Thursday, October 30, 2008
Some news that will show the rocks lurking beneath the water.
On Oct. 3, the U.S. Bureau of Labor Statistics' reported that over the past 12 months, the number of unemployed has increased by 2.2 million and the unemployment rate has risen by 1.4 percentage points. Total non-farm payroll employment decreased by 159,000 in September and thus far in 2008, payroll employment has fallen by 760,000.
What is the impact? Unemployed people use their resources to survive (credit cards, etc.), but cut back consumption as much as possible.
Ripple Effect: 70% of the US economy is based upon consumer spending.
Retail will plummet - and all of the manufacturers and suppliers will starve. The economy will slow.
There was a 60 Person line at Costco yesterday...people looking for any employment.
These people are easy pray for the fake solution "we will keep you in your house" debt pirates.
More suffering in the future.
Saturday, October 11, 2008
The next great wave of scams will be "Credit Repair" companies as credit tightens to epic proportions. Everyone under 700 can just pay cash.
Desperate People will pay these fly by night companies anything on unregulated promises. These CyberGypseys(tm) close down shop and move as the States and the FTC move in for the kill.
There was one that asked people for their Bank Routing Number! Can you believe people gave it out. I called one and they were indignant and still in operation in Tampa. The Feds know about them but cant seem to move fast.
They can spend $700B to bail out their buddies but SCREW the common guy suffering.
This from the Jacksonville News:
Although there are reputable businesses that help consumers through the credit repair maze, state and federal agencies say they are fielding thousands of complaints from people who paid businesses to "clean up" their credit reports.
The businesses typically charged several hundred dollars in advance and promised to permanently eliminate negative information from credit reports, even if the information was "accurate and timely," according to the FTC. "
Unbelievable! Here we go into the dark ages.
Tuesday, September 30, 2008
When you ask for guarantees you can hear the tires squeal as they put the gears in reverse. One such parasite actually told me "We are an attorney run company." I said "Oh...so you are an attorney?" She replied "Well...no...but we have attorneys." After 10 minutes she confessed she is selling the services from her home and has never actually MET any of the attorneys, nor did she know names other than from her script.
Being an attorney myself, I was shocked that she had no idea that she was giving legal advice. She clearly had a script but departed from it to hype the sale.
Then the come on line. "You know we can check the paper work to see if any mistakes were made. If they were you get to keep your house and you don't owe anything. This happened just the other day with one of our customers. It happens all the time. We don't guarantee it, but it is worth the extra money to try."
Welcome to the debt parasite version of Las Vegas. Spin the wheel and get a house!
And as usual, they would supply no names, no proof, no nothing. They would not send a contract without a commitment - nor would they put the fee in writing without my asking 3 times. Even then they were vague.
So why do people fall for this stuff?
They are desperate, frightened and do not have the legal advice that any company would normally have. They heard about a bail out plan and they think this is somehow linked to it. People make emotional decisions at times of crisis.
Any competent bankruptcy attorney can help someone determine the next steps when facing financial disaster. Our Vigilant attorneys are clear that they honor the original intention for creating law as a profession in the first place: TO BE OF SERVICE.
Next theme...beware of the firms that are in the "business" of bankruptcy.
Friday, August 15, 2008
Debt Pirates! Ahoy!
They market to the frightened, promising to help "keep your house". In fact, they merely take money to postpone the inevitable. Today I saw a contract for one here in South Florida that charged $1,200 to merely say "find a lawyer to enter an appearance" and then they merely called the bank to get the balance and amount needed to bring the loan current.
The joke is that by law the bank must provide that information FOR FREE WHEN ASKED!
This is going to get worse.
More people are jumping on the bandwagon. The radio is full of Debt Pirates with promises of finacial salvation. Any decent attorney knows that this seldom works...debts don't just go away.
More to come.
Thursday, August 14, 2008
The inevitable outcome of real wages dropping or real costs inflating plus no access to credit = complete consumer meltdown. The result is much suffering or bankruptcy. Take your choice.
In my experience in Bankruptcy Law, airlines file Bankruptcy to avoid suffering, real people suffer and suffer and feel bad, lose everything and THEN file.
Aug. 14 (Bloomberg) -- U.S. consumer prices rose at the fastest pace in 17
years in July, limiting the ability of the Federal Reserve to lower interest
rates as economic growth slows.
The cost of living climbed 5.6 percent in
the year ended in July, the Labor Department said today in Washington. It was up
0.8 percent from the previous month, twice as much as anticipated. So-called
core prices, which exclude food and energy, also advanced more than projected.
The surge last month reflected energy prices that have since declined,
signaling July may represent the peak in inflation. Still, increases went beyond
food and fuel, including gains in clothing, airline fares and education, likely
intensifying discussions among Fed policy makers about how quickly to shift
toward raising rates.
``What we are seeing is a lot of commodity-price
spillover'' into other items, said Richard DeKaser, chief
economist at National City Corp. in Cleveland, who correctly forecast the
increase in core prices. ``Numbers like this increase the hand of hawks'' at the
Fed who argue that rates need to rise to quell inflation, he said.
costs have retreated since mid-July. Crude oil futures dropped as low as $112 a
barrel this week after topping $147 last month. Regular gasoline, which reached
a record $4.11 a gallon on July 17, has fallen about 8 percent, according to
``We're probably looking in the rearview mirror with respect to the
worst part of inflation,'' said Joseph LaVorgna, chief
U.S. economist at Deutsche Bank Securities Inc. in New York. ``Energy prices
have declined sharply in the last month.''
rose, with benchmark 10-year note yields falling to 3.89 percent at 4:35 p.m. in
New York, from 3.94 percent late yesterday. The Standard & Poor's 500 Stock
Index advanced 0.6 percent to close at 1,292.93.
Separate reports today
reinforced evidence of a weakening job market and continued slump in housing.
The Labor Department reported that 450,000 Americans, more than anticipated,
filed first-time claims for jobless benefits last week. Claims averaged 321,400
The median price for a single-family home in the U.S. dropped 7.6
percent in the second quarter as bank sales of foreclosed homes caused values to
tumble in three-quarters of U.S. cities, the National Association of Realtors
Sales of single-family houses and condominiums fell 16 percent to
4.913 million at an annualized pace, a 10-year low, the realtors group also
Consumer prices were forecast to rise 0.4
percent, according to the median estimate of 78 economists in a Bloomberg News
survey. Projections ranged from gains of 0.1 percent to 0.7 percent.
excluding food and energy increased 0.3 percent for a second month, exceeding
the 0.2 percent median forecast of economists surveyed.
The core rate
increased 2.5 percent from July 2007, the most since January, after a 2.4
percent year-over-year increase the prior month.
Energy expenses jumped 4
percent, after a 6.6 percent gain in the prior month, today's report said.
Gasoline prices increased 4.1 percent.
Procter & Gamble
Co. was among businesses that responded to the surge in oil earlier this
year. The world's largest consumer- products company charged more for Cascade
dishwashing detergent, Iams pet food and Gillette razors to offset some of the
jump in packaging costs. McDonald's Corp., the
world's largest restaurant company, raised prices as ingredient expenses surged.
``Beef and cheese are up, but we've been able to
mitigate that cost,'' Chief Executive Officer James Skinner said in
an interview in Beijing last week.
The consumer price index is the
government's broadest gauge of costs for goods and services. Almost 60 percent
of the CPI covers prices consumers pay for services ranging from medical visits
to airline fares and movie tickets.
Today's report ``raises the general
trajectory'' of interest rates, reducing the chance of cuts and bringing forward
the likelihood of increases, William Poole, the
former St. Louis Fed president, said in an interview with Bloomberg Television.
Poole is a Bloomberg contributor.
Food prices, which account for about a
fifth of the CPI, gained 0.9 percent after a 0.8 percent increase in June.
The increases went beyond food and fuel. Clothing expenses jumped 1.2
percent, the most since 1998. The cost of an airline ticket rose 1.3 percent and
education expenses climbed 0.5 percent for a second month.
Rents, which make up almost 40 percent of the core CPI, cooled. A category
designed to track rental prices rose 0.1 percent, compared with a 0.3 percent
gain in June.
The rate-setting Federal Open Market Committee last week kept
its benchmark rate at 2 percent for a second straight meeting. In their
statement, policy makers said they expect ``inflation to moderate later this
year and next year, but the inflation outlook remains highly uncertain.''
Dallas Fed President Richard Fisher
dissented in favor of raising rates, and others have indicated concern about
leaving borrowing costs unchanged for a prolonged period. Minneapolis Fed chief Gary Stern and Charles Plosser of the
Philadelphia Fed said last month the central bank may need to raise rates even
before the housing market stabilizes.
Thomas Hoenig of Kansas
City said July 16 the current level of rates ``almost certainly raises the risk
of higher inflation.''
Today's figures also showed wages
decreased 0.8 percent after adjusting for inflation following a 0.9 percent drop
in June. They were down 3.1 percent over the last 12 months, the biggest
year-over-year decline since 1990. The drop in buying power is one reason
economists forecast consumer spending will slow.
Higher gasoline bills and
tighter credit reduced automobile purchases in July, causing retail sales to
drop for the first time in five months, government figures showed yesterday.
A jump in the cost of imported goods may also give American companies leeway
to charge more, economists said. Prices of products made overseas soared 22
percent in the year ended in July, the most since at least 1982, the Labor
Department reported yesterday.
Wednesday, August 13, 2008
When the Big Lenders get in trouble, obviously it is time for a bail out from the Feds.
But what is there available for the people at the other end of the equation?
And the only bail out that most regular people will be elgible for is to get out of jail.
The real solution of course is to own up to the reality and do the right thing.
Declare Bankruptcy, pay your dues and start over.
And in fact, despite the massive efforts of clever debt-for-profit institutions, people figure this out.
And now we are seeing bankruptcies in record numbers. Over a million anticipated for this year alone, and the real crisis, the one that affects regular people---the ones without jumbo jets, golden parachutes and private equity funds----is hardly underway yet.
This is going to be a roller coaster ride, both for the economy and for the regular folks.