Stay Calm, Remain in Your Homes

This is standard advice in times of emergency.  The principle is simple and logical. Authorities are dealing with limited resources in a critical environment where every second counts.  The fewer events and people they need to deal with, the more effective they can be.

If you know me, you know that I am upbeat and positive by temperament and challenges don’t faze me.  I’m pretty level-headed, and I do my own thinking.  Though curious by nature, I don’t give much credence to conspiracy theories and usually can explain away most government ineffectiveness by mind boggling stacks of stupidity heaped upon layers of incompetence.

Lately, however, I have been starting to wonder just who is involved in shaping the events of our time.  Is there really a plan to swap our prosperity and independence in favor of global profiteering and the new world order?

First, we exported manufacturing so that other nations, even our enemies, wound up with our jobs.  Ross Perot warned us of the plot behind NAFTA.  We have allowed all of the power to fall to a handful of global elitists who profit from failure and misery.

Consider the implications of this; there are fewer Americans with jobs than in 2000 but there are eleven million more workers. Nearly fourteen million are officially unemployed and the number of people who have given up looking for work, the self-employed owners of failed businesses don’t even show up in that.

According to Stars and Stripes, “In January, the unemployment rate among vets between the ages of 20 and 24 was 24.1 percent, compared with 17.7 percent for the same age group in the general population.

Recent college grads are entering the workforce at a time when employers project they will be hiring 22% fewer college graduates this year.

And now, with increasing frequency, the unintended consequences of a global asset bubble are coming home to roost.  And, there is no stopping them.

The convergence of numerous events is creating what I fear will be emergency type conditions that will become routine for many Americans.  Think post Katrina, soon playing in cities everywhere.

According to The National Energy Assistance Directors’ Association, 8.9 million households are expected to qualify for financial help to heat their homes this winter, up from 8.3 million last winter.  It’s the third year in a row the number of households needing assistance has set a new high.  Nearly nine million people are having difficulty just staying warm.

By now, if you haven’t felt it directly, someone close to you has; a dramatic downturn in the quality of life, for many, a complete reversal of fortune.  Whether we feel bad for them or are happy to see their decline instead of ours, their loss of prosperity erodes the prosperity of everyone.  They go from contributor to the community to a drain on the community.  Many are boomers who worked all of their lives and are now seeing their golden years turn to rust.

The pension funds they contributed to have been looted by financial intermediaries, and although many of the funds are going to court, there isn’t enough money on the planet to pay back the shortfall.  The institutions they are seeking relief from are technically insolvent.  And, the device intended to protect pensions, the Pension Benefit Guarantee Corporation, is upside down and sinking.

According to the Washington Post, “During fiscal year 2010, the PBGC paid $5.6 billion in benefits to participants of failed pension plans.  That year, 147 pension plans failed, and the PBGC’s deficit increased 4.5 percent to $23 billion.  The PBGC has a total of $102.5 billion in obligations and $79.5 billion in assets.”

And, it’s only starting.  It will get worse every year until there will be no way to bridge the gap.  The PBGC only insures one in seven pensions; the rest may have no recourse whatsoever.

We must remind ourselves that we aren’t talking about the effects of just mortgage securitization, but a massive global Ponzi scheme that leveraged bad and even nonexistent debt instruments into the biggest transfer of wealth in history.

And, it goes on.

The money, a lot of American household net worth combined with an amount equivalent to the national debt, is stashed in off shore accounts and beyond the reach of recovery.

Equity in boomers’ real estate holdings has been systematically stripped by the leveraging up of appraisals followed by the pushing down to affect more strategic defaults.  And, it’s working.  One quarter of all homes are worth less than is owed on them.  That didn’t happen by accident, it was part of a business plan.

Where will these boomers go to live when they have no money?  What choice do they have?  They will be in tax payer funded shelters and tent cities with communities struggling to pay the medical costs of this aging poverty class.  It will be expensive and unpleasant.

Nationwide, six million families have lost their homes as a result of an international Ponzi scheme.  The myth is that after that they “rented an apartment that they could afford” and lived happily ever after…within their means.

The major impediments to this rosy scenario are lack of income, bad credit, kids and pets.  Fortunately, government has been working on a large part of the housing problem with a mind-boggling prison construction program.

All of this will have a negative trickle-down effect on everyone.  Note how life changing emergencies may have recently resulted from a lack of resources for mental health care and probation follow-up.  We knew the individuals had problems, but there is no funding to treat them.

Predictions of State and Cities financial collapse are being forewarned by layoffs in the most protected jobs, teachers and emergency responders.

The total neglect of our infrastructure during our false prosperity is now colliding with our ability to even make emergency repairs, as evidenced by the collapse of a relatively new bridge in Minneapolis.  Things are starting to get that third world feel.  Parks are being closed or ignored, codes aren’t being enforced, pot-holes don’t get filled, and trash blows through the weedy parking lots of long ago whitewashed shops.

In Vista, California, where years of financial mismanagement have led to a severe budget shortfall, emergency workers are telling the public to expect longer response times due to a reduction in the number of ambulances.  We have them; we just can’t afford to use them.

In March, the city will turn out the street lights.  So, at a time when we have fewer resources to respond, life will be getting a lot more dangerous for residents and visitors. Not that it matters, I recently dialed 911 to report an accident to which I was the only witness.  According to the call timer on my cell phone, it was nine minutes until they answered.

Cities are primarily dependent on property and sales taxes, and when property values were rising and consumers were spending, Vista administration went on a spending spree and hired all of their friends, built new buildings, and put tax payer’s money into an ill-advised, redevelopment scheme.

Some of the jobs have survived despite the fact that the city no longer performs the function the individual carries out.

The first step was to eliminate the services that all of those people were hired to deliver. A perfect example was Vista’s sign compliance program.  Several staff were hired, and for two years they photographed and cataloged commercial signage that was out of compliance with the code.

But, now that all of the preliminary work is done and paid for, the compliance part of the program was scrapped because there was no money to pay for it.

Given the size of the budget shortfall in Vista, the only alternative is a massive reduction in wages and benefits.  Cuts in senior administration aren’t likely so that means that city workers, the people who actually do anything, the lowest paid and most vulnerable, will be let go first.

Most communities are facing these same problems, but some are better prepared than others.  Those that failed to prepare for a decline in revenue will soon be switching to crisis mode.  The numbers tell the tale.  And, until we come up with 11 million jobs and stop evicting families from their homes, things won’t get better.

We are facing a crisis that is already tearing at the principals on which this country was founded.  Due process is routinely being denied in cases where borrowers have proof that documents were forged.

Stay calm, remain in your home.  The last thing that any of us needs is to have these unlawful foreclosures continue.   Even if you have been foreclosed on, do everything you can to stay in your home.  You do not want to be out on the street, and we don’t need any more vacant houses.  In San Bernardino, Buffalo, Detroit, and Chicago the banks aren’t bothering to take title to the property.

What should you do?  Do what authorities always advise in terms of emergency. Remain calm, stay in your home…no matter what.  Do not let them take your home. Every day you can remain in your home is another day to get closer to long term relief.

The unlawful foreclosures taking place in America’s communities are compounding an already dire situation.  It doesn’t need to continue.  We must all resist the efforts by unknown foreign entities to steal our homes.

You must fight your own fight, but you needn’t fight alone.  You must learn everything you can about your own situation, but the information you need is all available on my blog.

If you won’t join the movement in the streets, join it here, at Protect Americas Dream  If you will not draw a line in the sand, draw one at your front door.

Never give up.  The very worst thing anyone can do is surrender their home without resistance.  Stay calm, remain in your home.

George W. Mantor
The Real Estate Professor
Founder, American Foreclosure Resistance Movement