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OpEdNews Op Eds    H3'ed 5/17/09

As the Economy Worsens, A New America Is Emerging, Part 1

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Follow Me on Twitter     Message William Cormier

During the last year or two, I have watched America’s “Corapacy” take out their losses out on the public rather than using tried and true methods that enhance profitability that have a propensity to stabilize the economy in general; Greed, a message that tells America that we “don’t count” is now the standard rather than an aberration. Even if the economy is on the uptake, which I doubt, the unintended consequences of this assault on our economy are far from over. If you believe the economy is recovering, think again - it’s only getting worse and the aftermath of this assault on America is another notch on the belt of America’s ongoing class war.

April was a surprise, and Foreclosures in April exceeded even March’s blistering pace with a record 342,000 homes receiving notices of default, auction notices or undergoing bank repossessions, according to a regular industry report. In another shock to those who believed the market was recovering, Total store sales register a surprise decline. Sales excluding auto purchases also fall. Thousands upon thousands of Americans are still losing their jobs, and as they do, the widening class gap in the United States grows every day.

The “unintended consequences” I’m speaking of is the credit ratings of people who have lost almost everything while they watched their lifetime jobs being sent off to China, India, and anywhere else that would add to the Corapacy’s bottom-line. The consumer only counts in commercials - and now millions of us that once had good credit couldn’t buy anything except through “special finance” programs where the lender charges exorbitant interest rates. Those of them that have maintained their good credit throughout their lives are now falling into the chasm of poverty - where payments are so high based on their credit rating they can only afford the purchase of sub-standard goods which often cost more to maintain than a new item. This is particularly dominant in the automobile business, a necessity to the bulk of people that work in today’s society. Pay as you go lots and Title Pawn Companies are flourishing, and in the process, are cutting deeply into the income of those who can least afford it.

Second-class America is growing at an alarming rate, and will continue to do so until Washington makes a cohesive decision to quit outsourcing valuable jobs in our own country and send Americans into poverty for the good of the Corapacy - not the people. As we watch the foreclosure cycle taking its toll, ask yourself who can qualify to buy a home that has one or two minimum wage jobs, and to make it worse, their credit rating is in tatters? Crawling out of the “bad credit hole” is lengthy and expensive, so even if the economy rebounds tomorrow, the Carpetbaggers will be out in full force, making absurd amounts of money from people that only two or three years ago had excellent credit scores. Many of the foreclosures were caused by people without the resources to purchase property whom were wooed by lower payments and inadequacies in federal safeguards - and whether these variable-rate mortgages were fully disclosed is a matter of speculation, although under the law, complete disclosure is mandated. Others who have had a lifetime history of working and good credit have watched their jobs disappear, through no fault of their own and now find themselves destitute - hoping they can at least keep their families fed and clothed.

As we and others predicted months ago, the second wave of losses is about to hit America’s banking and financial system. Credit Card defaults are at record highs:

Advanta says will stop lending, shares sink

Tue May 12, 2009 8:22pm BST

* Advanta will stop lending next month

* Company has lost access to main funding source

* Shares fall 27 percent in afternoon trading

NEW YORK, May 12 (Reuters) - Advanta Corp, (ADVNB.O: Quote, Profile, Research) a company that issues credit cards to small businesses, is not making new loans after defaults surged and it lost access to its main source of funding, and its shares fell 27 percent.

The company said in a release late Monday that it will shut down about 1 million credit card accounts on June 10, when it expects to lose access to the securitization trust it uses to sell credit card loans to investors.

The suburban Philadelphia-based company will also use up to $1.4 billion to buy back debt issued by its main securitization trust, at 65 cents to 75 cents on the dollar.

Advanta will also make a cash offer for $100 million in trust preferred securities at 20 cents on the dollar.

U.S. credit card defaults rose in March to new record highs, as more Americans lost their jobs amid the worst recession since World War Two.
(Emphasis added.) MORE

The real problem with Advanta canceling their lending is that they primarily loan to small businesses, many of who have found their credit sources disappearing as fast as their bottom-lines… Even though it was OUR money that supported “corporations that were too big to fail,” several of the recipients of TARP Funds are still refusing to fund America’s small businesses as they hoard their money to make new acquisitions. Advanta states they will be closing approximately “1 million credit card accounts on June 10.” In simple terms, a million small businesses will be scrambling to procure new sources of credit - and since they aren’t “too big to fall,” many of America’s small businesses are likely to be swept away - opening up our markets to even more goods that have been off-shored and further raising the nation’s unemployment figures. (It’s extremely important to note that many of these small businesses aren’t really that small; some employ hundreds, and in some cases, thousands. Strangling America’s small businesses is good news for the Corapacy and bad news for Americans.

If you read today’s news, the “Government says 637,000 people filed for first-time unemployment benefits last week. Continuing claims at all-time high for 15th week in a row.” Add that to the news that Chrysler plans to close 789 dealerships - with General Motors stating “it wants to cut 42% of its dealership base to 3,600 by next year. Fritz Henderson, the GM chief executive, said on Monday that it would soon start notifying dealers as soon as this week.”

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My Bio is as varied as my life. In 2012, my twin sons murdered a Journalist in Pensacola, Fl., for 100K worth of "Magic The Gathering" playing cards and buried the body in my backyard. I was once a regular writer here, but PTSD from my son's (more...)

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