port Jefferson on Long Island. Her seven-year-old business, Turn the Page Tag Sales, which generally yields $1,500 to $6,000 per sale, ran 20 sales in 2006 but only 4 last year, she said.

April 3, 2009

WTF? Mood Index up despite mounting job loss

The Bureau of Labor Statistics released March employment numbers today showing a loss of 663K jobs last month and bringing the total job loss since the beginning of this recession in Dec. ‘07 to 5.1 million.  via Calculated Risk

On Thursday, grim news from the Agriculture Department reported that 3.2 million people — one in every 10 Americans — received food stamps at latest count, marking the third time in five months that enrollment set a record.  via Boom2Bust

And yes while there have been a few headlines to warm Wall Street’s cockles:

Wall Street surges on accounting rule change, G20
Emerging recovery may give legs to market rally
Is Recession Nearing Bottom?

The spark is quickly extinguished by yet another ice-cold shower of gloom:

U.S. seen facing danger of 2nd recession next year

Massive stimulus spending and moves by the Federal Reserve to fuel economic activity is expected to jump-start the anemic U.S. economy in the last quarter of this year after it contracted 6.3 percent in fourth quarter of 2008.

But the Fed’s moves to boost the economy by slashing interest rates and buying up billions in government debt could have undesired consequences, The Conference Board, a private research group, said in the report.

“If the United States experiences a too-rapid recovery, there may be a risk of another recession in 2010,” said Bart van Ark, vice president and chief economist of The Conference Board.

So riddle me this: How does that news explain our collective whistling-through-a-graveyard good moods?  Unless, of course, we’ve individually decided to just enjoy ourselves…suspecting that it might be later than we think.

The Gallup Consumer Mood Index improved to -81 for the week ending March 29 from -91 for the week ending March 22. The Index has now improved for three consecutive weeks and is at the pre-financial-crisis level of early September 2008.

March 26, 2009

Tick Tock: New Watch Foretells Disaster

Filed under: Harbinger — Tags: , , , , — debacled @ 2:08 am

If only Swiss watchmaker Borgeaud had come up with with their disaster predicting watch a couple of years sooner and peddled it aggressively to Wall Street Derivatives Brokers–who were probably always in the market for watches in the $2000 to $250,000 range–Just think how much less disastrous the world might be today. Unfortunately we can’t claw back time any easier than AIG bonuses and, anyway,  who’d want to know when the next crash is coming?

Here’s the story via WalletPop

Borgeaud, a Swiss manufacturer of premium watches, has teamed with Indian astrologers to produce a fortune-telling watch. The company’s

“Panchang” line allegedly combines “the best of Swiss watch-making and one of the world’s oldest almanacs” to produce a timepiece that will tell users when disaster is poised to strike.
The silver-faced watch features what Ananova describes as a “bedpan-shaped” cutout. The space is generally blue, but occasionally will fill with a brown color, indicating that astral forces are poised to wreak havoc on one’s life. These looming terrors correspond to the “Rahu Kaal;” according to Indian Vedic astrology, these dark periods are inauspicious times in which to begin new undertakings.
Bedpan commentary aside, the watches are quite attractive. Beginning at $2,000, they can run up to $250,000, depending upon the accessories that customers choose. Given that the watchmaker is only producing 650 of them, it is reasonable to predict that the timepieces are going to increase in value. (read on)

If you can’t afford a Panchang watch, you can keep up with the Rahu Kaal and Vedic Astrology Stock Market predictions here:

March 23 –27 –  This week appears to have some potentially negative influences that may make it difficult for the market to add to recent gains. On Monday, the Sun is in a square aspect with Pluto.  This may indicate some tension and struggle surrounding large organizations and government.


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