StopTheSqueeze.org Newsletter - Americans For Debt Relief Now!

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-- 10 October 2007 --

IT’S YOUR TURN TO ACT.

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OCTOBER 10: 2007: This is the Stop the Squeeze newsletter. We are concerned about the economic welfare of Americans. Many people who envy our wealth and strength are not familiar with some basic facts about how the majority of us live—not just the affluent minority but the struggling majority. Tom Erickson sent me some facts, some statistics, to help us explain in a stark way why debt is such a cutting edge issue.

Before I get into the news since our last newsletter, let’s start with some basics:

WHERE WE STAND

81 percent of the voters [last November] told exit pollsters they had just enough to get by financially or were falling behind.

68 percent thought the next generation would have it worse.
Average real incomes fell by 3 percent between 2000 and 2004.
From 1979 to 2004, the bottom 60 percent of Americans, on average, made less than 95 cents in 2004 for each dollar they reported in 1979.

For those on the top 95th to 99th percentile of the income spectrum, their income went up 53 percent. And income for those on the top 0.1 percentile went up 348 percent.

In 2004, the poorest 60 million Americans reported average incomes of less than $7 a day!
46.6 percent of all American households average a net worth of less than $10,000.
The net worth of the top 1 percent averages $14.8 million.
In 2004, the median black household had a net worth of $11,800, or just 10 percent of the corresponding white figure for whites.
57 percent of those with incomes less than $20,000 said they had not enough money to afford needed health care at times in the past year.
43 percent of those with incomes less than $20,000 said
they didn’t have enough money for food!
In 2006, 18 percent of all Americans reported not having enough money to buy food for their families during the past year.
23 percent of Americans said they had problems paying their medical bills, and of those, 60 percent actually had health insurance.
29 percent of adults reported that they or someone in their household skipped medical treatment, cut pills, or did not fill a prescription in the last year because of the cost.

Pretty depressing, hey? It makes me angry—how about you? Here’s the news you probably never read the way I explain it.

MARKETS LOVE GOOD NEWS

Markets love good news---and at the slightest hint of a positive development, all the bulls start pumping themselves up as if all the other issues that we have been raising had disappeared—i.e. the growing national debt, the mounting consumer debt, the subprime crisis etc.

Last Friday the jobs figures came out, and suddenly, all the dark scenarios of economic decline were put back in the media closet. Check out how this works. The Emphasis is of course on how stocks bounced back. I wrote about this sham in more detail on Mediachannel.org.

Here’s Marketwatch.com to remind you of what happened.

NEW YORK (MarketWatch) -- U.S. stocks bounced higher Friday, with the S&P reaching an all-time high and the major indexes scoring solid weekly gains, after the much-awaited jobs report offered as-expected growth in September and a surprise upward revision to past counts, calming worries about the economy.

"For the time being, the sense is the sky is not falling. We have a major concern about the magnitude of the slowdown in the U.S. economy, so this is clearly good news," said Art Hogan, chief market strategist at Jefferies & Co

That seems to be the headline: “THE SKY IS NOT FALLING” Never mind the millions of Americans due to lose their homes for whom the sky is falling.Senator Chris Dodd, the Chairman of the Senate Banking Committee said last week that the subprime plague is a “fifty state Katrina.”

In fact, as CNN reported, “DANGER LURKS”: “Job loss erased, but danger lurks. Report wipes away earlier loss but shows private sector reductions that could prompt the Fed to cut rates again.”

Thomson Financial explained that jobs in the corporate world DID NOT go up---only government jobs. (Could this be another case of socialism saving capitalism?)

Ashraf Laidi at CMC Markets notes that the large upward revision in August was due almost exclusively to government jobs.

He acknowledges that the likelihood of an October rate cut -- given a 75 pct chance by markets before the data -- has diminished, but also notes that the jobs report denotes a weakening economy.

So there you have it, what’s reported at first as a strong economy gets downgraded once people think about it to a “weakening economy.”

It never happens in time to change the Initial IMPRESSION of economic recovery. What about the other stories that remind us that banks are writing off billions in earnings because of their crooked loan policies---CitiBank, Deutsche Bank, UBS and Merrill—over 15 billion with more still to come.

Other articles that cast another light on this story:
CNN reported Friday :

“NEW YORK (CNNMoney.com) -- The cost of the subprime crisis continues to mount on Wall Street.

To date, the total stands at nearly $20 billion.”

And then there were these stories about the job situation:

Jobs Report Misses Growing Number of Contractors

JOBS REPORT MAY SHOW HOW BAD THE ECONOMY IS

Payroll Playbook: Is Bernanke in Control?

Employment Numbers Weaker Than Reported

When the Housing Panic Blog takes into account the fall in the VALUE of homes as the market drops, we are talking about TRILLIONS in losses for homeowners:

“,,,, they’re only dealing with subprime, when we all know that trillions of dollars of true housing “wealth” has already disappeared if home debtors’ loans were truly “marked to market”, and it’s just gonna get worse. CEPR estimates $8 trillion for starters.”

Did you read that: It says Americans have lost TRILLIONS!!!!

So, you see, it all depends on your angle of vision. If you are mostly concerned about the well-being of the banks and bankers, you focus one way; when you are concerned with the well being or the debt-trapped millions, you write another way.

You know things are not good when the VULTURES show up—these are the investors who seek to profit on your misery. CNN reports: “Real estate investors are betting on bargains in depressed markets they think are ready to bounce back.”

The Common Sense Forecaster sums up this market madness this way:

It is now clear that the housing market is in free fall. When commentators start saying things like the market will not turn around for another 12 – 24 months or existing house owners need to drop their prices to move their houses, things are not good and are not getting better next week. Capital markets, except for the very high-grade debt, continue to struggle with liquidity and confidence issues.

Banks, both in the US and overseas, and investment banks are beginning to report large losses due to the write down of mortgage debt. Job creation is slow in the US. The Dollar is reaching all time lows against the Euro. Other countries are beginning to relinquish their need to hold US Treasuries as a reserve currency.

EUROPE IS WORRIED; FEAR THEY WILL BE DRAGGED DOWN BY THE US:

BRUSSELS, Belgium (AP) -- European Union finance ministers open two days of talks Monday to discuss the United States' slowing economy, feeble dollar and massive current account deficit as major problems for the EU and the rest of the world.

WHAT ABOUT THE COST OF THE IRAQ WAR?

It is running over $450 BILLION. I watched a Congressman from Massachusetts on CSPAN assert. “We have no way of paying this. We are bankrupt.” That’s quite an admission.

EX-PRISONERS SADDLED WITH DEBT

While people are theoretically no longer imprisoned because of their debts—but usually only for not heeding court orders seeking debt payments—ex prisoners are being saddled with debt as the NY Times noted editorially:

With the nation’s incarcerated population at 2.1 million and growing — and corrections costs topping $60 billion a year — states are rightly looking for ways to keep people from coming back to prison once they get out. Programs that help ex-offenders find jobs, housing, mental health care and drug treatment are part of the solution. States must also end the Dickensian practice of saddling ex-offenders with crushing debt that they can never hope to pay off and that drives many of them right back to prison.

The scope of the ex-offender debt problem is outlined in a new study commissioned by the Justice Department’s Bureau of Justice Assistance and produced by the Council of State Governments’ Justice Center. The study, “Repaying Debts,” describes cases of newly released inmates who have been greeted with as much as $25,000 in debt the moment they step outside the prison gate. That’s a lot to owe for most people, but it can be insurmountable for ex-offenders who often have no assets and whose poor educations and criminal records prevent them from landing well-paying jobs.

Comments Clifford Thornton: “This is the never ending domino effect--now, think about how this affects the children, some million and half today and some ten-fifteen over the almost four decades of this diabolical drug war, the double jeopardy of taking a potential tax earner out of the community and then having us pay taxes to keep them locked up--most of these are prisoners with drug related charges—yet we still elect those people that will not even talk about it.

CANADIAN NEWSPAPER SEES UNDERLYING PROBLEM AS MORTGAGE FRAUD

At its root is a U.S. investment-banking and mortgage-brokerage system that's broken, had little government oversight and was rife with crooks. Last, but not least, most will get away with this because the globalization of capital markets allowed them to export the crime to Canada, Britain, Europe and elsewhere. Read more about it...

CREDIT CARD PROBLEMS: Bank fraud drops, card fraud up
Web User reports:

Credit card fraud in the UK has risen by 26 per cent Banking fraud in the UK dropped dramatically in the first half of 2007, though credit card fraud rose.

Figures released by the Association of Payment and Clearing Services (APACS) show that though online banking fraud dropped by 67 per cent in in the first six months of 2007 compared to the first half of 2006, there was a 42 per cent increase in phishing incidents.

Credit card fraud rose 26 per cent in the same period and this was largely down to a phenomenon known as card not present, or CNP, fraud.

CNP fraud happens when payments are made without the retailer seeing the card being used, such as when items are bought online or over the phone.

Many lenders are using this ploy to extort additional profits by systematically demanding late fees which are not due or which arise from the lender's policy of deliberately delaying the processing of payments until after they are due.

Moe writes to say American homes are beings stolen by lenders:

They continue to fleece the good people and homeowners of this country and it needs to stop.

They place you in a toxic, cancerous mortgage you cannot get out of, and then when you try and get help from them, they charge you fees and late charges. They profited from selling you that hideous loan and now they profit from your misery because you cannot find relief.

I wrote about this on my blog, "The Great American Homeowner Swindle."

Great job for not caving into their demands. Just think what many people that are not as strong and savvy as you are going through? It's a sad American story that needs to be heard and told.

Hopefully we will get more homeowners involved like you are and contribute their stories.

I can tell you right now that this forum and blog is getting a lot of attention and their are some very influential people that are now visiting my websites.

HERE’S WHAT THE STATES SHOULD BE DOING

Mass. AG sues subprime lender:

Massachusetts Attorney General Martha Coakley this morning announced that her office has filed suit against Fremont Investment & Loan, a California company that was one of the largest subprime lenders in the Bay State.

Coakley charged Fremont with "engaging in predatory lending in Massachusetts" by taking advantage of borrowers through a broker-fueled system that compensated them with commissions but left their customers with mortgages they could not afford to pay.

A Fremont spokesman said a response was not immediately available.

The attorney general is seeking civil penalties and restitution to borrowers.

"Fremont issued thousands of subprime loans, with multiple layers of risk, through mortgage brokers who regularly provided Fremont with false information that Fremont intentionally, recklessly or negligently failed to verify or audit," said the suit, filed in Suffolk Superior Court.

WHAT THEY SAY ABOUT THE DANGERS OF A DEPRESSION?

And finally, have you noticed that the Christmas Shopping Season is being moved up to get consumers back into the stores with deep discounting. They are starting in October this year, a sign of growing panic in the retail sector. The big retailers know that consumer confidence is way down and fear that people will stop shopping, compounding already serious economic situation. NBC had a big feature on this on Tuesday with CNBC’s Jim Cramer cheerleading for the economy, calling for another rate cut by the FED, and minimizing the subprime problem. No one mentioned that NBC and the other networks rely on consumer advertising and have a big stake in keeping us buying, buying, buying.

That’s the Stop The Squeeze News this week. It’s time to stop reading the news and start making them by standing up for our economic rights and fairness for all.

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