Why the Worst is Yet to Come.

[GoingDown]

Very interesting about Wells Fargo.

A deceased relative of mine had a Wells Fargo Home mortgage and a Wells Fargo home equity line of credit. The house was upside down by about $200,000, so after he died, no one made any of the house payments. That was back in the summer of 2008. They still have not sold that house, to this very day.

[dakota112]

I agree with DMC for the most part. I'll even go out on the limb a little further. By the end of this year we will need martial law declared in many parts of the US to prevent the have nots from rioting and pillaging the haves, so great will have become the disparity and so wiped out will have become the great middle class of the USA. One must remember that for 2 generations, most americans have lived a pretty soft, nice life compared to Haiti or the average Chinese or Mexican. We are not used to living like that and there will be hard times for this country. The tough will make it. The weak will suffer and perish.

[Leopard]

Dead Man

You my man are spot on about corporate greed.. BOA or Bank Amigo is focused on the hispanic market and thats where thier biz model is targeted....

WE recently moved from a "Major southern city" to the sticks..wife recruited for a bigger gig, big raise & relo paid..market stable here in the sticks

we dodged a bullet, went from borderline 3rd world gutters fallin down 5 cars in the driveway/illegals home we let go for 50k less than we wanted, borrowed 45K from our 401( los 36K from that 401 in last QTR 08 but gained back 40K of it while movin into a 30% lager home on the ritzy sid e of this town in the sticks

If I could pay off my 25K of CC somehow wed be OK but BOA kicked up my rate to 30% after I got injured & surgery

screw em

thats how I found this forum

Corporate America baited all of us w rates they never intended to honor

why should we

Id have had a better chance w Tony So

kudos man

hope it all works ot for ya

youve done anyone who reads your post a big service exposin the shell game for what it is

Leopard

somewhere in nowhere AR

[JRScott]

I agree with DMC for the most part. I'll even go out on the limb a little further. By the end of this year we will need martial law declared in many parts of the US to prevent the have nots from rioting and pillaging the haves, so great will have become the disparity and so wiped out will have become the great middle class of the USA. One must remember that for 2 generations, most americans have lived a pretty soft, nice life compared to Haiti or the average Chinese or Mexican. We are not used to living like that and there will be hard times for this country. The tough will make it. The weak will suffer and perish.

Martial law on such a scale would pretty much mean the end of the United States.

What we have to learn is that even the least of us, is vastly more wealthy than the average citizen of most nations of the world. It does not matter that some are rich and others aren't, we have to stop believing we are owned something by virtue of birth. Abraham Lincoln once said "The poor man needs the rich man, that he has something to aspire to." We should not be seeking to take from the rich and give to the poor as a matter of law. Government is highly inefficient. It would be better to let the rich keep more and give to charities and other groups...yes some would chose not to do so but it would still be a more efficient system than we have today.

You are correct though that once the government goes broke it will be the weak who will suffer and possibly die due to lack of resources. The weak will be those who have long depended on government programs to provide them with food, clothing and shelter. It will be those who depend on the government for their health care. That's why it makes no sense to create another government entitlement program. It's not really to help the people, they know they can't afford it. It is an effort to buy votes and that's all, short term thinking at the expense of long term prosperity.

[MSbklawyer]

I'll even go out on the limb a little further. By the end of this year we will need martial law declared in many parts of the US to prevent the have nots from rioting and pillaging the haves . . .

I think that will probably come, but you see it by the end of the year? I was thinking a lot further down the road -- say ten or fifteen years.

[momisery]

Letting the wealthy keep their money and give to charity? That does not make sense. We gave them tax breaks to "build jobs" was Bush's idea. They have not done that in our country anyhow. What makes you think they give a tinkers darn about the poor? They see most of them as a tax write off. I work only with the very wealthy in my job with my bank. There are some that try to be compassiant, but when you really start talking to ALL of the ones I have talked to, it is "the poors fault" ... they never own up to people are certainly not born with the same gifts. Sometimes the best you can do is all you can do. Even the "trust fund babies" as we like to call them, could care less about the poor. They are too busy dumping the cash into their veins. Passing money on to them instead of creating jobs and hiring people for decent wages so they can make their own choices, of how much they can save, or spend makes no sense. Your creating fancy ghettos. When I put a few bucks in the bell ringers can or drop a feew bucks to a poor person on the street I am handing out normally about one half of what a make and hour. Do the wealth do that? Of course not, I see what they make, and when we do a loan I see their taxes... they are not handing out that much. Many feel like being on the board at some charity shows they are giving and that is enough. People need jobs, not charity.

[DeadManCrawling]

I, too, envision martial law. Perhaps not in a year, but in a few. I hope I am wrong, or at least too early. I hope MSBKLawyer is closer to the mark.

A sovereign default by the Federal Reserve would be enough of a shock to the system to result in martial law, I think. But my own suspicion is that this will be a long, slow process of decay and a gradual loss of standard of living, further jobs, homes, and income. The process will probably work its way up from the bottom in such a gradual fashion that some people will still deny it is happening, long after it is done.

The old adage is that you can boil a crab in small increments and they will happily splash about, enjoying it, right to the end. I do not know if that is literally true, but that is what I think may be occurring to the country right now.

If wrong, well, then I will be very happy for my son and his kids. If right, saying I told you so is of zero value. If there is a solution, we need to find it very shortly, in weeks or months, or it will be too late, if it's not already.

best,

-dmc

[backtoschool]

I do not think there will be rioting in the streets. (although the Obama administration has planned for them....)

I think our downward spiral will look more like what England looked like immediately after WWII. You will see a steady waning of influence on the world stage, and a choking of the domestic economy as more taxes are needed to fuel the government programs. The dollar will continue to weaken. There will not be any real growth prospects for the middle class, and it will be almost unheard of for the middle class to get out of the middle class and become wealthy. A middle class lifestyle will be very basic, with most people learning to make due with much less.

The very wealthy will quietly move their money out of the country.

There will be an increase in alcoholism, and other personal issues, as people get depressed at the lack of opportunity. I think that more drugs that opiate and calm people down and keep them docile will be available.

America became a power in the twentieth century due to its size, its burgeoning manufacturing base, and business-friendly tax environment. Those are all long gone. (except our size, but we now have competition size wise from China and India) We as a country have not replaced our manufacturing base with anything sustainable. There is still innovation here but it does not scale to the point where it turns into jobs for the middle class.

I see a future of quiet desperation, not of riots.

[Leopard]

Wow this is Disheartening

I look here n see the gloom n doom from the Obama ising of the US and wonder if its time to be one of those expats, livin on 20k.yr in Costa Rica.

We moved here from ATL to the stricks when wifey got a better gig..here thers lots of white rural poverty. but I dont see the systemic neighborhood decline I did in our ATL digs.. There we lost 50K on ur home just to get out of town & relo..just in the nick of time.. The old digs had turned rental w illegals next door.. It became a nightmare..loud maraichi noise in to the night..WE asked them to respect noise ordinances, they laughed in our face so we serially called police..soon as cops left back came the noise...MY wife made one ratioanlization after another about em..me I couldnt wit to haul ass n ouuta town leaving my home of 32 yrs..From others around the country as I desribed this..the rely was.."Its everywhere, thats whats in your future: deal w it..so we were luck to get e abtter gig & relo pkg n boogied...

now we hafte drive 50 mi to the city for a similar shoppin environment and amenities..boring but thats the tradeoff..

I know one thing if this social unrest begins..wont happen here, and as long as I have auto wpns & handguns & recall my miltary tng-I was a combat arms officer.. We'll survive by hook or crook..

With Obama nation..my chief concern is that the burgeoning 401K $$$ saved by folks who actually wish to eschew govt dependency remains a target for the left and its redistributive crap..beyond the normal tax hit envisioned by the programs concepts...Jesse jackson & CO have always had their eyes on that pile

and if I see the machinery for any confiscation or "leveling" goin on that would be code for me movin me and funds elsewhere

with that notion in mind then the question becomes..Where?

[JRScott]

Letting the wealthy keep their money and give to charity? That does not make sense. We gave them tax breaks to "build jobs" was Bush's idea. They have not done that in our country anyhow. What makes you think they give a tinkers darn about the poor? They see most of them as a tax write off. I work only with the very wealthy in my job with my bank. There are some that try to be compassiant, but when you really start talking to ALL of the ones I have talked to, it is "the poors fault" ... they never own up to people are certainly not born with the same gifts. Sometimes the best you can do is all you can do. Even the "trust fund babies" as we like to call them, could care less about the poor. They are too busy dumping the cash into their veins. Passing money on to them instead of creating jobs and hiring people for decent wages so they can make their own choices, of how much they can save, or spend makes no sense. Your creating fancy ghettos. When I put a few bucks in the bell ringers can or drop a feew bucks to a poor person on the street I am handing out normally about one half of what a make and hour. Do the wealth do that? Of course not, I see what they make, and when we do a loan I see their taxes... they are not handing out that much. Many feel like being on the board at some charity shows they are giving and that is enough. People need jobs, not charity.

The government has promised more than it can pay out. It knows that. You could take everything from every single American both private and corporate and you could not meet the obligations of Social Security, Medicare and Medicaid into the future. They've promised more than they can possibly ever do. The same with most of the western European nations. Its really a recipe for disaster.

The government bureaucracy is highly inefficient. Look at the stimulus package with money going to zip codes that don't exist and congressional districts that don't exist. Waste is extremely high much higher than would be tolerated in any private industry corporation. Government also can't fix itself.

The federal government could be fixed if the states would reclaim their usurped power and just tell the fed where to go. However they've not done that yet.

What we should do is treat everyone the same regardless of age, gender, etc much like what most churches ask for in a 10% tithe of its worshippers. We should charge the same percentage of income for all people in our country regardless of how much or how little they make, how old or disabled they are, how poor or how rich. (Though personally I think we should eliminate the income tax and introduce import tariffs again...). I think the lack of skin in the game is the cause of a lot of corruption in Washington DC. Folks without something in the game aren't paying attention.

Some of the wealthy are very generous, much more than you might realize, for example Jon Huntsman. Angelina Jolie and Brad Pitt are also very generous as is Oprah and many celebrities. Are they the norm, no not really. Just like most regular churchgoers fall short of the 10% tithe Christian churches generally ask the faithful to pay.

[momisery]

Nothing new, we have not paid for the civil war, WWI or WWII yet, and everyone acts like this is the first time we have been in debt. Debt is not the problem, or has not been in the past so why is it now? Simple, because working class people have lost their confidence that there is a way for them to really live the American dream. We are taxed to death, true enough, but we also are charged to the hilt is the real problem. If we can not make as much in wages, then they simply can not charge as much in prices. Credit has given us nothing but misery and it will not work. You simply can not jack up the prices of items and expect people who's wages have been losing value for decades now to be able to buy the items. Business profits were at a all time high, so were stocks and wages have been stagnet even though the "good times". We need to pay people, don't expect them to live off of credit. And as for the "huge house" theroy.. I grew up in a house that was 2800 sq ft... and old farm house and that is not counting the basement and walk up attic. House are not bigger, they are not even better. BAck then they plastered the walls a long time consuming job. We had a basement, hardwood floors, and the trims was so pretty. The front door had stained glass in it, and the back door a huge oval of hand cut glass. We had several bedrooms, a sewing room, living room, dining room, kitchen, only one bath but and outhouse too. People got smaller homes with basements in the midwest after the war in some cases, by many of those older homes have tons of square footage. I do not agree that people are wasteful, or expect too much. Nor do I agree that debt is the whole problem, our debt grew under Bush by a huge amount and I did not hear a ton of ranting about that. Our debt is huge because our nation is sinking because those at the top export our jobs and keep slapping us with high prices because we have credit. We pay more for our meds, for our clothes, for everything than they do in other countries except for gas... the one thing that may have made sense, gas we have cheaply. If decades ago they would have raised gas people would be using mass transit. Instead they listened to General Bull moose, and Big oil and continued keep the lid on the costs instead of building mass transit. They have stuck it to us on every thing else, and now we don't have jobs so they can't collect taxes so the debt goes up, our debt goes up because we buy goods made in china while our people are laid off collecting unemployment. Yet we blame it on high wages or obama. Place the blame where it belongs, our governments relationship with big business is where the blame really belongs I think.

[onwards]

At any rate, it seems we all know there is major trouble coming, but no one knows what to do.

What do you mean, don't know what to do?

We've known what to do all along, it's just that there is no political will to do it.

FORCE THE BANKS TO WRITE DOWN ASSETS TO MARKET VALUE - that includes writing down negative equity loans in EVERY SEGMENT, including residential and commercial real estate, as well as everywhere else. NO EXCEPTION.

Then LET THOSE BANKS THAT CANNOT HANDLE THEIR ACTUAL REVISED BALANCE SHEETS FAIL. Right now. Tomorrow. LET THEM FAIL. No government support, no bailout, no nothing. Shareholders get wiped out, no matter who they are. Employees in banks lose jobs. All the stink and ugly that gets attached to it. The dollar falls by 50% against the Euro.

BUT.

Think about the day after. Confidence is restored, because at least now everyone KNOWS where things stand. Recovery - real recovery - can being. People are no longer stressed about what will happen to them 3 years down the road when their loan resets, or spend all their time wondering if they should default (strategically or not), fretting and wasting all this energy that would otherwise be turned into being productive.

It will mean a few hard years. It will mean a reshaping of the entire landscape. It will mean waking up to no Band of America, no Citibank, no Morgan Stanley, possibly no Goldman. It will mean focusing internally, stopping wars even if they are not won yet so that resources can be preserved, becoming community-oriented again, probably a rapid increase of bartering as a form of exchange for a little while. It will mean credit will take a LONG time to flow again, but somehow, I think people will find ways to help each other. I see it all around me anyway, in little ways, like when I hired someone just before christmas to do some things for me that I could and normally would do myself simply because she was desperate and I'm not and it was nice to get them done for me.

But it will also mean we'll be back on our feet in just a few years, without making our kids into the indentured slaves they will otherwise become. And it will stop this insanity. Just get it over with. GET IT OVER WITH DAMMIT!

[onwards]

Ok, so let's play this thing out...

Foreclosures go nuts this year and Real Estate values reset to crazy-low numbers. Banks lose/write off gazillions.

For those of us with 20% cash to put down on a place, will a bank be able to lend me the money?

No, but your 20% would easily become 100%. You will pay cash.

[onwards]

I totally agree that the government will simply devalue the currency to remove the debt. This is already happening, the plummeting value of the dollar is no accident. It is our way of eliminating our debt to China.

Agreed. The US is quietly interested in and assisting the Euro to becoming the reserve currency, or at least an alternate one.

I believe that E50K which are today worth about $73K will be worth about $150K two years down the road. Possibly more.

[Leopard]

Onward,

hey mon..I'm 61 but since I can take classes for fre at the U where my wife is employed I do..Toady after class I chatted w my history prof about just this specific mess you profile..

He looked gloomy and laid out a scenario EXACTLY like youve done..2 different guys maybe 1000 miles apart..I guess its that intuitively obviuos..

He said and I quote"

"I dont want to seem all doom n gloom-when I mentioned the shadow inventory and toxic assets-but I think we're in for a lost decade, just like Japan in the 90s..when the banks and others who hold bad debt really....LOSE -ie suffer actual balance sheet losses..w all the consequences...Then he looked around at all the younger students..hes about 47.. the 2 of us older w our careers half over, mine behind me w assets -hopefully to retire on..as if to say..but these kids whats the prospects for thier careers n jobs,,

are we headed for a lost generation.?.. and all for the likes of Barney Franks social engineering- the liberal home entitlement w no credentials myth,,combined w WALL ST finance MBA BS CDO engineered nonsense to fund it.....

This pisses me off about ME..being suckered into CC debt I didnt need, even though I had lots of other assests to use....and my choices.. and what iut all means in the aggregate... and even with that hell my wife n I could still afford 80% of payin our way and chose roll the dice for the other 20

Id just like to hold onto the assets we have worked for and arttained and launch our 15YO into something so that he wont be livin on a street corner.. Our 2 adult kids are already well into carrers unaffected by all this BS..its just him on the front end and Us near retirement thats the main concern....

social collapse??? are you inferring along those lines

Thanks for havin the stones to lay it all out for us