Economically Speaking

posted by The Vidiot @ 2:47 PM Permalink

Thanks again to the boys for making sure this blog doesn't become a blogweb. (Does that sound right? Blogweb? Is it possible I found the only word-hybrid using the word 'blog' that doesn't work??)

Mr. Vidiot and I were in Toronto doing research for his dissertation on the Pentecostal movement. I know, Pentecostalism and Toronto, doesn't really seem like it would mix, but the Pastor he's working with here in Brooklyn was going there on a mission trip so we decided to go up to see what it was he does on these mission things. (Yes, they tried to "save" us... again, to no avail I'm afraid.)

One thing we were astounded by in Toronto, besides the fact that it's New York City lite -- all of the diversity and none of the angst -- were the prices. Used to be you'd go to Canada and it would be "wow, it's so cheap here" and now, not so much. The prices there were always high in Canadian dollars, but now that the US dollar is almost at parity with the Canadian dollar (~$1.05 Canadian to $1 USD), well, those high prices? You're actually paying those high prices now. It really hit home the fact that all the printing of money the fed has been doing hasn't created inflation so much as it has decreased the purchasing power of the dollar. That's a much more realistic way of looking at the problem. Inflation is sort of abstract. Decreasing the purchasing power is real.

Anyway, on the way back we were once again assaulted at the border. Going into Canada, they're all, "have a nice day, ay?" But coming back this way is just nasty. The traffic was horrendous and the border guard was mean. Not to mention we flew into Buffalo and the assault at the airport was even worse. First, they make you wait in this horrendous line, then they make most of the people go through those drug/bomb sniffing things where you stand there and it pops some air at you and sniffs what comes off of you. (What if someone passed a little gas right at the moment... Do you see where my mind goes sometimes? It's pathetic.) We didn't feel like going through that so instead, we went through the regular line. Unfortunately, the guy who searched our bags apparently doesn't have much of a life and decided to steal our deodorant crystal. Now, we took the crystal instead of the liquid deodorant because it WASN'T liquid, hence, within the guidelines. This asshole however decided to punish us for not using the clear baggy to hold our miscellaneous liquids. Honestly, he did! We tried to explain to him that it was just a crystal, explained to him how it worked, even knocked the thing on the table to show him it was so NOT a liquid and his response was, "you didn't make any effort to follow any of the rules and you want to start an argument about this?" and he said it with quite a punitive tone. We had to give up the $10 crystal and nearly missed our flight.

Fly the friendly skies. Feel like a felon.

I swear, I just don't want to fly any more.

Well, if the economy continues to tank, we may not be able to afford to anyway. There is a crash underway to be sure.

Excerpt: The immediate triggers are being described quite well: the collapse of the U.S. subprime mortgage market; the vulnerability of the rest of the economy to the subprime undertow, due to the "efficiency" of the markets in spreading risk; the worldwide overextension of cheap credit; the failure of large institutional investors and Wall Street brokerages to behave responsibly; and the long-term effects of the U.S. trade and fiscal deficits which are now coming home to roost.

Just how bad or controlled the crash will be is yet to be seen. But the little guy, us 'proles', will lose big. Foreclosures are happening more and more often.

Excerpt; RealtyTrac, an online marketplace for repossessed properties, showed US home foreclosures jumped 9% in July from June, and 93% on a year ago.

That's right. Foreclosures have nearly doubled in the last year. And those folks who suffer the indignity of losing their homes have an even bigger indignity waiting for them: A tax bill for the amount of their mortgage that was forgiven by the bank and not cleared by bankruptcy.

Excerpt: Foreclosure is one way that beleaguered homeowners can fall into this tax trap. The other is when homeowners are forced to sell their homes for less than the value of the mortgage. If the lender forgives that difference, they are liable for income taxes on that amount.

The 1099 shortfall, as it is called, stems from an Internal Revenue Service policy that treats forgiven debt of all types as income even if the taxpayer has nothing tangible to show for it, unless the debt is canceled through bankruptcy.

Charming. So not only did one slimy and greedy system set them up for a fall, another slimy and greedy system kicks them after they fall. Well, not so much as a kick as it is an eye-gouging, compound fracture inducing, internal bleeding producing sort of attack.

Meanwhile, folks are outraged, OUTRAGED I TELL YOU, over the fact that Michael Vick was cruel to a few animals when their own government is even more cruel to millions of human beings on an constant basis.

THAT just leaves me speechless.

Labels: Economy, foreclosures