So You Want to Renegotiate? Banks Hands May Be Tied.

There is a very clever hidden problem with trying to get banks and other financial agencies to renegotiate the debts for homes, businesses, and other borrowers. Behind the mortgage contracts, behind the lines of credit, and behind a lot of other debts there are contracts that are seldom revealed.

Why? Simple. The contract holders hidden behind these are BETTING on mortgages going into default, lines of credit and other loans also going into default, even the banks are being bet on to fail. Sound crazy? Crazy like a fox in the henhouse!

Take for example a simple mortgage on a house worth, say $200,000 and that mortgage is under water. Then the bank has separated itself from the mortgage by a contract to someone else, and that entity has use Credit Default Swaps to ensure they get something. The contract between the entity and the bank binds up any change in the mortgage, because the entity holding the contract WANT to see you lose, want to see the bank lose! That is where the entity makes more money from the default.

This same process is done with lines of credit for business, using the material wealth of the company for collateral.

Unless and until the entities who have these Credit Default Swaps are either put behind bars, investigated for forcing you and the banks to maintain a very unhealthy situation so the entity makes money, or the CDS contracts themselves are judged to be a hindrance to both you and the banks in renegotiations by the courts, you and the banks are going to stay in trouble.

Perhaps the smartest move here is to hire a lawyer, and take this to a court, using warrants to find out who holds the banks hostage to contracts like this. Unless and until the banks can get themselves out of these contracts by either using law or by the Federal Government outlawing Credit Default Swaps entirely, the economy cannot reasonably regain any stability.

When anyone bets on failure, and makes millions from the economic failure of banks, ordinary families, and businesses, then the whole of society has a huge problem.

The time has come to uncover these entities, reveal just how much damage has been created, and publish the terms of these very nasty contracts. The time is long overdue to find the roots of the problem and investigate just how much power some of the entities have over everyday lives.

So, if anyone is wondering why the banks are sweating and making things tough for renegotiation, then perhaps look behind the banks to the contracts betting on YOU going under, along with your banker, and the entity will be taking the money to another bank or hiding it for future abuse of others.

Credit Default Swaps took down Merrill Lynch, put many banks into such a mess they will take years, if they even survive, to get back on solid ground. My belief here is that, even now, someone is putting out Credit Default Swaps on the banks that do exist, the businesses, and even some of the major corporations like General Motors, Chrysler, and the casinos owned by Donald Trump.

Outlaw the damn things, now!

Credit Default Swaps are Insurance without Regulation, click here for fuller information

Corporations, Banks, Others Way Too Big Now?

This may sound like a simple question, but with all the bailouts and over 7.7 TRILLION dollars spent in the US alone, which amounts to $24,000 dollars per adult and child, I am really wondering if international linkages and businesses have gone beyond reasonable limits.  The reasoning for bailing out AIG was that “it is too big, too involved, to allow to go under” and now Citibank and subsidiaries along with the Big 3, Ford, Chrysler, General Motors are all in that same basket, all “too big, to much an integral part of the economy” to be allowed to fail too.

Maybe one of the plans or regulations or restrictions of some kind should be put on corporations that get to the point where the failure will create a massive disaster. I don’t know, but one thing I do know is the old saying, “The bigger they are, the harder they fall“. I suppose the corollary to that is the deeper the hole they create when they do fall.

Wal Mart is another part of the huge economic downturn. How on earth can I say this? Well, if most remember, when Wal Mart moved into communities, small shops, business, suppliers all died off. What most people want are lower costs, true, but at what detriment to their own communities. Each small business in town paid separate taxes, school, road, etc. as well as creating jobs for the owners and the employees in that small business. When a store like Wal Mart appears, the tax base goes down, not up. The wages for businesses who supply smaller stores are usually better than those paid by the big box stores, and most owners try to provide benefits for themselves and their employees. Wal Mart is well known to buy goods produced overseas, sending the money to foreign suppliers along with jobs.

Yep, people may get some things cheaper, but overall the economy loses. Businesses that worked in tandem with their neighbours often worked more efficiently, and became an integral part of the community, with problems dealt with on site. Again, is this type of business “too big to be barred”?

If people want to have work, decent work, then maybe it is time for the small business owner to be allowed to thrive without dealing with the big box stores. Each of the big box stores hire fewer employees and pay them as little as possible. Employment goes down, not up. Imagine trying to get a foothold in business when you have to deal with those who have the funds to undercut you at every turn. Tough to make a decent living with that going on, yet people want work!

Some of the Wal Mart stores have been unionized. Yep, they have been. Yet, Wal Mart tried to make a case for closing the first store to become unionized by closing it and opening another close by. Hmm not a good way to be a decent employer or neighbour, or one that I would, personally, want to have nearby.

Yes, I do shop at one of the big box stores here, but I will never work or buy from Wal Mart. The way the company treats the general public, employees, and especially their suppliers is a methodology I cannot support. So, I speak with my dollars. I will shop at other stores that compete with Wal Mart instead.

Big banks, with many arms into all kinds of financial realms, can make a very shakey structure if one part is weakened. Citibank is one of those, with a multiplicity of arms. GM even got into mortgages, instead of maintaining the focus on automotive innovation.  AIG got into some financial areas it should never have, so when it got into trouble, out goes the tax man to pay up. AIG was supposed to be an insurance company, backing mortgages. See a theme here? Corporations did not keep their focus, did not keep their area of expertise intact, and others, like Wal Mart, have removed small businesses all over the country, even internationally. The effects are now being seen as people are either worried about jobs, or out of the workforce, maybe for a long time now.

Bigger is defninitely NOT better, when bigger can crater economies.

Tax Money, Whose Is It?

Town council, city council, state, province, federal, even tax for schools and roads, all depend on someone having to pay up. Lately I have noticed a laissez-faire attitude toward the spending, the use of those tax dollars, as if the supply will always be endless and plentiful. Bad attitude!

Whose dollars are those? Whose pounds, yens, pesos, are those? Often they come from the pockets of the poor, the fastest growing segment of most societies. This means children are often eating poorly, going without new shoes, clothing, so the taxes can be paid. Those taxes are coming from families with single parents working part-time, paying for daycare, rent and all those other daily expenses. Tax dollars come from the people who work in minimum-wage stores with no health plan. Tax dollars come from the small shops who make or sell things. Tax dollars come from welfare payments, retirement income, the small trust funds of children who have lost a grandparent. Tax dollars are seldom gained from those who live in the high-income brackets, because there are write-offs, tax deductions for stock losses, and other means to avoid paying taxes. For every 100 tax dollars, less than half of 1 % is from those who make the most.

Poverty bashing has been a growing game, with those who are forced to live on food stamps, unemployment payments, and welfare the people targeted for derision, scorn.  “Get a job!” “Come on, get off your butt and get out there, earn your own way!” “Stand on your own two feet, I am tired of you sitting there and collecting money, tax money, from my hard earnings!” Take a look at almost every industrialized country statistics and you will find a very ugly trend. Poverty is growing. One in ten children now live in poverty in countries that have huge wealth, why? Wages for single parents are usually low, college, university, even health care courses are all well out of the range for any children of single parents. Costs have risen consistently at all those higher education sites, putting the squeeze on money. How could any of those children even consider getting out of the poverty black hole? Food banks are a common sight now, when once, food banks were only seen in cities with huge populations.

This is where Barack Obama had it right, START AT THE BOTTOM! The real bottom. The middle class has virtually disappeared because of the huge gap between those earning the high wages and income and the lower. The middle class is quickly becoming part of the poverty class, the lowest rung on the ladder.

When the 3 auto makers showed up in Washington, for example, there was a severe public relations gaff they made. People were aghast that those CEO’s showed up via private jets to ask for the tax money. Hmm not a good plan, guys! This showed a complete lack of understanding and even comprehension about tax funds, where the money comes from.

This current shakeup is, in a way, ironic. Those who “invested” in CDS, who played funny-money with others hard-earned money, have lost a huge chunk of their own income from the stock market collapse, the losses in the real-estate speculations, the property bought as “investment” for rental. So, no longer are those people walking around looking like they “own” the world. But, those people are the very ones who distained the ordinary working person, the money and taxes from the growing poverty class, and spent like a lottery winner. CRUNCH!  Now maybe some people will realize that every person who is going hungry, who lives in misery, is directly connected to all of us, and in ways we don’t see, we are the ones who are hungry and miserable too.

The bottom line here is respect. We need to relearn respect for ourselves, to do what we know as well as we can. We need to have those who want to have our tax money learn to respect the work required.  Maybe, just maybe, we can then learn to respect those who live with the hardest struggles, those who have been scorned and derided, the Vietnam veteran, the father, the mom, the sister, the son or daughter who live on the cold streets.  Yes, they deserve respect too.

Most of all, we all need to respect our own lives, to realize that we do all have unique abilities, skills, and underneath, we all are sacred, no matter what religion or belief system we use. We also have to respect our world, making sure that we don’t create such a mess that animals starve or get sick and die from poisons we add to the world.

Every being alive looks for a better future, wants to create a better world, and every one of us is capable of doing that. What the definition of “better” is, is where we have to put respect, honour and care into choosing what we do.

Child and Family Poverty Growing in Canada

Little Change For 20 Years in Poverty Rates

Welsh Children and Families living in poverty

National Center on Child Poverty, Letting Poverty Remain Costs All Of Us

State by State Cost Of Child Poverty in the U.S.

As long as we all believe that we MUST be compared to others, we all lose perspective. Poverty WILL grow now, with job losses, houses foreclosed, debts rising, and support systems being slashed.