Chew On This

I filled up the old gas tank yesterday, almost $55 to fill a 16-gallon tank. Profits at Enron continue to soar. A local, long-time bank in Cleveland seemed poised on the acquisition block for a while. The former CFO bailed out a few years ago with more than a $40-million buyout, the local paper claimed. A group of investors swarmed in and pumped millions into the rescue. They got shares in return that will eventually return the favor to them.

Lynn Adler, in the Yahoo News Web page on April 15, 2008, reported from the real estate data firm RealtyTrac: “Home foreclosure filings surged 57 percent in the 12-month period ended in March, and bank repossessions soared 129 percent from a year ago, as homeowners struggled to make mortgage payments. For the month of March, foreclosure filings, default notices, auction sale notices and bank repossessions rose 5 percent, led by Nevada, California and Florida.”

Foreclosure Frenzy

Let this one settle in for a minute: “What we’re really looking at is ongoing fallout from people overextending themselves to buy homes they couldn’t afford and using highly toxic loan products to get into the houses in the first place,” said Rick Sharga, vice president of marketing at RealtyTrac. “We’re going to see quite possibly a record amount of foreclosure activity in the third or fourth quarter, reflecting sharp payment increases on adjustable-rate subprime mortgages in May and June.”

Oh, things are just getting warmed up here. Adler further submitted this gem:

“One in every 538 U.S. households living in single-family dwellings received a foreclosure filing in March. The states with the highest foreclosure filing rates–Nevada, California and Florida–also are among those that had the biggest price appreciation in the five-year boom before the housing meltdown that began in 2006. These states tend to also be plagued by defaults on unoccupied homes bought by speculative investors. In many cases, home prices have now fallen below the size of the mortgages, and some owners are walking away. In Nevada, one in every 139 households received a foreclosure filing in March, keeping the state at the top of the ranks for the 15th straight month.”

Social Insecurity

Have you had enough? Consider this from Yahoo by Pedro Nicolaci da Costa, submitted Monday, April 14, 2008, regarding Gen Xers and the future.

More than two thirds of Americans ages 27 to 42 believe they will never be able to stop working, according to a survey published jointly on Monday by Scottrade and Better Investing. Of the 1,000 respondents 18 and older polled in early January, 40 percent said they had saved less than $25,000 for retirement. For perspective, someone who envisions 20 years of retirement on about $50,000 a year would need to have $1 million stashed away.

Generation Xers are well aware of this need, the survey found. In fact, 37 percent said they would like to have between $1 million to $5 million saved for retirement–yet 21 percent said they have yet to begin saving. Da Costa continued, “This concern is largely the result of a barrage of negative media coverage about the entitlement system as a demographic time-bomb that will become more difficult to fund as older folks start to outnumber the young.”

Preying On Ourselves

Here is my analysis. Our ignorance, greed, confusion, self-delusion and selfishness are at epic levels, and the only ones delivering the pain and suffering are ourselves! We prattle on about the enemy abroad–ha! The enemy lies right within our borders, and it didn’t sneak over the fence or float ashore in the darkness of night. We’re doing it to ourselves.

Martin Crutsinger, economics writer for the Associated Press, reported April 18, 2008: “Turmoil in credit and housing markets will be the most significant threat to growth this year, according to a survey of top financial company executives released Friday. These executives believe there is a high probability–88 percent–that the country will suffer a recession in the next 12 months. The responses came from executives whose firms are members of the Financial Services Forum, which represents 20 of the largest financial companies in the country, including Bank of America, JP Morgan Chase, Goldman Sachs, Merrill Lynch, Allstate Insurance and Fidelity Investments.”

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