Poor Us: The Great Depression 2.0

March 13, 2009

Generation P’wn3d: “The vast majority of baby boomers will be approaching retirement with little wealth outside of Social Security.”

Woodstock was a music festival, billed as An Aquarian Exposition, held at Max Yasgur’s 600 acre farm

Were you a citizen of the Woodstock Nation? If not you may belong to Generation P'wn3d.

“Let those poor go to the prisons and the Union workhouses, and if they would rather die, they had better do it, and decrease the surplus population.” Ebenezer Scrooge

If you know all the words to In A Gadda Da Vida and claim you can pick yourself out of the crowd in the photograph at left, then you are no doubt a member of the baby boom generation and the subject of the report recently published by the Center for Economic and Policy Research: ” Wealth of the baby boom cohort after the collapse of the housing bubble.  We’ll get back to you  in a moment.

If on the other hand you are familiar with the term p’wn3d, then you are more likely the offspring of the previously mentioned cohort, and consequently have even more to lose due to the current economic Apocalypse described in the report. You, I’m sorry to say, are Generation P’wn3d.  But before you start reading the bad news about the rest of your life, I want to offer two words that may offer a more optimistic alternative than simply surrendering to cruel, boomer-inflicted fate: Soylent Green.  I’m just saying, think about it.

Now, you’ve probably been wondering, as I have, what will become of us as a  consequence of the current mortgage-credit-industrial-job meltdown? Can you take the truth? If so, I encourage you to read the 25-page  report by David Rosnick and Dean Baker of the Center for Economic and Policy Research.  Whether you’re of the doomed boomer cohort or simply p’wn3d, it should more than satisfy your curiosity.  However, don’t get reckless: definitely do not read while operating heavy machinery or if you’re out of work or have a house that you’ve bought within, say, your current lifetime. Or if p’wn3d through absolutely no fault of your own. (And, really, get in on the Soylent Green franchise before Halliburton sets up shop.)

So, let’s cut right to the chase. This is the concluding summation:

“In short, as a result of the collapse of the housing bubble, the vast majority of baby boomers will be approaching retirement with little wealth outside of Social Security. While the younger baby boomers will still have some opportunities to accumulate wealth in the years until they retire, it is unlikely that the picture will be very different after a relatively small number of additional work years. This means that cutting back Social Security and Medicare from current levels will impose serious hardships on this age group.

Finally, these projections should make clear that homeownership is not always an effective way to accumulate wealth. Homeownership during a housing bubble was a route toward losing wealth, not accumulating it. While typical homeowners cannot be blamed for not recognizing the bubble, the economists and policy professionals who designed policies that pushed homeownership certainly can and should be blamed. It was possible to recognize a bubble at least as far back as 2002 based on the sharp divergence in house prices from their historic trend.The fact that so many economists and policy professionals failed to recognize and warn of this bubble had enormous consequences.  Unfortunately, the people who listened to these experts are likely to suffer the consequences of the experts’ failure, rather than the experts themselves.” (read on)

via Paul Kedrosky’s Infectious Greed


February 17, 2009

Uneasy reading: Bankers’ subprime motives in BusinessWeek

Filed under: Who knew? — Tags: , , , — debacled @ 7:15 am

Finance Sunday by mmystery via deviantart.comThe cover story of the Feb. 12 BusinessWeek is an expose of  how the banking industry is undermining efforts to keep people in their houses and how  politicians are lining their pockets with banks’ campaign contributions with one hand while shaking a sternly hypocritical finger at them with the other.

One memorable quote came after a gathering of top banking executives on Apr. 18, 2007.   Senator Chris Dodd (who, by the way, received more than nearly $6 million from the financial industry) was trying to get them to agree to adjust loan terms so borrowers would continue to make some payments, rather than stopping altogether.  The responses were all subprime, but this was one was the worst:

“Some from the industry denied a foreclosure problem existed, including Sandor E. Samuels, at the time chief legal officer of subprime giant Countrywide Financial. They vowed to continue selling loans with enticing introductory rates as well as those requiring minimal evidence of borrowers’ income. “We are going to keep making these loans until the last second they are legal,” Samuels later told a fellow participant. Read: How Banks Are Worsening the Foreclosure Crisis in BusinessWeek

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