How Equity Became A Household Word
Readers suggested a topic on debt and lifestyle. “Given that incomes for most quartiles has been flat in real terms over the past few decades, why have people borrowed and then spent as if their incomes were growing? We wouldn’t be in as big a mess as we are now if everybody simply lived within their means. Instead a very large proportion of the US has borrowed and lived beyond their means. Yes, there are always some people who will borrow their way to the poor house. But ISTM that ever greater levels of indebtedness have become the norm rather than the exception.”
“Is credit to easily available? Are rates too low? Is the boomer cohort at a spending, rather than saving age? Have advertisements suddenly become more effective at making people want things? All else being equal, in the face of flat real wages one would anticipate flat real spending, not greater spending funded by greater debt. There’s something else in the equation, and I’m not sure what it is.”
A reply, “I wonder if there are historical stats for loan (mortgage?) applications vs those that are granted? It’d be interesting to see if there has been an increase in applications in percentage terms. Of course that doesn’t control for people moving houses more frequently (thus more mortgages), and for increased size of mortgages due to banks being willing to lend more.”
One said, “I think people just didn’t understand the relationship between the interest rate, the length of the loan and the monthly payment. Using a very simple case, if the mortgage pusher says you can refi your mortgage, have a lower payment and get $20,000 cash, are most people going to realize that they have added 15 years to their mortgage pay off date and handed a $10,000 fee to the bank? Maybe, but maybe not.”
“And this is even before you ask if they realized that they converted their fixed rate fully amortizing loan to an adjustable rate, negative amortization loan with a 6 month teaser rate.”
Another added, “The easy availability of credit at low rates allowed people to achieve the lifestyle that the media told them they deserved. The only thing I’d add is that the above reasons produced an attitude change; that might be the something else in the equation. So many people seem to think that having a load of debt is natural without understanding the true cost of it.”
“One thing I noted was how ‘equity’ became a household word. The old system was you bought a house and enjoyed seeing the slow reduction in the mortgage balance; it was debt focused. The new system was to buy a house and brag to everyone how quickly your equity was building. It didn’t even matter if the debt was shrinking as long as your equity was going up. The switch from debt focus to equity focus was, in my mind, a brilliantly retarded move.”
One pointed out, “didn’t they used to teach basic finances in Home Economics back in the day? I did take a business ‘elective’ in high school which taught about budgeting, types and cost of insurance, investments, etc. But it was an elective.”
“Perhaps folks are simply lacking a basic education in financial matters that happened to be part of the core curriculum ‘back in the day’?”
And finally, “My guess is that the average person was more dependent on the bank to determine what they could handle than the average HBB participant might have originally thought. Combine a rah-rah atmosphere where it looks like everybody is getting rich and living the good life and have the bankers cut the brake lines and color it all with the assumption that housing always goes up and here we are.”
The Virginian Pilot. “Nearly one in four homes with a mortgage in Hampton Roads - 24 percent - is worth less than what is owed on the loan, according to CoreLogic. The firm’s quarterly report said 22,967 more mortgages in the region will be underwater if home prices decline 5 percent from current levels. ‘A lot of people who want to move up, they’re not going to move up until they sell their existing homes,’ said Vinod Agarwal, an economist at Old Dominion University. ‘So that reduces the number of buyers in the market.’”
“Across the country, the number fell slightly to 10.9 million, down from 11.1 million at the end of 2010, the firm reported. That represents about 22.7 percent of all residential properties with a mortgage nationwide. The highest concentration of underwater loans was in Nevada at 63 percent.”
From KPTV Portland. “Home prices in the biggest metro areas across the country have reached their lowest level since 2002, according to a price index. And 12 housing markets, including Portland, are seeing home prices at the lowest level since 2006. ‘Basically, you have a lot more people who were mortgaged right up to the hilt. And then when the price decline came, they were under water. The estimate for Oregon is that a third of our homeowners right now are under water,’ says Portland State University professor Gerry Mildner.”
From CNN Money. “The economy is still struggling. And Americans are in for a long and painful adjustment period. One major reason: their own household debt. The bubble economy that led to the recession was fueled by American consumers, businesses and banks taking on too much debt, particularly in real estate, during the decade before the crisis.”
“Total private sector debt — held by consumers and businesses combined — peaked at 283% of gross domestic product in early 2008 — nearly three times the size of the entire economy.”
“The good news is that since the recession, consumers have been paying off debt and saving more. Private debt fell to 234% by the end of last year, though much of that decline resulted from bad mortgage debt shifting from banks to the government through the bailout of mortgage finance giants Fannie Mae and Freddie Mac, said Carmen Reinhart, a senior fellow at the Peterson Institute for International Economics and a leading expert on financial crises.”
“But even with some modest improvement in savings in recent years, households still can’t afford the current debt levels, which are well above the average disposable income. ‘At least households are being prudent and rational and bringing the debt down. But I worry we’ll see it leveling off higher than I think it should,’ said David Wyss, a visiting fellow at Brown University and former chief economist at Standard & Poor’s.”
“Stephen Roach, the chair of Morgan Stanley Asia, wrote a recent note suggesting that American consumers were turning into ‘zombie consumers,’ greatly because ‘burdened with underwater mortgages, excessive debt, and subpar saving, U.S. consumers are stretched as never before.’”
“And the process of unwinding those huge debt loads is slow going. Despite Americans paying down debt, saving more of their paychecks, and shedding some of their debt through bankruptcy and foreclosure, Reinhart estimates that the amount of consumer debt alone has declined to only about 92% of the gross domestic product.”
“That’s down from only 98% at its high point at the end of 2007 — a peak that shot up from less than 70% in 1999. ‘The deleveraging process doesn’t really get underway quickly,’ Reinhart said.”
From WCTV. “In Kissimmee, Florida the mortgage crisis hit Areliz Martinez-Rodriguez. Martinez-Rodriguez says, ‘I purchased the house for 255 and right now, the house is for 87 thousand dollars.’ The biggest investment of her life withering away in a market chilled by one of the nation’s highest rates of foreclosure. ‘I’m stressed out because I need a house for my kids and for me and I’m trying to work with the bank and the bank doesn’t want to work with me.’”
“When Donna Thomas’ real estate company of 40 years went under during the mortgage crisis, she lost everything she was saving for retirement. Thomas says, ‘We basically had to give up our regular insurance and go to an HMO and we’ve had to cut back on everything.’”
“Given that incomes for most quartiles has been flat in real terms over the past few decades, why have people borrowed and then spent as if their incomes were growing? ”
Because “everyone” does it? Except me
The higher the income the more unstable your income. The higher the disparity of income between the average US citizen and the average citizen of another country, well, …you cannot fight American stupidity. You only laugh. And there are many who want to lock in shoddy union-built products by making better built foreign products hard to own. Case in point: Hyundai.
Case in point: Hyundai.
I keep hearing that. I went to the GM thing that have every years in city stadium parking lots where you can drive all their cars and a bunch of competitor cars this year. Drove a Civic and a Hyundai equivalent back to back. Was expecting to hardly tell the difference, but there was still a huge difference IMO. So I guess I’m a little skeptical now of everybody saying Hyundai has gotten so close to Honda.
Hyundai wouldn’t exist, were it not for massive amounts of government support and subsidies by the South Korean government for export-oriented manufacturers.
It is an excellent strategy, producing jobs which contribute funds to social programs and at the same time reduce the burdens on same. When we buy imported cars, we support their social programs and increase the burden on ours. Brilliant. Trade is global, unemployment is local.
“Trade is global, unemployment is local.”
Ding, ding, ding!
And try to buy a non Korean car in Korea. Good luck with that/
My last vehicles I owned in the USA were a Ford, a Dodge, a Ford and a Buick.
Before those, Toyota and Honda.
The American stuff was just as good as the Japanese stuff and better for the USA.
The American stuff was just as good as the Japanese stuff and better for the USA.
Different people are picky about different things. I think the American cars get just as good of gas mileage for an equal size car, and you can make them last just as long. IMO the interiors of American cars are just weird since about 1990 or so…and frequently less comfortable for small/normal size people. And as far as my personal tastes go, they don’t usually have the option combinations I want (I’m a big fan of 4dr high-powered AWD).
Keep in mind that the BRAND determines whose stockholders get dividends, not what country the workers are in. I’ve owned a Mercury built in Cologne, Germany, a Volvo built in Ghent, Belgium, and a BMW built in Spartanburg USA.
“IMO the interiors of American cars are just weird since about 1990 or so…”
Funny, that’s how I would describe Japanese cars. For the most part their styling has become weird and ugly IMHO (especially Toyota)
My honda is much mor reliable than both the fords I owned.
Of course that doesn’t control for people moving houses more frequently (thus more mortgages), and for increased size of mortgages due to banks being willing to lend more.”
Moving houses is hard work! They are very heavy!
I paid off student loans equal to a bit less than my starting salary in just under three years when I graduated from law school. Interest rates were much higher then, but not high in comparison with what a person with average credit would pay on a “good deal” for a credit card today. I had a few at 8% and bunch more that were higher. 12.75% sticks in my mind, but I can’t be sure.
It was HARD. Not impossible. I still went on cheap vacations. Still went out. Still kept up my wardrobe. But I had to make choices. If I wanted to see a show, I took the subway and didn’t eat dinner out. If I wanted to have dinner out with friends, I skipped “going out” later. If I wanted to be hanging out until the wee hours, I probably met people there later in the evening. I got my hair cut by a very talented man (friend of a friend) in his kitchen for a lot less than it cost to get it done by the same man in a salon with a more comfortable chair. My apartment was miniscule and the furniture was IKEA and hand-me-downs. It was all about choices. This, not that. That, but not this. I never assumed that because my salary was higher than my dad’s that I somehow deserved to live better than my parents did.
And I had plenty of friends who didn’t do what I did. I wasn’t surrounded by a micro-culture of responsible spenders. Some bought tons of clothes. Some purses. Some jewelry. Some very expensive vacations. Some used the early versions of doggy day care at outrageous prices. Some did the whole Hamptons share every summer. But I didn’t.
I wish I knew exactly what it was that made those choices instinctive to me. I’m not sure. My suspicion is that it was as simple as being scared of debt. I saw it as a trap, like being an indentured servant to the banks. I wanted that part of my life to be OVER. That is really the only thing I can think of, other than not being quite as interested in clothes, jewelry, the Hamptons, etc. as they were.
The paperwork was also a bit of a motivating factor as it was quite burdensome at the time, but no one else seemed to mind it as much as I did.
Were your parents the same age as those of your contemporaries? At some level I suspect that the fact that my parent’s childhood spanned the depression and WWII meant that they were pretty debt averse. But that’s probably a mistake, because I know people who had working class upbringings who tend to acquire lots o’ stuff and the debt to go with it to “make up” for their perceived childhood privation.
If anything my parents were a bit younger than everyone else’s. My parents are just barely pre-baby boom. Their parents went through the GD, but they didn’t. My maternal grandparents came out of that with fairly hardy can-do attitudes. My paternal grandmother always thought the world owed her something because she had once had a lot and lost it.
If anything, the fear came out of being just old enough to remember it when my parents were house poor - not completely broke, but the mortgage at 3 times salary was a push even on a VA loan. That lasted until I was about 8, right after my dad got into high tech. After the switch there were real raises so we stopped depending on grandma and grandpa to supplement the food budget by having us over for dinner 2 to 3 times a week. I remember when they could finally afford to keep a second car (our home town had no public busses), when they could afford to let us go to summer camp instead of just community swimming lessons and the book club at the library.
And even after the worst years, there were choices. My mother saved up for months out of the food budget for special celebration meals. We went on one vacation that was more than a long weekend my entire childhood. I worked and the money all went to the college fund, not for shopping. It wasn’t even a question. So I did have the example growing up that you pick your luxuries and you don’t get to pick all of them, but I assumed lots of the people around me had had those examples. They weren’t all rich kids. But as far as I know I was the only one to accelerate the student loan pay off that much.
I grew up in a “debt is a terrible thing” household. I remember seeing my dad drive off to work years ago (Chief Counsel in a high-tech co. in MA) in a beat-up old Chevette.
Bravo! I feel the same way. Hopefully, it will pan out.
“though much” (ALL) “of that decline resulted from bad mortgage debt shifting from banks to the government through the bailout of mortgage finance giants Fannie Mae and Freddie Mac”
American consumers were turning into ‘zombie consumers,’ greatly because ‘burdened with underwater mortgages, excessive debt, and subpar saving, U.S. consumers are stretched as never before.’”
When you figure National debt at 100% of GDP and private and business debt at 285% of GDP and then figure in States and Municipalities, even if you forget about pension obligations at 400% of GDP, this does not end well for us?
My question is Inflation or default? I have heard the arguments on both sides and while I personally favor inflation over deflation and default, the consensus seems to be to prefer default, particularly among those holding pensions or large cash savings, but I cannot help but wonder if either will not be taken at some point in the default scenario, since it is their money being defaulted on.
I doubt inflation could happen with offshore pressures to reduce wages, which I believe to be at the core of our current economic problems and a direct driver of debt.
What is the end result for the world if we actually fail to repay the 60 trillion dollars we owe in total (I left out pension obligations)? The article basically points out that while we are reducing debt, that reduction is almost all on the default side, which simply shares the default with everyone else in the form of higher national debt, bank fees, taxes etc…
I am guessing collapse of world economy is in the bag at this point and not that it will make the Bilderberg folks unhappy we will see emerge a single world currency held by few with a lot of very unhappy and poor citizens in the US and Europe joining the rest of the world…
“The article basically points out that while we are reducing debt, that reduction is almost all on the default side,”
That is my assumption as well, though I haven’t seen it stated as such. With wages falling and costs of things people have to buy rising, I don’t see how savings could be increasing except possibly for a very small percentage of the population. I don’t see how savings could be increasing except in relative terms.
Precious metals bullion is already the alternative world currency.
I can sell a one ounce Australian Kangaroo for $1585 (US). I can sell a one ounce Chinese Panda for $1600 (US). I can sell a 1.2 oz Mexico gold 50 peso for $1870 (US) - common denominator is “US” I could probably sell those for yen or for yuan or ruble or whatever. It does not matter. I have a dealer in Los Angeles that does cash transactions five days a week. I probably can do the same in Clearwater or in Phoenix. I only went to one small dealer regularly to buy (not sell) in Phoenix years ago when gold was $690 per ounce
It turns out that aldinsane was correct, at least for the moment. I personally think that PM’s have gone too far, too fast, but what do I know? My only wish is that I had bought more in 2005, when I joined this board. If I had done so, I could buy a house for cash today. (Inan expensive neighborhood. Oh, well.
They look good at times of peak panic (like about now); the questions are (1) how they will do when panic gives way to calm, and (2) whether you can unload before the panic premium evaporates.
T-bills, Series I bonds, TIPS…all look good to me today. I am loading up on ‘em like crazy! PM prices IMO are out of my budget, still slightly more than ten percent of my assets, so it makes me buy more treasuries to shore up that side of my asset allocation. My wish is to be able to justify buying more gold! Cannot justify it against my emotionless spreadsheet!
“times of peak panic (like about now)”
I don’t think we are anywhere near peak panic.
Just my humble opinion.
My panic level measure might admittedly be off target. But considering how quickly the picture has deteriorated since the beginning of 2011, I suggest the trajectory is not promising. The situation at hand is highly reminiscent of the August 2008 credit crunch, and I am sure you recall what happened soon thereafter in September-October 2008.
“I am loading up on ‘em like crazy!”
I wonder if another Bill (Gross, that is), who keeps saying Treasurys are poised to crash, is acting similarly behind the scenes. If I were interested in buying an asset and had a MSM bully pulpit available, then I would certainly consider trying to drive down the price by scaring others into selling, assuming this is legal (and I believe it is, under the First Amendment).
I note that interest rates similarly dipped to ultra-low levels just before the stock market collapsed and the dollar rallied in the Fall 2008 (Q4)-Winter 2009 (Q1) period.
Bill Gross: Treasury investors will ‘get cooked’
By Hibah Yousuf
June 8, 2011: 9:04 PM ET
CHICAGO (CNNMoney) — Pimco founder Bill Gross reiterated his warning to cash out of Treasuries Wednesday afternoon.
Investors who have been betting on Treasuries are destined “to get cooked like frogs in an increasingly hot pot of water,” the well-known bond bear told attendees at a Morningstar Investment conference in Chicago.
Gross, who manages the $235 billion Pimco Total Return Fund (PTTAX), said real interest rates, which remove the effect of inflation to measure the actual yield an investor receives, have fallen into negative territory.
He pointed out that Treasury inflation-protected securities with a maturity of 5 years are trading at a yield of -0.5%. In October 2008, the 5-year TIPS’ real interest rate stood at 4%.
Why Pimco cut its bond holdings
Given the “staggering” drop in yields and the fact that, on a historical basis, they are low, Gross said interest rates can’t sink much further “absent a potential crisis in the dollar.”
…
More advice from Bill Gross:
“Treasuries are only half of the bond market,” Gross said. “Look in countries where monetary policies are less repressive.”
He said that Brazilian debt offers real interested rates between 6% and 7%, and Canada, Mexico and Germany also offer better deals on their bonds.
This sounds good, unless the dollar unexpectedly rallies, in which case (U.S.-based) foreign bond investors will take a bath, while Treasurys investors end up looking smart.
I’m sticking with big sin stocks; XOM, PM, BTI, MCD,and BF-B. They have done very well over the long-term and have done relatively well the last few years.
I personally think that PM’s have gone too far, too fast, but what do I know?
IDK either but here’s a 10 year chart of gold. In light of what has happened the past 10 years globally, nationally and with the treasury and the Fed is this too far too fast?
http://www.kitco.com/charts/popup/au3650nyb.html
Maybe it’s different this time with gold, but usually when the price of an asset undergoes a more-than five-fold increase over the span of one decade, that is evidence that a bubble is in progress an incipient sign of collapse.
“…and an incipient…”
an incipient sign of collapse
… of the dollar.
I don’t see how the US gov’t could decide to default being the “reserve currency”. Perhaps some kind of partial default? QE2 has taken on a black eye, as it were, and QE 3 would be largely unpopular in the financial community.Nonetheless, I thought, as have many, that this debate would have been decided years ago. The question is: exactly who, if any party, benefits from keeping on the edge of our collective seats?
I don’t see how the US gov’t could decide to default being the “reserve currency”. Perhaps some kind of partial default? QE2 has taken on a black eye, as it were, and QE 3 would be largely unpopular in the financial community.Nonetheless, I thought, as have many, that this debate would have been decided years ago. The question is: exactly who, if any party, benefits from keeping on the edge of our collective seats? Sorry if it’s a double post. By the way, remember Las Vegas Landlord? I do.
“Las Vegas Landlord”
I’d love to hear his views on the status quo. Is he still out there somewhere in troll land, reading our posts?
We already have two international currencies, dollar and euro. It’s not working well for most.
What is your honest prediction as to what will ensue in the future months, years? I’d be curious to know.
No prediction of mine would be honest. I’m usually surprised and shown wrong. I always underestimate the lengths that oficials will go to with disregard for logic, conscience or truth. However, I thought the Euro would be a problematic experiment from day one, because there is no central government to back it up. Along those lines, an international fiat would require an international government. I just don’t think people are ready to do that. If the Euro crumbles, think anyone there would like a redo on a larger scale? Another point is that only healthy persons can join to make a healthy partnership. A bunch of sickies getting together do not make a wellie. It will be a long time before most countries are healthy financially. Currency union is not the path to wellness.
“…two international currencies…”
Don’t forget gold!
OK, Two international fiat currencies.
At some level, I may not realize how low the willpower of the average person is. Rather than “SOME people will always be willing to borrow their way to the poor house,” it may be the MOST people are willing to do so. If the thing that has changed is a greater availabiltiy of consumer credit we have to look at WHY that is. I’m going to argue again that there is more money chasing investment than Wall Street can find “good”* uses for. Some of that is due to trade imbalances. We’ve given the world a bunch of dollars in exchange for the goods that they have send us. If exhcange rates were free to float, there would be pressure** for the dollar to fall until trade imbalances equalized. Instead, the Chicoms have trillions of dollars which the spend on bonds. Cutting taxes on the highest incomes and on capital gains under the mistaken contention that more investment is an unqualified good was a mistake IMHO. We need a dynamic investment market. Wall Street is a reasonably effective way of taking money and funneling it to investments. Certainly the mistakes that it is prone to are different than those that the government is prone to so that our bases are covered. But for the reasons above, Wall Street has FAR more money than it seems to know that to do with, and repeated bubbles cause by too much credit are the result and evidence of this. Just because there is such a thing as too little investment, too little credit, does NOT mean that more is always better.
In the 90s we had too much money going into pie in the sky internet and computer businesses: Pets dot bomb, dark fiber and the rest. Wall Street funneled more money into losers than winners. in the 2000s we had an explosion of consumer debt, much of it disguised as secured mortgages and HELOCs that in reality had little chance of being repaid in full.
*New factories and equipment. The sorts of things that turn raw materials into products at ever greater levels of efficiency.
**Of course long term pressure toward an equilibrium does NOT mean no bubbles in the foreign exchange market any more than the housing market.
“…why have people borrowed and then spent as if their incomes were growing?”
Pre-2006, the explanation was very straightforward: U.S. households viewed their homes as a third income source, with the income stream accessed through the magic of “innovative,” Greenspan-approved home-equity cashout financing.
As of 2011, this source of “income” (and “savings”) is starting to look pretty tapped out, and the idea of financing consumption this way is appears patently insane when viewed through the rear view mirror.
Americans in Debt: ‘Using Home Equity as an ATM Machine’
By DAVID MUIR and BRINDA ADHIKARI
June 17, 2008
John LaPerch of New Milford, Conn., pours through the half dozen unpaid credit card bills — $78,000 of debt — that keep him up at night.
LaPerch is like the millions of Americans who, at the height of the housing boom, watched the value of their homes go up, along with the number of sweet deals arriving in his mailbox.
“I had a $1,000 credit limit,” LaPerch said. “Next thing I know, it’s up to 14 grand.”
Though he says he never requested the limit increase, which just “showed up,” LaPerch also admits he took advantage of it.
At the peak of the housing boom, from 2001 to 2006, a USA Today analysis shows credit card companies quietly rose cardholders’ spending limits — on average, 17 percent to more than $8,000 a card — and in many cases, much higher, without consumers asking for it.
Then the banks told consumers: You can pay off those rising credit card bills by borrowing more, such as taking a loan out on your house or getting a home equity loan.
One consumer advocate says that, for the banking industry, it became a “lucrative hamster wheel.”
…
“lucrative hampster wheel” = company store
Main Street America = company town
Molly and me and the HELOC makes three incomes.
“Yes, there are always some people who will borrow their way to the poor house.”
The normal trickle of people borrowing and spending their way to the poor house poses no problems for the macroeconomy.
When the vast majority of Americans is doing this, with active encouragement from the Federal Reserve Chairman, we are in deep doo doo.
“…if the mortgage pusher says you can refi your mortgage, have a lower payment and get $20,000 cash, are most people going to realize that they have added 15 years to their mortgage pay off date and handed a $10,000 fee to the bank? Maybe, but maybe not.”
NO — WAY!
“My guess is that the average person was more dependent on the bank to determine what they could handle than the average HBB participant might have originally thought.”
Speak for yourself.
I always thought a key part of the problem was that households had no clue banks would make loans that could never have reasonably been expected ever to be repaid. The assumption on both sides seemed to be that with ever-rising home prices, a borrower could always sell and pay off the loan balance out of home equity gains, or extract equity and refinance the loan, if they wanted or needed to unwind their current mortgage arrangement.
It worked just great until the point when the music stopped (i.e. real estate stopped going up).
“And this is even before you ask if they realized that they converted their fixed rate fully amortizing loan to an adjustable rate, negative amortization loan with a 6 month teaser rate.”
Lunatic fringe incarnations of rational expectations theory assume that the average household has a finance PhD level knowledge of the intricacies of financial contracts.
“The economy is still struggling. And Americans are in for a long and painful adjustment period. One major reason: their own household debt. The bubble economy that led to the recession was fueled by American consumers, businesses and banks taking on too much debt, particularly in real estate, during the decade before the crisis.”
I’m wondering at what point it will make sense to invest in banks with access to ‘below market’ (e.g. discount window) Fed-funded loans? From the demand side, the fundamentals look great going forward for lenders, with so many households in dire need of loans to cover their huge debt. If it weren’t for all those toxic assets still weighing down bank balance sheets, it might make sense to invest in them.
Perhaps the smart strategy would be to identify and invest in banks not weighed down by toxic balance sheets; but how does one do this when accounting standards are corrupted by extend-and-pretend latitude?
And why did everyone think house values would continue continue going up during the bubble years - haven’t seen much recent mention of the insane $250,000 (single) and $500,000 (couple) capital gains exclusion that could be used every two years. It is still in place too. And you only had to live in the house for 6 months to count a year, and some lied about even that.
Some humor for the weekend (forwarded to me via e-mail):
Subject: Its been a tough year already
The economy is so bad that I got a pre-declined credit card in the mail.
I ordered a burger at McDonald’s, and the kid behind the counter asked, “Can you afford fries with that?”
CEO’s are now playing miniature golf.
If the bank returns your check marked “Insufficient Funds,” you have to call them and ask if they mean you or them.
Hot Wheels and Matchbox stocks are trading higher than GM.
McDonald’s is selling the 1/4 ‘ouncer’.
Parents in Beverly Hills and Malibu are firing their nannies and learning their children’s names.
A truckload of Americans was caught sneaking into Mexico.
Dick Cheney took his stockbroker hunting.
Motel Six won’t leave the light on anymore.
The Mafia is laying off judges.
BP Oil laid off 25 Congressmen.
Congress says they are looking into the Bernard Madoff scandal. Oh Great!! The guy who made $50 Billion disappear is being investigated by the people who made $1.5 Trillion disappear!
And, finally…
I was so depressed last night thinking about the economy, wars, jobs, my savings, Social Security, retirement funds, and our bleak future, that I called the Suicide Lifeline and was connected to a call center in P*k* st*n . When I told them I was suicidal, they got all excited, and asked if I could drive a truck…
I used to subscribe to the “Wilson Quarterly” as a “scholarly journal”, but they published a puff piece about 5-6 years back titled “The wealth explosion” which talked in glowing terms of how we as a nation had landed in tall cotton due to the “innovations” in the finance sector.
I realized then they had joined the shill brigade and never renewed my subscription after reading that piece of dreck. I think and believe that the public really thought they’d been set free by a new paradigm under which they’d never really have to pay back the debt. Many friends of mine patronized me at the time for my naivete in refusing to join the party, but most of them are full of chagrin now…