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Postby WalkerARCHITECTS » Mon Mar 19, 2012 6:53 pm


Be careful what you believe because the way it is said may be only the mirror image of the truth, a reflection with only the appearance of reality. A case in point is an article written by The Fiscal Times. This article asserts that too much debt has caused the great recession. That is the simplest explanation of course.

First-time homebuyers bought houses they could not afford; but qualified for?

Too many homeowners used their bubble-inflated home equity like a piggybank; which means now that the equity has been removed by the swindle on Wall Street we will now blame the homeowner for believing that he had some equity in his home after decades of paying on a mortgage? Excuse me isn’t the home owner supposed to have equity in his home after paying on the mortgage for years? Really … Is it just me or is this ridiculous reinvention of the lender borrower relationship and the rules that were created by the lender and not some delusion on the part of the homeowner?

Too many consumers maxed out on their credit cards, ok… but isn’t that just a strange way of saying that unemployment destroyed American Households by the millions and to survive they used credit cards?


The business and financial sectors engaged in their own debt binges during the 2000s. Really, didn’t they actually borrow based upon the actual value of their assets at that time? Was not the error actually created by a securities scam and not reckless indulgence by big business? Did too many companies use debt to buy back stock? Isn’t that illegal? Did too many banks make faulty loans knowing that unemployment would trigger massive numbers of foreclosures?
Did too many hedge funds use other peoples’ money to speculate in derivatives tied to collateralized debt obligations; and too many private equity firms borrowed to buy out companies? HELL YES.

It does matter what caused so many borrowers to default. Unemployment did that not bad dishonest people who wanted to buy a home who lied to get loans they could not afford. It was not sub-prime rate loans that went bad but both fixed rate loans and a smaller number of sub-prime loans. Falling wages leave employees stranded in debt. Unemployment leaves employees stranded in debt. There is no fault to any employee who lost their job and consequently can’t pay the mortgage the fault is engineered in the system that holds the base assumption that everyone can rapidly migrate to another job. The systems assumptions proved to be false because of the systems management error.

When enough loans go bad, are the excesses of the borrowers exposed or the management failure of the lending institutions? Job loss on a massive scale clearly was not anticipated by the lenders and certainly could not have been foreseen by the workers. The truth is the financial wizards of Wall Street gave birth to a new type of security, sold it recklessly and concealed the fact that the brain child was still born, dead on arrival, devoid of substance and shortchanged of any manner of design intelligence. So the disaster results in the banks halting the traditional lending, and people and businesses reached the end of their credit rope. The bubble did not burst it was overinflated deliberately and it was popped by those who first concealed their stupidity, then insured themselves against their own stupidity so they would profit from it and then after the fact disclosed the seriousness of the over inflation they engineered. They designed the disease inoculated themselves then made certain that the contagion would spread to every household in the united States.
The only path forward is to stop speculating recklessly and protecting the wealthy who engage in such practice. Americans did not over spend, the rules in place did not allow that. This lie that the economic disaster was caused by ordinary Americans who were dependent on their jobs for credit did the reckless destructive deed. What a pile of Bull dung! Start paying off old bills and save they say smugly, their pocket bulging with your money. So the people are forced by these reckless manipulators into a process known as *deleveraging, which historical experience suggests is always longest and most painful after a debt-fueled financial crisis, where those guilty of the reckless activity are unscathed and the people absorb the impact!

The U.S. is now in its fourth year of *deleveraging in the wake of the 2007-08 credit collapse. That means that working class people have lost all the equity in their homes and are being blamed for the stupidity of those actually responsible.

Now there are growing signs that the process has reached the point where consumers can start spending again. It has nothing to do with “deleveraging and everything to do with the increase in jobs. Reducing federal spending had NOTHING to do with ANYTHING! The new report from the McKinsey Global Institute says U.S. consumers are unlikely to assume their historic posture as spender of last resort for the global economy,( until the wages rise again). Jobs with good family supporting wages rule the economy. The inverted logic of pseudo financial experts and money speak babble, fails to capture what every American worker knows. The men at the top cheated us and made more money while the rest of us lost most of what we had earned with years of labor.

“American consumers probably won’t be as powerful an engine of global growth as they were before the crisis,” according to the report, Debt and deleveraging: Uneven progress on the path to growth.

Satanic distortion in the manner in which money speak is engaged blames the working class for the consequences of processes and decisions they have never owned. “One reason is that they will no longer have easy access to the equity in their homes to use for consumption.” Because in most cases it is gone. This is the voice of Satanic distortion who fails to tell us the plain truth, they stole our money, and we can’t do anything about it, and don’t forget the evil laugh ( HA HA HA it is all mine…all mine! The top 400 have more money than the bottom 150 million Americans. That is the work of a satanic agent, and make no mistake about it, that is the real evil in our midst, her name is GREED!

“The report estimated that home equity loans and cash-out refinancing increased consumer spending by a percentage point to 3 percent growth a year during the housing bubble years. But with that source of debt financing gone, retailers are more likely to see 2 percent annual growth over the next few years, which is about where it has been in recent months.” According to the article.

That finding was echoed in the latest report from chief economist Diane Swonk of Mesirow Financial, who is well known among right wing conservatives, took a close look at the troubled housing sector. Blaming workers for not having money that is never embodied in the wages they are paid is not good economic analysis. Even with a projected 18 percent increase in housing starts in 2012 and a 10.7 percent uptick in existing home sales, home prices nationwide are expected to fall another 2 to 4 percent this year as the deleveraging process ( read that as ripping off the working class) continues. Raise the wages and you instantly solve this problem.

The workforce is still suffering from 8 percent-plus unemployment and deteriorated credit ratings, and banks remain cautious about underwriting mortgages, she noted. All of this damage was caused by economic forcing and not by dishonest people. The problem is persistent in part because of the false idea that the problem is spending not unemployment and not the destruction of the equity you used to have in your home. The lingering impact of the Great Recession is turning America into a “renter nation,” and that will have major implications for the rest of the economy over the next few years. It is more than deliberate, where the working class was forced to pay for the mistakes of the wealthy few.

“Renters and investors in rental properties do not tend to spend as much on upgrades, given the transient nature of renting,” she wrote. “It’s hard to justify big purchases of furniture and window treatments when you don’t know how long you will be living in a space.” This is all caused by wages lower than is reasonable in the context of the expectations she expresses herself. Raise the wages you instantly solve this problem, or is it driven by an unbelievably low paid force of labor over seas? BOTH!

*DELEVRAGING: means that working class people liquidate the economic burden by losing all the equity (wealth) they had accumulated in their homes and are forced to accept lower wages.

Still, the debt binge of the 2000s was a worldwide phenomenon, and the U.S. is way ahead of other advanced industrial countries in *deleveraging its economy, the McKinsey report noted. U.S. households have reduced their debt-to-disposable-income ratio by 15 percentage points to about 110 percent, which is a greater reduction than any of the ten largest industrial economies over the last four years. “At this rate, they could reach sustainable debt levels in two years or so,” the report noted.
There are also signs consumers’ urge to spend is resuscitating. The latest Federal Reserve Board data showed that U.S. households upped their total debt by 0.3 percent in the fourth quarter of 2011, the first time since the second quarter of 2008 that total household debt increased. The $150 billion in reduced mortgage debt – *deleveraging – was more than offset by the $170 billion in new consumer credit. Despite the increased debt, households’ debt-to-income ratio still went down because total income rose by an even greater percentage, not surprising given the improving employment picture.
But some economists see structural limits to how far *deleveraging can drive the economy, especially since so much of the reduced mortgage debt is due to banks foreclosing on properties and writing off loans, not people paying off debts.

But some economists see structural limits to how far *deleveraging can drive the economy, especially since so much of the reduced mortgage debt is due to banks foreclosing on properties and writing off loans, not people paying off debts. Obviously having sucked the lemon dry they are now preparing to squeeze the wages some more. They will then blame high wages as the reason for the slow growth of the economy.

But some see the truth emerging as the economic diatribe become increasingly transparent.

Thomas Palley, a labor movement adviser and associate at the New America Foundation, warns that only policies that promote full employment and lift household income can restore robust spending and growth. How could anything be so obvious and yet not be the leading sentence by those in the money business. The truth is hard to grasp among people who take the concept of *deleveraging as something other than the ruthless exploitation that it is. Reducing debt may reduce the numerator of the debt-to-income ratio, but it is less effective when the income denominator stagnates. Over the past year we have written here in this forum to this issue.

“Only another engine, the income distribution piece, will truly make this recovery self-sustaining,” said Palley, whose new book is called “From Financial Crisis to Stagnation.” Speaking at an Atlantic Magazine forum on Wednesday, he pointed out that “we’ve broken the link between productivity growth and wage growth. We’re heading for stagnation unless we address wage stagnation.” In the end the forces of GREED leave their emperors naked, every scam ends that way.
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Postby Richard Haut » Sat Mar 24, 2012 4:16 am

Quite right - there is little point in blaming people for not getting into the lifeboats soon enough when the Captain and crew deceived the passengers by not telling them that the ship was sinking - sinking because it had been sabotaged by the Captain and crew themselves.

Many people would have been more financially cautious sooner if they had not been deceived.

My own view is that it was a serious error to bail-out failed banks. It was, again in my view, a misuse of power by some politicians since their obligations are to those who invested in poorly (or in some cases improperly) run financial institutions.

The long-running danger of this crisis is that it has damaged the confidence of ordinary people not only in the banks, but in those responsible for regulating them and in the press.

Many politicians and those in the media have sided with and acted as protectors and mouth-pieces for dubious financial institutions.

This is far more than a downturn or a debt-crisis. What will happen ? The market will adjust - and that adjustment will mean, is already meaning, that people are far poorer than they thought that they were. So they will adjust their lives. Tough certainly, but many will cope. They will slash their overheads, adjust their earning power to the new situation, work harder to rebuild.

What the thieves and their hired-liars forget is that their little secret is out in the open. I am fascinated that habitual liars so often presume that anybody will pick through their drivel in case some of it happens to be true. People are becoming very selective in which newspapers they read and I'll let you into a little secret: if the newspaper is seen as lying, then its advertisers risk not being trusted either. The market adjusts.

I find work for architects - real, paid work. There are those who sit and wait to be given work - good luck, they are going to need it. I help those who want to get off their backsides and get work, who are concerned about what they can offer, not sniffing at what they are offered like a bored restaurant-critic.

It is those who make the effort who are the future of architecture.

The market adjusts.

Richard Haut
millennium club
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Postby WalkerARCHITECTS » Fri Apr 06, 2012 1:45 pm

As skilled and talented as we are, as a people, which is actually the most important thing we have, it is also now pretty much the only thing we have.

The working class has never been this broke. Still we manage it as best we can. We fill the tank with gas and drive cars to get to a job. It is the logic of the automobile that destroyed human scale. The village scale is gone now and every major city has gigantism. Our cities came to form in the pattern of, the automobile all now quite dependent upon Big Oil. The price of gas, now manipulated by Wall Street speculators is rising.

It is everywhere this manipulation by the wealthy few. Everything appears to be contrived to suppress wages and exploit the masses. Not just here but in Europe as well.

The economy here in the US has largely destroyed the equity in our homes and there is no residual wealth for most of us to recover our businesses with. We had money we were not reckless with it, we saved as much as we could, but it was not available in sufficient quantities to offset the burden of a paralyzed industry.

Small business is left only with knowledge, skill and ability, regarding money there is not much of it, either in the hands of the small business or the majority of our clients. We will rise again, but there will be fewer of us, big business is already infilling the small builder market place with venture capital funded start-ups, in the void where small business family owned companies once dominated. The world wears a new face. Everywhere corporations are taking control of the market and little is left for the working class in the realm of dignity, pride or independence.

It is clear that we simply do not have enough opportunity as Architects here in the USA for so many small businesses. To be in this business competing with corporate funded enterprises is a new game the strategy of wealth is evolving in the pattern of Walmart. We fight over the left overs. In every way our capacity to rise is limited to our resourcefulness. Money is simply not part of that equation. So we still get up and still find a spot of work to pay the bills, just barely enough, lately. It has been four years of steady decline and now just the glimmer of hope.

Self employed people have tremendous abilities largely squandered lately with no market viable to employ it. It is not as if we can't get projects we just can't get paid very well to do them. Everything that you might expect in a market domain that is no longer possible for small business to fill, is being gobbled up by the corporations.

To most of us now going back to work for the MAN seems the only way to survive. The wages there are shrinking as exploitation is empowered at this time and place. There appears in the wake of the consequences and the current state of small business, to empower but one conclusion, that this economic disaster, largely contrived by a few, was both an accident driven by error, and also an opportunity to expand market share, in an area that small business once dominated.

Architects have to rethink the industry here, and adapt. This is new ground and new players will dominate it. The best talent in the world is now available for hire. Those with the cash will soon dominate this service industry. The future exists with a new promise, only for a few.
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