On The Night Before Christmas, All Through the House...Oops We Just Lost the House
T'was the Night Before Christmas, a season of closure
We just lost our house because of foreclosure
Clement Moore, the author of the original poem called "A Visit From St. Nick" recited like a mantra at this time of year once lived down in my Manhattan neighborhood called Chelsea. He lived on a farm then but probably couldn't afford today's gentrified rents. He was actually not just a kindly old poet spinning verses for Santa and the reindeers, but a scholar who compiled a two volume Hebrew Dictionary.
Even then, things were not always what they appeared to be.
On WAMU, BoA, Amex and Visa
I can't find the money that's needed to please you
We have just lost our home, oops, there goes the car
As prices go up, with the economy down, I've moved to a bar
For all the traditional tree trimming and house warming today, there is a growing dread as more and more home-owners default on their homes. The action hammer is now competing with the Christmas carols for our attention as whole neighborhoods pay the price for the subprime scandal that has yet to be ended or prosecuted. As the housing bubble bursts, governments are facing a loss of revenues and will be forced to slash schools and services.
On one side of the spectrum, The Wall Street Journal reports that 2007 was the best year yet for the super rich. The investment bank Goldman Sachs, whose former Chairman Hank Paulson (now our Treasury Secretary) feigns concern for families struggling to stay in their homes, paid out 12.1 Billion in Christmas bonuses. Their current Chairman/ CEO Lloyd Blankfein took home nearly $68 million in restricted stock, options and cash.
Nomi Prins, a former Managing Director of Goldman turned critic detailed "the corporate mugging of America" in her brilliant 2004 book Other People's Money. She noted that after the last fraudulently created bubble burst, "many of the perpetrating companies and executives got away with it. Almost everyone -- from the corporate executives to the banks to the regulators to Congress to the Oval Office -- escaped without admission of responsibility or direct retribution for the jobs and the money lost."
The book opens with a quote from Balzac: "The secret of great wealth with no obvious source is some forgotten crime, forgotten because it was done neatly."
As history appears to be repeating itself, the sounds of protest are slowly beginning to rise in a culture of denial where economic prosperity for some masked deepening inequality for others.
ONTARIO, California (Reuters) -- Between railroad tracks and beneath the roar of departing planes sits "tent city," a terminus for homeless people. It is not, as might be expected, in a blighted city center, but in the once-booming suburbia of Southern California.The noisy, dusty camp sprang up in July with 20 residents and now numbers 200 people, including several children, growing as this region east of Los Angeles has been hit by the U.S. housing crisis.
The unraveling of the region known as the Inland Empire reads like a 21st century version of "The Grapes of Wrath," John Steinbeck's novel about families driven from their lands by the Great Depression.
Other homeowners are fighting back. For the details, read the comprehensive website of the American Homeowners Resource Center.
Former real estate investors like another Californian, Michael Blomquist who was tricked out, of millions is speaking out.
You can track the real estate decline here.
Organizing is underway. Fresh from his march on Wall Street, Rev. Jesse Jackson of the Rainbow PUSH Coalition is following up. He is calling on Congressional leaders and other elected officials to convene with him at his 11th Annual Wall Street Project Conference in New York Jan. 6-9, 2008. Community activists are like CHANGER, based in East New York, Brooklyn are protesting the Washington Mutual Bank, a bank being probed by the SEC for fudging home appraisals, on Christmas Eve as part of a campaign called "The BANKS THAT STOLE X-MAS DO SOMETHING: KEEP YOUR HOME campaign kick off."
Writing on Mediachannel.org last March, well before the summer's market meltdown and this final quarter's massive write-downs, I called on my "colleagues" in the worlds of alternative/independent media, progressive movements and the blogs to broaden our focus to examine economic issues.
Perhaps now, nine months later, and with billions, make that trillions, of dollars vanishing down various rat holes thanks to the financial crisis, there will be a shift.
We are calling for better coverage of the greed and crimes of Wall Street. Maybe because of the work I did in making the film, In Debt We Trust, I was more alarmed than most. I realized we can't just get obsessed with partisan politics and ignore economic interests. Those are the forces that are devastating the lives of so many Americans who have lost their jobs, can't pay their bills and are victimized by institutionalized rip-offs which does not seem to have become a major political issue yet..."
The progressives may be lagging but the polls show that the voters get it and are now making the economy their central concern.
The government is trying to bail out the financiers, not the people in need. The banks are in a crisis of their own making, caught, as the Telegraph in London put it between "the Scylla of the debt crunch and the Charybdis of inflation." So far the Federal Reserve Bank has failed to contain the freefall. The Treasury Department's recent mortgage "reform" has only helped 300 families. Its real purpose seems to be to block the banks from being sued.
House Financial Services Committee chairman Barney Frank (D-MA) says, "We now have confirmation of two facts we have known for some time: one, the Federal Reserve System is not a strong advocate for consumers, and two, there is no Santa Claus. People who are surprised by the one are presumably surprised by the other."
So we return to evocations of old St. Nick. And just to add to the bizarre ironies of the moment, The Economist magazine has put China's communist hero Mao TseTung on its cover (while Putin graces Time). Mao is wearing a bright red Santa hat.
What was once the Red menace may have become our salvation.
News Dissector Danny Schechter directed "In Debt We Trust," a film on the debt crisis warning of many of today's developments. is new e-book, Squeezed, explores the crisis.
(Coldtype.net) Comments to dissector@mediachannel.org
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And your surprised? You don't see the fading of the middle class? More rich..more poor..makes sense to me...
We can thank our politicians, lawyers and lobbyists. And just who can we support that would really stop the extinction of the middle class? I'm confused could you help me out?
Dorothy from grammology
remember to call gram
http://grammology.com
2007 USA GDP=12x8^42nd dollars, give or take a heptillion
2008 USA GDP= $13.50
The subprime mortgage phenomenon is not my area of expertise, but I would like to venture an opinion.
It seems to me that there is a legitimate need for subprime mortgages. However, when the industry was not regulated, it became a way to fuel a price bubble for homes. If this description of the problem is accureate, has anything been done to insure that the problem cannot happen all over again the next time unscrupulous speculators are inclined to operate this way?
Also, since the subprime problem did not occur prior to the recent one, what changed to allow it to happen? Who made the changes? Should we blame the usual suspects, neo-cons in the federal government?
There are plenty of people getting hurt by this mortgage crisis that are responsible homeowners. They didn't get into stupid loans for houses they couldn't afford. Nevertheless, they can't sell their houses in this real estate market. So, they might have to rethink that better job offer in another city. Or, if the house is no longer a good fit for them, too big or too small, they'll just have to accept the condition. And, as the economy worsens the people that weren't greedy investors or stupid buyers might be faced with the same foreclosure nightmares if they lose their jobs.
The speculators treated homes as investments and screwed up the entire system out of greed. Now that they cannot pay the mortgage on 5 properties and seek to be bailed out is of no consequence to me. Let the chips fall were they may and when the smoke clears perhaps the housing market will get back to what it was meant to be, which is providing secure affordable shelter for a family that can be passed down through the generations as an asset.
I am a "roomie", a roommate, who lives by choice in effect in a roommate situation because I choose to live in San Diego, Ca. I have a job here and if I were to live somewhere else I could maybe afford my own place. But the job is here and therefore I have to live here. Anyone who visits sees the perfect place to live and anyone who lives here knows the cost of living associated is much higher than many other places. Due to the housing market many many houses here have someone not related living in them. It is a hidden thing as those who own the house, that have the loan, have to have the income to afford to keep the house and don't declare to the IRS this income. I will never get a rent tax break because I cannot claim it where I live. It's the economy that keeps this going and as we go along and more loans fail the people who live here in San Diego will fill even more empty bedrooms with strangers. No longer a choice local to universities or college but a life choice on everyone's street.
Bottom line (no pun intended) for me is that $12.8 billion in bonuses; $68 million to Blankfield is just a microcosm..multiply that by all of Wall Street/ banks/ the marketplace in general..it is the epitome of our economic system & social/ class prejudice.
The working "middle class" affected by the housing crisis trusted the experts..yes, they should have educated themselves a bit more before buying into a "deal too good to be true", but there is NO way those experts shouldn't have to answer for their actions. Just as with the S&L fiasco of the 80's, I suspect that no one involved will be held responsible. That's the legacy of Reagan that should be remembered. Worked once..do it to me one more time, eh?
I find it difficult to believe Greenspan & other economists, regulators didn't know what was going on, but if not, they should have. Our whole capitalistic system is rigged for the market/ investors. For years, they have gotten rich on the backs of the working class consumers. They take a risk, they should be responsible for the outcome, NOT pass it on to consumers & employees. Stuck with the most devalued dollar in modern times & owned by China, we're told to consume to correct problems. Here in Oregon, there is a Santa Claus..it is beyond irony that we receive almost yearly "kicker tax" rebates from the state's surplus. In filing taxes, you can actually check whether you want it for yourself or are willing to give it to education. Say WTF? Why? Guess when those checks arrive? That's right, in December just in time to pump up the economy with those Christmas purchases!
Meanwhile, those in that "best year for the rich" class are enjoying holidays in places like Aspen, abandoning all to gluttony the likes of which we haven't seen since King Louie/ Marie Antoinette, while MS America gets to file by, watch their insatiability & live vicariously, but only if they are lucky enough to have a place to live and a television!
Thanks, Donny..great post, but oh-so distressing!
"Between railroad tracks and beneath the roar of departing planes sits "tent city," a terminus for homeless people. It is not, as might be expected, in a blighted city center, but in the once-booming suburbia of Southern California.
The noisy, dusty camp sprang up in July with 20 residents and now numbers 200 people, including several children, growing as this region east of Los Angeles has been hit by the U.S. housing crisis.
The way that is quoted with the relevant part omitted is a LIE. It does NOT say what is implied by using that quote in the post.
The article goes on to say that NO ONE in that tent encampment is there because they lost their home in foreclosure. NOT ONE!
The article says: "While no current residents claim to be victims of foreclosure"
You didn't link the article so I will:
http://news.yahoo.com/s/nm/20071221/lf_nm/usa_housing_social_dc_2
The people are there because they can NOT afford housing becasue crazy loans and greedy buyers who bought houses they could not afford to pay for in the long run drove housing prices out of sight - and drove up rents and made it lucrative to turn apartments into condos.
"Steve, 50, who declined to give his last name, moved to tent city four months ago. He gets social security payments, but cannot work and said rents are too high."
The mortgage problems are real BUT passing off that article as trying to portray people who landed in foreclosure because they bought more than they could afford or used their house as an ATM to pay off credit cars, buy SUVs or other things (and that was 85% of HELOCs) is EXTREMELY dishonest.
Above all, as you struggle to come to terms with your marginality and possible destitution, do not blame the rich. They don't like to be criticized.
In the movie Doctor Zhivago, there is a scene where Zhivago returns to his hometown as the Bolsheviks and the Czarists are resolving their differences, to the formers' favor. His father-in-law is appalled that the Red Partisans have seized his property, and turned it into an ersatz condominium. Zhivago's comment, to placate the Party Comrade in Charge, is something to the effect that it was always too big for one family anyway.
Search the Census records of the 1930's in America and you will find countless records of "boarders", and "roomers" sprinkled into families' homes across our land. The reason then was the loss of income producing employment, the foreclosures on real property, and the resulting displacement of our society which resulted from the Great Depression.
As a licensed but non-practicing real estate broker in the Northeast, I have always suggested that anyone who can afford to stay in their home on their current income do so. There is never a time to speculate on what your home is worth. If you do not need to move, due to significant changes in your family's housing requirements, you should not. I have always said that! It is sound advice for a reality-based residential market!
If your immediate family is impacted by foreclosure, and there are creative ways to meet the obligation, ... and share expenses, ... DO IT! And if you can find a way to defer foreclosure or defray household expenses by providing housing to a boarder or roomer in need, ... Do It. You follow a time-honored tradition among Americans to help one another when we all find ourselves in need.
This "economic" period seems to the experts not to resemble others in our history. We wear different clothes, ... our leaders tell us to shop when they should perhaps tell us to save for a rainier day. For my part, I believe Americans will find creative ways to share our housing spaces and resolve our mortgage crisis.
Humility and creativity is the solution. That comes from people.
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