Foreclosures were up 30% in February, but an important group of Americans remains sidelined in the current tug-of-war between the bailout cheerleaders and those fiscal conservatives ready for a new tea party. They aren’t the whiners standing on their homes refusing to leave after borrowing more than they could afford, and yet, they aren’t a part of the justifiably angry American mob forced to strap on a load for their shortsighted house-flipping neighbor.
They are the forgotten ones.
They are the lower deck passengers on the Titanic, who by no fault of their own, bought a ticket, er, a house, when destiny had set an iceberg in the name of Fannie, Freddie and Barney Frank in their road.
Homebuyers who purchased a house in 2002 or 2003, who’ve had to relocate for work or personal reasons, qualify. Perhaps they have been forced to default on their homes and blacken their credit for the very first time. And no journalist, action group or even the President has mentioned what will happen to them.
As the statistics continue to shock, regular Americans with good credit are facing an inescapable reality—ditch the house or keep the 763 credit score. At the end of last year, 12% of all mortgage holders were at least a month late on their house payments or in foreclosure. Just how many of those 5.4 million homeowners were formerly upstanding borrowers but simply caught in an impossible situation? They didn’t buy too much house and they didn’t do a $60,000 bathroom remodel with a sauna, Jacuzzi and a flat-screen overhead. They simply bought at the wrong time and were forced to move at the wrong time.
While Citi and Bank of America are considered to big to fail, everyday Americans who were unlucky enough to get caught in the crisis will be forced to pay for a very long time. Their credit score qualifies for used car lenders who scream ‘bad credit ok’ and little else, while Citi and BoA’s reckless decision making has garnered not a single negative consequence, apart from Uncle Sam approving which five star resort will hold their conferences. Maybe they’ll have to endure a four and a half star hotel without the private Sheryl Crow concert and forgo the private golf clinic with David Leadbetter. Poor things…
But what will become of those ’02, ’03 Titanic lower-deckers? Will their credit remain ruined, and if so, won’t these same irresponsible banks miss out on a large opportunity for profit?
Last night on Italy’s Lake of Como, eighty Barclay’s bankers and clients gathered together in the storied Villa Erba to celebrate with their fiddles as Rome continued burning around them. And while the paparazzi wary bankers spent two days and 700,000 Euros, the British Prime Minister traveled across Britain to sell his rescue package to hardworking British voters.
The bankers banned the paparazzi, but not the Greco di Tufo wine, ricotta stuffed ravioli, fillet of Brunello, apple pastry and chocolate mousse. Their sacrifice of the evening was to forgo a planned trip to La Scala, ostensibly due to the 13 percent of company value lost that day, but in reality, they wanted to avoid the aggressive paparazzi that would have been free to snap away in front of the legendary opera house.
It wasn’t just a once a year broker-client excursion. Just last week the oblivious bankers enjoyed a week in one of the Cote d’Azur’s finest hotels priced at around three thousand Euros per night.
The fury over the trips has little to do with class envy and everything to do with discretion. Hopefully, these Neros will be awakened to the reality of the global economic inferno, ignited by financial institutions like Barclay’s.
Posted in economía, economy, Italy, Money, news, Politics, travel
Tagged bailout, bank, bankers, banking, barclay's, barclay's managers, barclay's stock, British Prime Minister, brokers, clients, company value, depression, european banking, european markets, global crisis, global depression, global financial crisis, global recession, Gordon Brown, lost value, party, recession, rescue package, stock loss, stock market, stock market crash, stock value, UK, vacation
My Italian father-in-law and I used to argue over cultural and political differences between Italy and the U.S. He would issue a charge, I would deny it, and a debate would inevitably ensue. In one of our early debates, he warned me: “your economy (the U.S. economy) will collapse once its debtors begin calling in their chips.” We overuse credit cards, spend more than we can afford and consider ‘budget’ a dirty word, he would always say.
If this credit crisis has taught me anything, it has showed me that his assessment was pretty accurate. The saddest part isn’t his vindication or that I have to admit, once again, he was right… It’s that we haven’t learned. Just this weekend, while watching an Italian soccer match, an advertisement flashed across the bottom of the screen:
Your country needs you. Help the economy and spend your government stimulus. Check out cool gear at Foxsoccershop.com
Appealing to the patriotism of Americans by encouraging them to spend their government checks is appalling. Most of the blame, however, belongs to the President and politicians who, by their actions, have continued to promote our irresponsibility by implying that the best action we can take, to recover from this credit crisis, is to spend more. Isn’t that what brought us recession and foreclosures? Shouldn’t they be promoting saving, conservation and paying off our debts? If they need to give a economy a boost, why not cut the corporate tax rate? How about addressing the affordability of healthcare, the ballooning price of oil as it relates to a pathetically weak dollar and the out-of-control federal spending that has created the dollar crisis?
Why do we, as Americans, need to act irresponsibly to cure what Washington has created? Me, I’ll be banking my stimulus check to start a trend, a trend I hope other Americans continue. Spend only what you can afford and save for that rainy day you know is coming.
Posted in Conservative, democrat, Liberal, news, Politics, Republican
Tagged budget, Bush, checks, Congress, debt, economic, economic stimulus, patriot, recession, save, spend, stimulus, stimulus checks