As noted in another thread, this could be an oblique data point - those losing all their goods because they can't afford storage after foreclosure are definitely not 'walk aways' as generally considered by the authors of this blog.
What is strange is to see how distorted these people must view their life - goods worth the money to store, but not worth the money to keep.
Even stranger, goods they consider valuable enough to spend money to keep, but worthless when an urgent need for cash exists.
Something sadly pitiful about this, in a way that the pawn shop stories don't begin to approach.
Somewhat OT, but I was shocked to see a front page AP article in the local Sunday paper on how the most recent "positive" economic news might not be so positive. The writer actually took the time to look into the data beyond the official pronounciations. Shocking.
OT -- from 'The Lost Tradition of Biblical Debt Cancellations':
"...The Liberty Bell is inscribed with a quotation from Leviticus 25:10: "Proclaim liberty throughout all the land, and to all the inhabitants thereof." Over the years these words have suggested to visitors such diverse ideas as our democratic freedom to vote and the American Revolution's slogan of no taxation without representation. But the full verse in Leviticus speaks of freeing debt bondsmen. It exhorts the Israelites to "hallow the fiftieth year, and proclaim liberty throughout all the land and to all the inhabitants thereof; it shall be a Jubilee unto you; and ye shall return every man unto his family."
Fascinating. I wager that we see a return of this, a taking from those who unjustly gained and a freeing of those unjustly indebted.
I know a guy who's literally made billions on a storage business. The entire premise of the business is built upon inertia and sentimentality. Inertia: People anticipate that they'll store their stuff for 3 months, but generally store for over three years, thus spending over 4K. What are the chances that what people are storing is actually worth anywhere near that much? Sentimentality: When parents die, people don't want to get rid of their stuff, so the storage units offer some sort of emotional limbo. It's been good for this guy, private jets, homes all over the world, but I think it's kind of a sad business that's built on such false ideas.
I rent workshop space a few miles from the beach where I live. My friend "Bill" lives in a duplex storage unit (two 10'x10's side by side). Bill's rent is $190.00 per month (electricity included)and he showers at the KOA campground down the road. He's got a/c, a small fridge, microwave, and a hotplate. He's very happy, and I like having him there for security reasons. Bill makes his living as part of the "salvage economy", recycling used possessions at the local flea market. A very stress-free life, more power to him.
rent_to_own: "Even stranger, goods they consider valuable enough to spend money to keep, but worthless when an urgent need for cash exists."
This seems like a really good illustration of how people don't actually think and behave like economic models. If they "value" their stuff - in the economic sense - then they should sell it rather than let it be auctioned, as you point out.
But instead they value it sentimentally, because it is theirs. They are fond of their stuff. It is like their family - or at least their pets. Who wants to sell their pet or even be there when it is sold?
And this is why when people say they "can't feel sorry for" people who have made stupid financial decisions, I usually do feel sorry for them. Because they weren't making financial decisions. They were just bumbling along living their lives and they never saw reality coming. I don't necessarily want the government to bail such people out. That doesn't make sense. But I can spare them a moment of compassion.
.
This guy maybe the "Poster Child" for the forclosure crisis?
What do you think?
SeattleSun
California man losing nine homes in mortgage mess (actually 10 if you count the one he lives in)
LOS ANGELES (Reuters) - A California man who has defaulted on nine homes and expects banks to foreclose on all of them, forcing him into bankruptcy, says he now considers it a mistake to have invested in the real estate market.
Shawn Forgaard, a 37-year-old software company project manager, bought one home for his family to live in and nine more as investments. He stands to lose all the investment houses in the mortgage meltdown but says he has come away wiser from the experience.
"Everyone stumbles. I'm not going to hide or run or live in denial, or with regrets," Forgaard told Reuters in an interview. "On the surface it looks like total devastation but it's just the opposite. I'm confident our lives will be much, much richer as a result."
Forgaard bought a house in Santa Cruz, about 60 miles (100 km) south of San Francisco, in 2000. Four years later, using $800,000 in stock options, he began snapping up investment properties, putting 10 percent to 40 percent down on negative amortization loans -- in which payments do not cover the interest so that a borrower's balance grows over time.
It was those "neg-am" loans, which include triggers causing payments to balloon if the debt reaches a certain percentage of the original balance, that would come back to haunt him.
"I knew I was sitting on time bombs," Forgaard said. "I knew the market was going to go soft and I knew that property values would decline. But I figured that I had enough equity to survive the storm and sell or take the loss and refinance.
"I didn't anticipate a downturn of epic proportions such that home values are 40 percent less than they were," he said.
The mortgage market has melted down in the past two years in a crisis that began in the subprime sector and has left millions of Americans facing the possibility of foreclosure on their homes.
lol, the cyberpunk book Snow Crash predicted people living in self-storage.
I was faced with this similar decision at one point - put my 1 bed-room apt worth of stuff in storage for 2-4 years or sell and rebuy later?
Ended up paying ~$1,100 in storage fees so I came out ahead in strictly economic terms, but god damn was nice to have my old crap back and not have to restart from scratch aquiring stuff.
Forgaard said that some good has come out of the experience and that his family is optimistic. He is relieved that he no longer has to deal with 10 homes at once and now will pursue a lifelong dream of starting his own business.
While it's expensive to store lots of stuff for a long time.. it still makes financial sense if you think you are going to have a real place of your own to live even w/in a year or two. I moved overseas and it was worth $10k to me to ship average stuff since to buy it all over again would have been far more costly. Since I wasn't paying by weight, but by the container-load, I brought EVERYthing with me, including food, detergent, balls o'string, old plant pots.. if you really put a price, however small, on that stuff.. it adds up!
Let's say you can sell your year-old $2k couch for $500.. are you going find a decent couch for $500 later without putting lots of in time/gas into the search? These days, can you really efficiently sell 5 sets of used bed sheets, mattress, pillows, etc..? Just my .02.. tho' I can see how people may find themselves in limbo for longer than they imagine.. or never get solvent enough to prevent their stuff from going to auction..
Just finished reading "Down and Out in Paris and London" by George Orwell. It recounted the real hardship of going from rented room to rented room, through bug-ridden flophouses and homeless shelters. Pawnbrokers were the means of selling and buying literally the clothes off one's back; truly hard times. But since people had so little in general, there was still some market for the smallest cast-off.
Virtually everything I had was destroyed in hurricane Andrew, except some stuff we had in a second,
smaller house we had in Brevard County. We were slightly over insured, with replacement value coverage, so all our paperback books were suddenly worth 5 bucks, and we
got policy limits on personal property. even so, when you have to replace every last potato peeler ball of string, all furniture etc etc, you find that even an extravagant amount of money may not suffice.
We drove by one storage place once where the S had fallen off, so now all the storage places are "Elf Storage" to my kids. It actually makes sense in their D&D world...
Not a good place to live in, though. It surprises me a bit that more people aren't figuring out to take in their neighbors who are being foreclosed on, combine incomes and save at least one of the houses. But I guess our society isn't friendly enough for that anymore. It's one reason I think this downturn in housing might last longer, if families collapse back into one home rather than several. A lot of our neighbors are starting to see the 20 something kids straggle back home again right now, when they can't get jobs after college this year...
...25 years ago, when "down and out" folks needed to empty/vacate an apartment, they would call a moving company, sign a contract and ship the stuff to a fictitious address in East Bumpkins, FL...when the mover arrived, no address, no such person...
today, movers demand credit card payment before the furniture goes on the truck if we suspect something "hinky"
now the self storage people will load their stuff, bring it to storage and give the person a free months storage (generally, they must pay for a few months of storage to get the free delivery and the free month of storage)...this is a good deal for a person, who doesn't have much money and just needs to empty the house of what they don't want anymore.....
i find that there a re many folks who procrastinate whehn they are in financial trouble...hence, foreclosure, and, then they suddenly realize they need to empty the place and putting off the hard decision of what do with their stuff for a few months fits right into their decision making process.....they hope they'll get a job or ionherit some money or something will happen which will pull them out of the mess they are in....sometimes it does and sometimes it doesn'
by the way, all professional moving companies have public auctions of unpaid storage lots....it's a great opportunity to get some high end furnishings at a great price....even more fun, is bidding on a lot of 20 boxes (Contents Unknown)...could be Watrerford/could be Gladwrap containers...fun stuff for the adventuresome.....
lidia -
those are several interesting points that you bring up, but these are people who are losing their possessions because they can't afford the storage fees.
Even a pawn shop is a better alternative, at least with goods that are accepted as collateral.
In a sense, at least in the terms of the article, these are people who are paying to lose even more of their material possessions, without any apparent benefit to themselves.
I won't even begin to explore the idea of paying more money to remain encumbered with goods you can't afford in the first place.
This is what I meant about this being disturbing in a way that pawn shop stories aren't - this is far beyond throwing good money after bad, this is not even knowing the value of money when you are down and out, before skidding down to the next step, flat and busted.
Storage has my hopes in it, said Mr. Martin, who sleeps on a foldout bed in his mothers guest room. I dont tell anyone this, but at least once a week I go over and look at my couch, my refrigerator, my TV stand, my mattress and realize I did have a life, and maybe theres a way to go back to it.
It is a sad commentary on Americans' attitudes that an educated man believes his life is defined by a refrigerator, a TV stand, a mattress and other transitory possessions.
I don't usually get spiritual on economics blogs but I wish I could tell this guy that his life consists of his relationships, the health of his body, the knowledge of his mind and his actions. Get off mom's couch and go the library; maybe learn a new skill; or find a new hobby; grab paper and pencil, go for a hike and learn to sketch; walk downtown and volunteer for service at a charity; join the Y and get in shape; find a spiritual community to join. Anything. These are the things that define your worth as a human, not the junk you bought at Walmart or the tract house you parked them in.
If you use it as a starting point for self examination and personal growth it may turn out that moving back to mom's house is a great thing.
A big part of the root cause of the housing bubble and bust is that people define themselves by the objects they own and the shelter they live in. This belief leads to endless cycles of greed and grasping and unhappiness.
It surprises me a bit that more people aren't figuring out to take in their neighbors who are being foreclosed on, combine incomes and save at least one of the houses.
We took in a family of 7 who had lost their house to foreclosure during the recession in the 70's. It wasn't easy but it got both of our families through a rough financial time.
Unfortunately, too many in the current generation facing financial stress think they are each entitled to their own phone, their own bathroom, their own bedroom, their own flat screen, etc. The concept of sharing resources may be beyond many of them.
The garage sales at self storage units are really sad. Generally people who are selling what they can before they quit paying the rent and walk. Yes walking away happens in self storage too. Not an urban legend!
one other thought about people who put stuff in storage:
there are usually "back stories" to the peoples lives, about which we know nothing....as a moving representative, I sometimes feel I am watching a few episodes of a locally televised Soap Opera while I spend a few days in a small town waiting for my car to be repaired.....
many times a seperation/pre divorce situation accompanies a foreclosure...the couple may have experienced a job loss and are now traveling out of state to apply "in person" for a job and plan to send for the furniture once they are hired...maybe there is an illness in addition to the foreclosure...or they think they'll move into their brother's apartment unit in a few months....
then, for some reason the person didn't achieve the job/reconciliation/windfall inheritance that they thought would allow them to get their stuff out of storage....
I realize many of the contributors here think in straight economic terms, and, your analysis sure makes logical sense....
but, most people,THINK they made sensible decisions, and, even when they find their current situation to be worse than before, they can't change their ingrained decision making behaviour, and, continue to make "sensible to them decisions" which many folks deem illogical/stupid...
my favorite experience was a lady, who interviewed me, but selected anouther company to move her..
On her moving day, the young lady called in a panic to ask if we could get her a moving crew immediately as her chosen mover did not show up...My wife, asked her why she did not choose me, and, she said, "You husband was too nice, and I didn't think anyon that nice could be trusted. By the way, Mrs. Beaver, I always seem to make bad decisions. Tomorrow I am getting married, and, I think I have made a bad decsion about my fiancee, also."
I don't know why everyone is getting so surprised about people's attachment to stuff. Stuff is what the American Dream is all about. A house, in fact, is really only a place to store your stuff.
Now "ordinary middle-class Americans" are losing their stuff. What?! Only hick farmers living on a river flood plain, or ghetto folks watching their houses burn, are supposed to lose all their stuff! Not ordinary Americans! The American Dream is to compile more stuff than the next guy and to have complete control over that stuff.
This is the real social calamity, not the foreclosure of homes. Americans change their homes and apartments like they change their underwear. But their stuff is supposed to be eternal.
"The concept of sharing resources may be beyond many of them."
Living within one's means includes saving for downturns. I suspect Bill Martin's spending habits during the good times left him ill prepared for more difficult times. This problem is pervasive in America. During the tech boom, California increased the budget significantly even though the revenue increases were coming from cap gains, from a small percentage of the population.
It's curious all this attention to folks in economic distress. The homeless have been with us for many years and we turn a blind eye to their plight.
Welfare reform shrinks the social safety net and no one cares. Make them work - we say.
Here's hoping the vulnerable middle class homeowners will remember the fragility of their financial health next time there is an election.
Values aren't just about religion. Sometimes it makes sense to support those on the edge. It turns out when they fall off the edge the rest of us get hurt too. Who new?
Well, I'm sure all these folks deserve their fate for daring to buy a house in a bubble market. Maybe they even took their kids out for a nice dinner every once in while when we all know they should have been studiously saving every penny.
Mabye 30 years of living beyond their means will finally convince Americans that a dog-eat-dog economy is not always in their best interest.
"Everyone stumbles. I'm not going to hide or run or live in denial, or with regrets," Forgaard told Reuters in an interview. "On the surface it looks like total devastation but it's just the opposite. I'm confident our lives will be much, much richer as a result."
Gambling is so much more enriching when other people pay for your losses.
No mention of Mortgage Backed Securities in the article but they do cite unrealistic expectations on returns. Growing Deficits Threaten Pensions in WPost
Gives a whole new meaning of "self-storage." Quote of the week!
go the library; maybe learn a new skill; or find a new hobby; grab paper and pencil, go for a hike and learn to sketch; walk downtown and volunteer for service at a charity; join the Y and get in shape; find a spiritual community to join.
Mom, is that you?
Along the idea of RVs as the new homes, maybe storing your RV at a storage place, and occupying that, would be a cheap way to live.
America is the land of ingenuity, and that doesn't have to end when you wind up down & out. We're the 60s generation, the flower power people. Homelessness used to be hip. Before we turned totally materialistic, we eschewed anything materialistic. Somewhere deep down that part of us is lurking somewhere. We need to turn homelessness chic again, and maybe that will help this country recover. Hmmm.
My Grandmother told me a German proverb: "Moving three times is like being burned out once."
Living within one's means includes saving for downturns. I suspect Bill Martin's spending habits during the good times left him ill prepared for more difficult times.
True, but ironically, those "good times" were CAUSED by millions of people like Bill spending more than was prudent. You don't become a massive, consumer spending based economy with significant inflows of foreign capital if your consumers invest their money instead of spending it.
Fascinating. I wager that we see a return of this, a taking from those who unjustly gained and a freeing of those unjustly indebted.
jg | 05.11.08 - 12:49 pm | #
So jg - you stumping for a starting position on 'Team O' come this January or what?
I don't usually get spiritual on economics blogs but I wish I could tell this guy that his life consists of his relationships, the health of his body, the knowledge of his mind and his actions. Get off mom's couch and go the library; maybe learn a new skill; or find a new hobby; grab paper and pencil, go for a hike and learn to sketch; walk downtown and volunteer for service at a charity; join the Y and get in shape; find a spiritual community to join. Anything. These are the things that define your worth as a human, not the junk you bought at Walmart or the tract house you parked them in.
Even try moving & starting over - North Dakota would probably jump all over him, especially out in the western parts where they are drilling what was once uneconomical fields - they need managers & techs and 'start overs' make some of the best (believe it or not). Wildcatters know all about starting over - they've all had to do it a bunch. Sitting on the couch though - not gonna get many wells drilled.
Recession Troll writes:
so whats the story with PODS... howr they doing, I wonder.
Recession Troll | 05.11.08 - 3:16 pm | #
As a place to store stuff or a place to live? Too bad there is a growing shortage of containers - with the weakening dollar and all - they'll even be too expensive to live in soon... good thing houses are getting cheaper.
Hey, maybe there is something to this stuff that Jas spouts off, about democracy not being all it is cracked up to be. Lots of fools and dummies, but also reasonable but imprudent folks, end up as indentured servants.
Historical norms are of benevolent despots, not democracies.
I have no idea what will happen here. But, our structure -- a Republic, amended into a democracy -- is an outlier.
"Living within one's means includes saving for downturns. I suspect Bill Martin's spending habits during the good times left him ill prepared for more difficult times."
So we're speculating again and making things up... Maybe he or a family member had an expensive illness and his medical insurance was non-existent or woefully gutted or otherwise inadequate. Or maybe his job moved offshore. I know several people over 50 looking for jobs. They swear that employers are afraid of age discrimination suits. Maybe his company became toast because of technology innovation.
Maybe he wanted to give his kids a good education and spent his saving on them.
Maybe he's just unlucky.
jg - are you the same guy who ridiculed me last night for suggesting that not everyone was on the brink of economic disaster? Suddenly you are an adherant of Jainism? Well, do we deserve our fate or is America the land of opportunity?
Fools and dummies can be protected from those Jain hates through reasonable consumer protections. Our GOP buddies would have nothing of that. Now you have unprecedented income inequality. I'm starting to see a pattern here.
The guy with the 9 or 10 houses. . put 40% down with a negative am?????
Why? with that much down couldn't
he get a nice fixed rate. If he bought half as many houses, and put 60% down on that particular house, with a fixed, even in today's mkt,he
would be sitting pretty, and be able to rent with a positive cash flow, or at least break even.
I think he subconsciously decided to fail. I have known a few people like
that. Who got ALMOST to success and then did something absolutely ridiculous to sabotage themselves.
These people feel comfortable being failures. I note the guy got the stake in one piece, kinda as a windfall. So, I think he was not comfortable with that and needed to lose the windfall.
I don't truly understand why having assets makes some people act in such a way as to lose it all, but I have observed it a number of times, so I have to accept it happens.
If the bubble had gone on and the guy had made money he would have done something else really stupid.
This does not apply to people who spent HELOC money to go on cruises.
They simply wanted to feel rich for a while. That I can understand.
"...Lands were restored to their traditional holders or cleared of all debt encumbrances. With the symbolic sounding of the ram's horn on the Day of Atonement of this fiftieth year, the Jubilee renewed an equitable economic balance by undoing the adverse cumulative effects of indebtedness..."
Paul, there may be some truth to what you say, about using regulation to protect fools and dummies from themselves.
I think I will be learning alot during this depression. 'Capitalism and Freedom' was an eye-opener for me when I was in college. It appears that I have some other things to learn. Maybe we do have to treat some like children, instead of letting them fail first.
But, can you libs live with the consequences, such as no direct election of Senators and voting only by property owners, as was done originally?
jg - I'm not sure why I have to tolerate no direct election of senators in exchange for consumer protections. I don't much trust the elected senators to look out for America's interests, so appointed ones are not better in my mind.
I happen to think that in this housing situation, the deck was stacked against unsuspecting borrowers by predatory lenders and cheap easy money. Some got suckered in; some went in with eyes wide open and got whacked when the market turned.
There is a middle ground somewhere that protects folks from predatory lending. Policies that encourage using HELOC (tax deductability) and condo flipping (cap gains exemptions) seem to have failed us. Those free market regulations may prove to have been more destructive than basic consumer protections.
The guy with the 9 or 10 houses. . put 40% down with a negative am?????
Shnapster's Grandma, I had that thought, too. I figured he must have gone to some investment seminar and figured obscene leverage was the way to go. Don't be satisfied with a few hundred thousand, make a million tomorrow! I woder if he had a goal in mind.
Re: Retailers brace for drop in profits amid worst consumer spending climate in nearly 2 decades Expired
"It's all about what you can do to set yourself apart."
Retailers reported better-than expected sales at established stores for April, but that doesn't mean that shoppers have been in the mood to splurge. Business was boosted by heavy discounting and a quirk in the calendar that meant an extra shopping day compared with the year-ago period.
The strain is expected to surface in the industry's first-quarter earnings, which are expected to show an overall 14.9 percent decline, said Ken Perkins, president of RetailMetrics LLC, a research company in Swampscott, Mass. He said that would be the biggest year-over-year quarterly decline since at least 1999, when he started tracking the data.
BTW- I realize that putting 40% down should have reduced the leverage,but then he bought 9 places without leaving any cashflow buffer, "leveraging" his income. In the recent past it was difficult not to be put into an Option Arm, but it's not mandatory to use that option. In fact, to be in his position, he had to ignore the declines as he was buying. At some point he could have dumped something to prop up his empire. Negative cashflow? You might say he was breeding "alligators".
I think there is a real human need to explain misfortune in a way that means it couldn't ever happen to us. Jobs being offshored or medical crises are much too scary. Better to assume the guy was a spendthrift.
As I was waiting for my morning java, there was a young couple enjoying whole wheat pancakes, freshly squeezed oj and STILL complaining about the "wartime gas prices" and those "big, greedy oil companies!" Didnt the prices just drop?
How come I never hear anyone say "damn those money-grubbing orange growers!"? Lets face it, you cant buy a gallon of renewable, available, domestic Florida orange juice for less than $6.
So drink up, young hypocrites... because at this little café, that $2 thimble-full of juice works out to roughly $42 a gallon.
I went to a storage auction last week for the hell of it; not many foreclosure in my area. I did notice the plastic bag phenom, but it was mostly crap: bedding, kid's toys, some dishes and stuff. In those cases it looked like someone cleaned out a small apartment on the fly, which is probaby what happened.
I talked to an estate liquidator about storage spaces, and he told me that by the square foot they're the most expensive real estate to lease in America. I believe him. Quite a racket.
I think he subconsciously decided to fail. I have known a few people like that. Who got ALMOST to success and then did something absolutely ridiculous to sabotage themselves. These people feel comfortable being failures. I note the guy got the stake in one piece, kinda as a windfall. So, I think he was not comfortable with that and needed to lose the windfall. I don't truly understand why having assets makes some people act in such a way as to lose it all, but I have observed it a number of times, so I have to accept it happens.
I don't usually get spiritual on economics blogs but I wish I could tell this guy that his life consists of his relationships, the health of his body, the knowledge of his mind and his actions.
I generally try to refrain from making judgements about other's lives, but sometimes a bad experience needs a time of adjustment after it, and a time to grieve...even if it's a job. And everyone needs hope, even if something as ephemeral as hope is represented by a TV and a couch.
I think the quotes from Leviticus (even though I have a problem with most of the book) run deeper than you are surmising about the current economic circumstances. What they point to is saving those who are less smart, savvy, and responsible because you have a duty to your countrymen not to allow them to fall into suffering forever because of their shortcomings.
Yes, what that means is that, according to the book, there should be social safety nets and a mechanism for forgiving debt. That includes a mechanism for allowing people stupid enough to buy 500k houses on 60k salaries because, when it comes right down to it, they aren't too bright, are they? And some people just aren't you know.
And I think that is perfectly fine. Again, this is the first world, and people, no matter how stupid, should have the chance to do it again without mean-spirited 'i told you so's' and other righteous indignation. sort of like that story about the Samaritan where everyone just walks by never reaching out a hand...this story made me sad.
Binko writes:
Storage has my hopes in it, said Mr. Martin, who sleeps on a foldout bed in his mothers guest room. I dont tell anyone this, but at least once a week I go over and look at my couch, my refrigerator, my TV stand, my mattress and realize I did have a life, and maybe theres a way to go back to it.
It is a sad commentary on Americans' attitudes that an educated man believes his life is defined by a refrigerator, a TV stand, a mattress and other transitory possessions. .....I wish I could tell this guy that his life consists of his relationships, the health of his body, the knowledge of his mind and his actions. Get off mom's couch and go the library; maybe learn a new skill; or find a new hobby; grab paper and pencil, go for a hike and learn to sketch; walk downtown and volunteer for service at a charity; join the Y and get in shape; find a spiritual community to join. Anything.
After I finished gagging at such sanctimonius drivel, I was able to type.
Read the article. The man is 50 years old. He was a manager in the tech industry and lost his job 9 months ago. He is now so broke he ccan not afford to pay for housing (house or apratment.) Given that he was a manager, he probably had health insurance through his job and at 50, is struggling to hang onto it through COBRA and probably paying around $600-800 a MONTH.
His health is at risk unless he can keep the COBRA going for another 9 months; and then at risk unless he finds a job with insurance coverage. Insurers think being 50 is a pre-existing condition. Odds of finding a job paying even close to what he made are probably between slim and none - he is FIFTY. It takes a 50 and older 2-3 times to find any job than it does someone in their 30s. People who lose well-paying jobs typically take an income hit of 30% or more in a new job and it takes them 5-10 years to get back to where they were.
Go to the library? He probably does.
Find a new hobby? And PAY FOR IT with what ?
Join the Y? And PAY FOR IT WITH what?
Learn a new skll? Where that does NOT COST MONEY?
WALK downtown and volunteer for a charity? The man is in CALIFORNIA - that place doesn't even have sidewalks and one needs a car to get anywhere. So drive somewhere to volunteer? And PAY FOR THE GAS WITH WHAT?
Spare us the psycho-babble claptrap. I understand what the man meant when he said that his stuff in storage represents that "I did have a life, and maybe theres a way to go back to it. He had a job. He had a place to go everyday. He had work to do which was valued by others. He was 'normal' in that he had a place to live of his own- and wasn't camped out at his elderly mother's on a cot. which is not exactly the 'normal' lifestyle for a 50 year old manager. He could make plans for the future - something that requires MONEY comng in. His friends and acquaitnances didn't look at him funny and try to avoid seeing him so that (1) they are not reminded that he is a 'failure' (as defined by this vicious winner take all economic system) and that they could be in his situation too one day and (2) he is pestering them for 'contacts' and 'job leads.' In his situation, he is basically a social pariah that those with jobs and incomes would rather avoid seeing because it will remind them that it could happen to them.
Then we get this nonsense as "dryfly writes: I don't usually get spiritual on economics blogs but I wish I could tell this guy that his life consists of his relationships, the health of his body, the knowledge of his mind and his actions. Get off mom's couch and go the library; maybe learn a new skill; or find a new hobby; grab paper and pencil, go for a hike and learn to sketch; walk downtown and volunteer for service at a charity; join the Y and get in shape; find a spiritual community to join. Anything. These are the things that define your worth as a human, not the junk you bought at Walmart or the tract house you parked them in.
Even try moving & starting over - North Dakota would probably jump all over him, especially out in the western parts where they are drilling what was once uneconomical fields - they need managers "
Have you ever tried moving when YOU DO NOT HAVE ANY MONEY? The guy is broke. What a spiffy idea. Pack up the car and take off for North Dakota and go around trying to apply for jobs. Where is he going to live? In his car? How is he going to pay for it? Rob a bank as they sure won't loan t to hm with no job? How is he even going to get the money to go? Maybe he could search for jobs online but employers in ND would still want an interview and not many will pay for the trip for a lower or middle manager.
"Allen C writes:
"The concept of sharing resources may be beyond many of them."
Living within one's means includes saving for downturns. I suspect Bill Martin's spending habits during the good times left him ill prepared for more difficult times. "
Writing fiction are we? Doing the 'it has to be that person's fault and they did something wrong' because if I think it could happen to anyone, even me, then it would be really really scary? Looking for the scapegoat and trying to find a reason that it would happen to them and not to you is so-o-o-o-o pathetic.
Jeez AnnS, while I felt the same outrage reading what was posted here, I think brining up the Good Samaritan story pretty much said it all, don't you? I mean, here's everyone here walking by this man and no one's talking about HIM, they're all talking about THEMSELVES and their beliefs. One of the sadder threads on CR for many reasons...which is why I said it made me sad.
Although I have to admit that the Ipodius extreme bullshit award goes to the "you are more than your posessions" post. For fuck's sake this man should get a little respect as a human being for HIS view of where he is, not some sanctimonious platitudes...
Years ago, I was involved in the US Lines bankruptcy, representing a company that insured the cargo containers. We never found thousands of them, they became third world housing.
Re: Stuff
This brought to mind the bumper sticker I used to see on big RV's rolling down I5. The sticker said: He who dies with the most toys wins". The other one that used to give me a smile was: "I'm spending my kids inheritance".
I know a couple of guys who own self storage. I will have to ask them about the article and what their experiences have been.
One guy told me about live aboards who mess with the electrical systems and cause some of the metal in the room to be "hot". His units have low amp circuit breakers so it is impossible to use a coffee pot without blowing the breaker.
LOL...a little known fact about Ipodius is that he's going to get a PhD in early Christian studies. So I know a little about such things
You know, if you're going to do a PhD, you should do it in something utterly useless but completely fascinating, don't you think? Like economics LOLOLOL
Yes, but you know Outsider, I could never be a man of the cloth. I mean, children's ears would have to be covered once i got going. Although I would love Tanta to do the collections..."put your money in the f&*ing basket!"
But what is interesting is to see people's reaction when they figure out that i know quite a lot about things biblical, especially when i tell them what the Greek really says. They usually just stop talking. I mean, people don't want their beliefs challenged now, do they? wink
Oh abraham (shouldn't you be at a bris or something?) this is an econ blog, you don't want all the boring contrasts between first century writings and the gospels and the fact that they contradict each other. That's best saved for when my thesis is published or when i reach my dotage and write books.
But I will go on about the need not to judge people on their economic choices and instead to push to teach and regulate things so that people are protected from...themselves. The sin here was committed by those who wrote the loans knowing full well these people couldn't afford what they were giving them. Which is why I think Countrywide's execs should be doing the perp walk.
Oh abraham (shouldn't you be at a bris or something?) this is an econ blog, you don't want all the boring contrasts between first century writings and the gospels and the fact that they contradict each other. That's best saved for when my thesis is published or when i reach my dotage and write books.
fair enough- point me in the direction you spoke of, and i'll peruse on my own. tia
Well abraham, here's a hint: the letters of Paul are the oldest documents in Christendom. They pre-date the gospels which are, actually pseudonymous, having been given their authors late in the second century and the range of dates for writing run anywhere from 70AD up to 120AD. So they weren't written by eye wittnesses. These are also non-cannonical first century letters as well. Now, it is utterly fascinating that, if you read these, you get no sense that the big J even existed anywhere in time proximate to the authors of these first century letters...different authors across different geographic areas. Puzzling, huh? No corroboration of any gospel stories whatsoever and no quotes of the big J either, even when it would have served their arguments.
Start there and learn to read ancient Greek, Latin, Hebrew and a smattering of Aramaic grammar, and then read your way through about 1000 manuscripts. Then you can probably make some hypostheses.
Ipodius, you're starting to sound like the guy at the end of the Werner Herzog movie Aguirre, The Wrath of God, as he's floating alone on a raft on the Amazon River, lecturing to an audience of monkeys how great he is.
It is a sad commentary on Americans' attitudes that an educated man believes his life is defined by a refrigerator, a TV stand, a mattress and other transitory possessions.
Yeah, I believe they made a movie about that called, Fight Club.
"You're not your job. You're not how much money you have in the bank. You're not the car you drive. You're not the contents of your wallet. You're not your fucking khakis. You're the all-singing, all-dancing crap of the world. "
Angry enough, AnnS? Sanctimonious drivel? I guess you could look at it that way if you want to.
The point is this guy still has choices. As somebody said, this is not the third world. There are other ways to find satisfaction in this life besides summing up your material possessions.
For the most part people lose a bunch of their junk and all they can think is "I can never be happy again until I get my stuff back". That's actually not true, but most people are blind to the alternatives.
Have you ever tried moving when YOU DO NOT HAVE ANY MONEY? The guy is broke. What a spiffy idea. Pack up the car and take off for North Dakota and go around trying to apply for jobs. Where is he going to live? In his car? How is he going to pay for it? Rob a bank as they sure won't loan t to hm with no job? How is he even going to get the money to go? Maybe he could search for jobs online but employers in ND would still want an interview and not many will pay for the trip for a lower or middle manager.
Ya actually I have moved broke but that was when I was young. I moved with my folks as a kid when they were in that situation though not quite a dire - in their 50s - more challenging for sure.
BTW not having stuff helps. You just go. Seriously.
Live in a car? Sure. Or shelter. Or ask a church. Or ask the company for help finding a 'temporary place'. Rural America is damned poor they'd understand & half expect it. I mean why else would somebody leave southern California for the cold barren plains of North Dakota? The weather?
But how the hell else can North Dakota get the people they need? Its a place people leave, not a place they go to. He'd probably get interviews and get the trip paid for IF they thought he'd really take the job and move (most wouldn't).
I wasn't joking - I know companies out here, they are staffed to the eyeballs with retreads & start-overs. Same with a lot of fly over... rural Minnesota, South Dakota, Nebraska, Wyoming.
Is it going to be easy? No. Is it going to be like his life as a manager in technology in California? No. Is it a reboot? Yes.
I have people on my street that have done EXACTLY this - one brought his family of six and everything they owned from the inland empire in one minivan - mom, dad, four kids, their dog and everything they owned in one fricking van all the way from California to rural Minnesota to start over. They rented across the street for two years until they got enough saved to buy a house & moved. The new renter moved in and bought the place from the landlord - he was a divorced dad with a kid (wife walked out) - he moved in to this small town because he could get a job locally that would make it easier for him to be a single dad. Moved in with one small U-Haul pulled by a sedan for the two of them. Nice people - they'll probably be fine.
Damn near everyone in my world is a retread or a misfit - I kid you not. Towns like mine are full to bursting with them. The guy in the article would fit right in. he'd be like family overnight.
I mean how much do you really think it would cost to do this? To move here? I'm telling you right now it would be less than a couple grand total - first couple months rent up front included. Sell the crap in storage, hit mom up for a little and go.
But you have to get off the couch first. That is the key.
Reminds me of Chekov's "the Cherry orchard". The family refuses to cut down the orchard and pay the bank. The bank takes the farm,so they lose the beautiful orchard anyway.
I know a guy who got kicked out of his "art space" unit for living in it. Now he lives in his van. He works but he refuses to pay rent for anything and believes he is "beating the system." In reality he is an alcoholic, and living in a van is the easiest way to keep his addiction paramount.
In spite of his problems with material life, he is probably the most Christ-like character I know. Never has a hard word for anyone, counts his blessings (and really feels blessed), and is always willing to lend an ear or a hand. A good egg in a sad shell.
Damn near everyone in my world is a retread or a misfit
That is so un-east coast that I really can't relate. Never knew a Do-over-ville existed. But I think it would be a refreshing change from the politically correct-ville.
Back during the dark days of the '80s recession, two experts in bankruptcy law (Jay Westbrook and Carol Weinstein, bankruptcy professors who were both associated with University of Texas School of Law at that time) corroborated on a great little book about the philosophy of American bankruptcy law entitled "As We Forgive Our Debts ..."
While bankruptcy law may appear dry as dust, it is the stuff of revolution and conflict. The matter of debt forgiveness is often at the center of profound social upheaval, and it is important to understand how our fragile economy rests in part on how we treat debt.
The genius of American bankruptcy law through most of the last century (until the credit card companies perverted it to their own short-term ends) was to uncouple debt from any moral judgment about insolvency.
Insolvency is not a sin; it is not a moral stain; it is not a sign of some lack in a person's intelligence or character. Credit and debt are the yoked engines of commerce, and default on debt is the surcharge associated with the creation of economic wealth.
Default is extremely important. It is the mechanism by which industry may gauge the limits of capital, and adjust its output accordingly.
If one sees insolvency as a crime, and bankruptcy law as a punitive statutory tool (say, by designing the law to severely restrict the ability of debtors to discharge their unsecured consumer debt) then to be consistent, one must also see the extension of credit as nothing more than an incitement to crime.
But if one takes this course, one also assumes that the proper role of the consumer is to be a permanently indentured servant to industry, never released from debt, and never permitted to wipe the slate clean.
Push the debtor hard enough; make the system of debt forgiveness brittle and unyielding enough; and the next thing you know, you'll be trying to explain yourself over the noise of the crowd at the Bastille while they press in on you with pitchforks and torches.
As noted in another thread, this could be an oblique data point - those losing all their goods because they can't afford storage after foreclosure are definitely not 'walk aways' as generally considered by the authors of this blog.
What is strange is to see how distorted these people must view their life - goods worth the money to store, but not worth the money to keep.
Even stranger, goods they consider valuable enough to spend money to keep, but worthless when an urgent need for cash exists.
Something sadly pitiful about this, in a way that the pawn shop stories don't begin to approach.
"I don't tell anyone this..." which is why he is telling the NYT - no one reads that POS anymore.
Somewhat OT, but I was shocked to see a front page AP article in the local Sunday paper on how the most recent "positive" economic news might not be so positive. The writer actually took the time to look into the data beyond the official pronounciations. Shocking.
Storage has my hopes in it, said Mr. Martin, who sleeps on a foldout bed in his mothers guest room.
What we could see next...
Housing Bust and "Living in" Self Storage Units ( although that's against the rules )
OT -- from 'The Lost Tradition of Biblical Debt Cancellations':
"...The Liberty Bell is inscribed with a quotation from Leviticus 25:10: "Proclaim liberty throughout all the land, and to all the inhabitants thereof." Over the years these words have suggested to visitors such diverse ideas as our democratic freedom to vote and the American Revolution's slogan of no taxation without representation. But the full verse in Leviticus speaks of freeing debt bondsmen. It exhorts the Israelites to "hallow the fiftieth year, and proclaim liberty throughout all the land and to all the inhabitants thereof; it shall be a Jubilee unto you; and ye shall return every man unto his family."
Fascinating. I wager that we see a return of this, a taking from those who unjustly gained and a freeing of those unjustly indebted.
thumbs up on the new layout.
I know a guy who's literally made billions on a storage business. The entire premise of the business is built upon inertia and sentimentality. Inertia: People anticipate that they'll store their stuff for 3 months, but generally store for over three years, thus spending over 4K. What are the chances that what people are storing is actually worth anywhere near that much? Sentimentality: When parents die, people don't want to get rid of their stuff, so the storage units offer some sort of emotional limbo. It's been good for this guy, private jets, homes all over the world, but I think it's kind of a sad business that's built on such false ideas.
I rent workshop space a few miles from the beach where I live. My friend "Bill" lives in a duplex storage unit (two 10'x10's side by side). Bill's rent is $190.00 per month (electricity included)and he showers at the KOA campground down the road. He's got a/c, a small fridge, microwave, and a hotplate. He's very happy, and I like having him there for security reasons. Bill makes his living as part of the "salvage economy", recycling used possessions at the local flea market. A very stress-free life, more power to him.
rent_to_own: "Even stranger, goods they consider valuable enough to spend money to keep, but worthless when an urgent need for cash exists."
This seems like a really good illustration of how people don't actually think and behave like economic models. If they "value" their stuff - in the economic sense - then they should sell it rather than let it be auctioned, as you point out.
But instead they value it sentimentally, because it is theirs. They are fond of their stuff. It is like their family - or at least their pets. Who wants to sell their pet or even be there when it is sold?
And this is why when people say they "can't feel sorry for" people who have made stupid financial decisions, I usually do feel sorry for them. Because they weren't making financial decisions. They were just bumbling along living their lives and they never saw reality coming. I don't necessarily want the government to bail such people out. That doesn't make sense. But I can spare them a moment of compassion.
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This guy maybe the "Poster Child" for the forclosure crisis?
What do you think?
SeattleSun
California man losing nine homes in mortgage mess (actually 10 if you count the one he lives in)
LOS ANGELES (Reuters) - A California man who has defaulted on nine homes and expects banks to foreclose on all of them, forcing him into bankruptcy, says he now considers it a mistake to have invested in the real estate market.
Shawn Forgaard, a 37-year-old software company project manager, bought one home for his family to live in and nine more as investments. He stands to lose all the investment houses in the mortgage meltdown but says he has come away wiser from the experience.
"Everyone stumbles. I'm not going to hide or run or live in denial, or with regrets," Forgaard told Reuters in an interview. "On the surface it looks like total devastation but it's just the opposite. I'm confident our lives will be much, much richer as a result."
Forgaard bought a house in Santa Cruz, about 60 miles (100 km) south of San Francisco, in 2000. Four years later, using $800,000 in stock options, he began snapping up investment properties, putting 10 percent to 40 percent down on negative amortization loans -- in which payments do not cover the interest so that a borrower's balance grows over time.
It was those "neg-am" loans, which include triggers causing payments to balloon if the debt reaches a certain percentage of the original balance, that would come back to haunt him.
"I knew I was sitting on time bombs," Forgaard said. "I knew the market was going to go soft and I knew that property values would decline. But I figured that I had enough equity to survive the storm and sell or take the loss and refinance.
"I didn't anticipate a downturn of epic proportions such that home values are 40 percent less than they were," he said.
The mortgage market has melted down in the past two years in a crisis that began in the subprime sector and has left millions of Americans facing the possibility of foreclosure on their homes.
'THIS COULD GET UGLY'
Rest of story
California man losing nine homes in mortgage mess [General] - MarketTicker Forums
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lol, the cyberpunk book Snow Crash predicted people living in self-storage.
I was faced with this similar decision at one point - put my 1 bed-room apt worth of stuff in storage for 2-4 years or sell and rebuy later?
Ended up paying ~$1,100 in storage fees so I came out ahead in strictly economic terms, but god damn was nice to have my old crap back and not have to restart from scratch aquiring stuff.
Stainless Steel Rats.
Craigslist will be the new storage facility.
SeattleSun: You left out the best line:
Forgaard said that some good has come out of the experience and that his family is optimistic. He is relieved that he no longer has to deal with 10 homes at once and now will pursue a lifelong dream of starting his own business.
While it's expensive to store lots of stuff for a long time.. it still makes financial sense if you think you are going to have a real place of your own to live even w/in a year or two. I moved overseas and it was worth $10k to me to ship average stuff since to buy it all over again would have been far more costly. Since I wasn't paying by weight, but by the container-load, I brought EVERYthing with me, including food, detergent, balls o'string, old plant pots.. if you really put a price, however small, on that stuff.. it adds up!
Let's say you can sell your year-old $2k couch for $500.. are you going find a decent couch for $500 later without putting lots of in time/gas into the search? These days, can you really efficiently sell 5 sets of used bed sheets, mattress, pillows, etc..? Just my .02.. tho' I can see how people may find themselves in limbo for longer than they imagine.. or never get solvent enough to prevent their stuff from going to auction..
Just finished reading "Down and Out in Paris and London" by George Orwell. It recounted the real hardship of going from rented room to rented room, through bug-ridden flophouses and homeless shelters. Pawnbrokers were the means of selling and buying literally the clothes off one's back; truly hard times. But since people had so little in general, there was still some market for the smallest cast-off.
Gives a whole new meaning of "self-storage."
Virtually everything I had was destroyed in hurricane Andrew, except some stuff we had in a second,
smaller house we had in Brevard County. We were slightly over insured, with replacement value coverage, so all our paperback books were suddenly worth 5 bucks, and we
got policy limits on personal property. even so, when you have to replace every last potato peeler ball of string, all furniture etc etc, you find that even an extravagant amount of money may not suffice.
We drove by one storage place once where the S had fallen off, so now all the storage places are "Elf Storage" to my kids. It actually makes sense in their D&D world...
Not a good place to live in, though. It surprises me a bit that more people aren't figuring out to take in their neighbors who are being foreclosed on, combine incomes and save at least one of the houses. But I guess our society isn't friendly enough for that anymore. It's one reason I think this downturn in housing might last longer, if families collapse back into one home rather than several. A lot of our neighbors are starting to see the 20 something kids straggle back home again right now, when they can't get jobs after college this year...
...25 years ago, when "down and out" folks needed to empty/vacate an apartment, they would call a moving company, sign a contract and ship the stuff to a fictitious address in East Bumpkins, FL...when the mover arrived, no address, no such person...
today, movers demand credit card payment before the furniture goes on the truck if we suspect something "hinky"
now the self storage people will load their stuff, bring it to storage and give the person a free months storage (generally, they must pay for a few months of storage to get the free delivery and the free month of storage)...this is a good deal for a person, who doesn't have much money and just needs to empty the house of what they don't want anymore.....
i find that there a re many folks who procrastinate whehn they are in financial trouble...hence, foreclosure, and, then they suddenly realize they need to empty the place and putting off the hard decision of what do with their stuff for a few months fits right into their decision making process.....they hope they'll get a job or ionherit some money or something will happen which will pull them out of the mess they are in....sometimes it does and sometimes it doesn'
by the way, all professional moving companies have public auctions of unpaid storage lots....it's a great opportunity to get some high end furnishings at a great price....even more fun, is bidding on a lot of 20 boxes (Contents Unknown)...could be Watrerford/could be Gladwrap containers...fun stuff for the adventuresome.....
lidia -
those are several interesting points that you bring up, but these are people who are losing their possessions because they can't afford the storage fees.
Even a pawn shop is a better alternative, at least with goods that are accepted as collateral.
In a sense, at least in the terms of the article, these are people who are paying to lose even more of their material possessions, without any apparent benefit to themselves.
I won't even begin to explore the idea of paying more money to remain encumbered with goods you can't afford in the first place.
This is what I meant about this being disturbing in a way that pawn shop stories aren't - this is far beyond throwing good money after bad, this is not even knowing the value of money when you are down and out, before skidding down to the next step, flat and busted.
--
Great stroy.
As the wheel turns...
Jas
Storage has my hopes in it, said Mr. Martin, who sleeps on a foldout bed in his mothers guest room. I dont tell anyone this, but at least once a week I go over and look at my couch, my refrigerator, my TV stand, my mattress and realize I did have a life, and maybe theres a way to go back to it.
It is a sad commentary on Americans' attitudes that an educated man believes his life is defined by a refrigerator, a TV stand, a mattress and other transitory possessions.
I don't usually get spiritual on economics blogs but I wish I could tell this guy that his life consists of his relationships, the health of his body, the knowledge of his mind and his actions. Get off mom's couch and go the library; maybe learn a new skill; or find a new hobby; grab paper and pencil, go for a hike and learn to sketch; walk downtown and volunteer for service at a charity; join the Y and get in shape; find a spiritual community to join. Anything. These are the things that define your worth as a human, not the junk you bought at Walmart or the tract house you parked them in.
If you use it as a starting point for self examination and personal growth it may turn out that moving back to mom's house is a great thing.
A big part of the root cause of the housing bubble and bust is that people define themselves by the objects they own and the shelter they live in. This belief leads to endless cycles of greed and grasping and unhappiness.
It surprises me a bit that more people aren't figuring out to take in their neighbors who are being foreclosed on, combine incomes and save at least one of the houses.
We took in a family of 7 who had lost their house to foreclosure during the recession in the 70's. It wasn't easy but it got both of our families through a rough financial time.
Unfortunately, too many in the current generation facing financial stress think they are each entitled to their own phone, their own bathroom, their own bedroom, their own flat screen, etc. The concept of sharing resources may be beyond many of them.
I hope I'm wrong.
George Carlin: Too much stuff ...
YouTube - George Carlin Talks About "Stuff"
These are the things that define your worth as a human, not the junk you bought at Walmart or the tract house you parked them in.
Bingo, Binko.
Indy short "American Storage", released on Wholphin DVD, treats this topic, tongue in cheek. Worth a look, IMHO.
American Storage: Wholphin Short Selection Gets Steve Carell To Play Bookend Part | Suite101.com
The garage sales at self storage units are really sad. Generally people who are selling what they can before they quit paying the rent and walk. Yes walking away happens in self storage too. Not an urban legend!
one other thought about people who put stuff in storage:
there are usually "back stories" to the peoples lives, about which we know nothing....as a moving representative, I sometimes feel I am watching a few episodes of a locally televised Soap Opera while I spend a few days in a small town waiting for my car to be repaired.....
many times a seperation/pre divorce situation accompanies a foreclosure...the couple may have experienced a job loss and are now traveling out of state to apply "in person" for a job and plan to send for the furniture once they are hired...maybe there is an illness in addition to the foreclosure...or they think they'll move into their brother's apartment unit in a few months....
then, for some reason the person didn't achieve the job/reconciliation/windfall inheritance that they thought would allow them to get their stuff out of storage....
I realize many of the contributors here think in straight economic terms, and, your analysis sure makes logical sense....
but, most people,THINK they made sensible decisions, and, even when they find their current situation to be worse than before, they can't change their ingrained decision making behaviour, and, continue to make "sensible to them decisions" which many folks deem illogical/stupid...
my favorite experience was a lady, who interviewed me, but selected anouther company to move her..
On her moving day, the young lady called in a panic to ask if we could get her a moving crew immediately as her chosen mover did not show up...My wife, asked her why she did not choose me, and, she said, "You husband was too nice, and I didn't think anyon that nice could be trusted. By the way, Mrs. Beaver, I always seem to make bad decisions. Tomorrow I am getting married, and, I think I have made a bad decsion about my fiancee, also."
We got her a truck......
And, If the marriage failed?
Whocouldanoode......
I don't know why everyone is getting so surprised about people's attachment to stuff. Stuff is what the American Dream is all about. A house, in fact, is really only a place to store your stuff.
Now "ordinary middle-class Americans" are losing their stuff. What?! Only hick farmers living on a river flood plain, or ghetto folks watching their houses burn, are supposed to lose all their stuff! Not ordinary Americans! The American Dream is to compile more stuff than the next guy and to have complete control over that stuff.
This is the real social calamity, not the foreclosure of homes. Americans change their homes and apartments like they change their underwear. But their stuff is supposed to be eternal.
"The concept of sharing resources may be beyond many of them."
Living within one's means includes saving for downturns. I suspect Bill Martin's spending habits during the good times left him ill prepared for more difficult times. This problem is pervasive in America. During the tech boom, California increased the budget significantly even though the revenue increases were coming from cap gains, from a small percentage of the population.
Right now in Hollywood, there's a television producer trying to dream up a game show based on auctioning the contents of self-storage units.
"I don't tell anyone this..." which is why he is telling the NYT.
"I suspect Bill Martin's spending habits during the good times left him ill prepared for more difficult times."
Ditto, ditto. The reporter doesn't want to go there tho.
It's curious all this attention to folks in economic distress. The homeless have been with us for many years and we turn a blind eye to their plight.
Welfare reform shrinks the social safety net and no one cares. Make them work - we say.
Here's hoping the vulnerable middle class homeowners will remember the fragility of their financial health next time there is an election.
Values aren't just about religion. Sometimes it makes sense to support those on the edge. It turns out when they fall off the edge the rest of us get hurt too. Who new?
Well, I'm sure all these folks deserve their fate for daring to buy a house in a bubble market. Maybe they even took their kids out for a nice dinner every once in while when we all know they should have been studiously saving every penny.
Mabye 30 years of living beyond their means will finally convince Americans that a dog-eat-dog economy is not always in their best interest.
"Everyone stumbles. I'm not going to hide or run or live in denial, or with regrets," Forgaard told Reuters in an interview. "On the surface it looks like total devastation but it's just the opposite. I'm confident our lives will be much, much richer as a result."
Gambling is so much more enriching when other people pay for your losses.
No mention of Mortgage Backed Securities in the article but they do cite unrealistic expectations on returns.
Growing Deficits Threaten Pensions in WPost
Gives a whole new meaning of "self-storage."
Quote of the week!
go the library; maybe learn a new skill; or find a new hobby; grab paper and pencil, go for a hike and learn to sketch; walk downtown and volunteer for service at a charity; join the Y and get in shape; find a spiritual community to join.
Mom, is that you?
Along the idea of RVs as the new homes, maybe storing your RV at a storage place, and occupying that, would be a cheap way to live.
America is the land of ingenuity, and that doesn't have to end when you wind up down & out. We're the 60s generation, the flower power people. Homelessness used to be hip. Before we turned totally materialistic, we eschewed anything materialistic. Somewhere deep down that part of us is lurking somewhere. We need to turn homelessness chic again, and maybe that will help this country recover. Hmmm.
My Grandmother told me a German proverb: "Moving three times is like being burned out once."
Living within one's means includes saving for downturns. I suspect Bill Martin's spending habits during the good times left him ill prepared for more difficult times.
True, but ironically, those "good times" were CAUSED by millions of people like Bill spending more than was prudent. You don't become a massive, consumer spending based economy with significant inflows of foreign capital if your consumers invest their money instead of spending it.
so whats the story with PODS... howr they doing, I wonder.
Fascinating. I wager that we see a return of this, a taking from those who unjustly gained and a freeing of those unjustly indebted.
jg | 05.11.08 - 12:49 pm | #
So jg - you stumping for a starting position on 'Team O' come this January or what?
I don't usually get spiritual on economics blogs but I wish I could tell this guy that his life consists of his relationships, the health of his body, the knowledge of his mind and his actions. Get off mom's couch and go the library; maybe learn a new skill; or find a new hobby; grab paper and pencil, go for a hike and learn to sketch; walk downtown and volunteer for service at a charity; join the Y and get in shape; find a spiritual community to join. Anything. These are the things that define your worth as a human, not the junk you bought at Walmart or the tract house you parked them in.
Even try moving & starting over - North Dakota would probably jump all over him, especially out in the western parts where they are drilling what was once uneconomical fields - they need managers & techs and 'start overs' make some of the best (believe it or not). Wildcatters know all about starting over - they've all had to do it a bunch. Sitting on the couch though - not gonna get many wells drilled.
Recession Troll writes:
so whats the story with PODS... howr they doing, I wonder.
Recession Troll | 05.11.08 - 3:16 pm | #
As a place to store stuff or a place to live? Too bad there is a growing shortage of containers - with the weakening dollar and all - they'll even be too expensive to live in soon... good thing houses are getting cheaper.
d-, that is 'Team Os-,' sir!
Hey, maybe there is something to this stuff that Jas spouts off, about democracy not being all it is cracked up to be. Lots of fools and dummies, but also reasonable but imprudent folks, end up as indentured servants.
Historical norms are of benevolent despots, not democracies.
I have no idea what will happen here. But, our structure -- a Republic, amended into a democracy -- is an outlier.
"Living within one's means includes saving for downturns. I suspect Bill Martin's spending habits during the good times left him ill prepared for more difficult times."
So we're speculating again and making things up... Maybe he or a family member had an expensive illness and his medical insurance was non-existent or woefully gutted or otherwise inadequate. Or maybe his job moved offshore. I know several people over 50 looking for jobs. They swear that employers are afraid of age discrimination suits. Maybe his company became toast because of technology innovation.
Maybe he wanted to give his kids a good education and spent his saving on them.
Maybe he's just unlucky.
Let just blame him: it's easier.
jg - are you the same guy who ridiculed me last night for suggesting that not everyone was on the brink of economic disaster? Suddenly you are an adherant of Jainism? Well, do we deserve our fate or is America the land of opportunity?
Fools and dummies can be protected from those Jain hates through reasonable consumer protections. Our GOP buddies would have nothing of that. Now you have unprecedented income inequality. I'm starting to see a pattern here.
The guy with the 9 or 10 houses. . put 40% down with a negative am?????
Why? with that much down couldn't
he get a nice fixed rate. If he bought half as many houses, and put 60% down on that particular house, with a fixed, even in today's mkt,he
would be sitting pretty, and be able to rent with a positive cash flow, or at least break even.
I think he subconsciously decided to fail. I have known a few people like
that. Who got ALMOST to success and then did something absolutely ridiculous to sabotage themselves.
These people feel comfortable being failures. I note the guy got the stake in one piece, kinda as a windfall. So, I think he was not comfortable with that and needed to lose the windfall.
I don't truly understand why having assets makes some people act in such a way as to lose it all, but I have observed it a number of times, so I have to accept it happens.
If the bubble had gone on and the guy had made money he would have done something else really stupid.
This does not apply to people who spent HELOC money to go on cruises.
They simply wanted to feel rich for a while. That I can understand.
The tradition of our Judeo/Christian forebearers:
"...Lands were restored to their traditional holders or cleared of all debt encumbrances. With the symbolic sounding of the ram's horn on the Day of Atonement of this fiftieth year, the Jubilee renewed an equitable economic balance by undoing the adverse cumulative effects of indebtedness..."
Paul, there may be some truth to what you say, about using regulation to protect fools and dummies from themselves.
I think I will be learning alot during this depression. 'Capitalism and Freedom' was an eye-opener for me when I was in college. It appears that I have some other things to learn. Maybe we do have to treat some like children, instead of letting them fail first.
But, can you libs live with the consequences, such as no direct election of Senators and voting only by property owners, as was done originally?
shit, pretty soon it'll be cheaper to buy a house to store your nearly worthless made-in-china crap in than to rent a storage locker.
jg - I'm not sure why I have to tolerate no direct election of senators in exchange for consumer protections. I don't much trust the elected senators to look out for America's interests, so appointed ones are not better in my mind.
I happen to think that in this housing situation, the deck was stacked against unsuspecting borrowers by predatory lenders and cheap easy money. Some got suckered in; some went in with eyes wide open and got whacked when the market turned.
There is a middle ground somewhere that protects folks from predatory lending. Policies that encourage using HELOC (tax deductability) and condo flipping (cap gains exemptions) seem to have failed us. Those free market regulations may prove to have been more destructive than basic consumer protections.
shit, pretty soon it'll be cheaper to buy a house to store your nearly worthless made-in-china crap in than to rent a storage locker.
Why buy it? Just change the lock. Bando? Storage-O?
The guy with the 9 or 10 houses. . put 40% down with a negative am?????
Shnapster's Grandma, I had that thought, too. I figured he must have gone to some investment seminar and figured obscene leverage was the way to go. Don't be satisfied with a few hundred thousand, make a million tomorrow! I woder if he had a goal in mind.
Re: Retailers brace for drop in profits amid worst consumer spending climate in nearly 2 decades
Expired
"It's all about what you can do to set yourself apart."
Retailers reported better-than expected sales at established stores for April, but that doesn't mean that shoppers have been in the mood to splurge. Business was boosted by heavy discounting and a quirk in the calendar that meant an extra shopping day compared with the year-ago period.
The strain is expected to surface in the industry's first-quarter earnings, which are expected to show an overall 14.9 percent decline, said Ken Perkins, president of RetailMetrics LLC, a research company in Swampscott, Mass. He said that would be the biggest year-over-year quarterly decline since at least 1999, when he started tracking the data.
** Everyone ready to set yourself apart?
I'm Left politically, but I'd rather rely on a very limited social safety net and consequated behavior to keep the train on the tracks.
Jubilee came out of Babylonia I believe.
Economist Michael Hudson wrote a book on this after he wrote "Superimperialism".
BTW- I realize that putting 40% down should have reduced the leverage,but then he bought 9 places without leaving any cashflow buffer, "leveraging" his income. In the recent past it was difficult not to be put into an Option Arm, but it's not mandatory to use that option. In fact, to be in his position, he had to ignore the declines as he was buying. At some point he could have dumped something to prop up his empire. Negative cashflow? You might say he was breeding "alligators".
Trader Walt: "Let just blame him: it's easier."
I think there is a real human need to explain misfortune in a way that means it couldn't ever happen to us. Jobs being offshored or medical crises are much too scary. Better to assume the guy was a spendthrift.
As I was waiting for my morning java, there was a young couple enjoying whole wheat pancakes, freshly squeezed oj and STILL complaining about the "wartime gas prices" and those "big, greedy oil companies!" Didnt the prices just drop?
How come I never hear anyone say "damn those money-grubbing orange growers!"? Lets face it, you cant buy a gallon of renewable, available, domestic Florida orange juice for less than $6.
So drink up, young hypocrites... because at this little café, that $2 thimble-full of juice works out to roughly $42 a gallon.
I went to a storage auction last week for the hell of it; not many foreclosure in my area. I did notice the plastic bag phenom, but it was mostly crap: bedding, kid's toys, some dishes and stuff. In those cases it looked like someone cleaned out a small apartment on the fly, which is probaby what happened.
I talked to an estate liquidator about storage spaces, and he told me that by the square foot they're the most expensive real estate to lease in America. I believe him. Quite a racket.
I think he subconsciously decided to fail. I have known a few people like that. Who got ALMOST to success and then did something absolutely ridiculous to sabotage themselves. These people feel comfortable being failures. I note the guy got the stake in one piece, kinda as a windfall. So, I think he was not comfortable with that and needed to lose the windfall. I don't truly understand why having assets makes some people act in such a way as to lose it all, but I have observed it a number of times, so I have to accept it happens.
Very wise observation.
I don't usually get spiritual on economics blogs but I wish I could tell this guy that his life consists of his relationships, the health of his body, the knowledge of his mind and his actions.
I generally try to refrain from making judgements about other's lives, but sometimes a bad experience needs a time of adjustment after it, and a time to grieve...even if it's a job. And everyone needs hope, even if something as ephemeral as hope is represented by a TV and a couch.
I think the quotes from Leviticus (even though I have a problem with most of the book) run deeper than you are surmising about the current economic circumstances. What they point to is saving those who are less smart, savvy, and responsible because you have a duty to your countrymen not to allow them to fall into suffering forever because of their shortcomings.
Yes, what that means is that, according to the book, there should be social safety nets and a mechanism for forgiving debt. That includes a mechanism for allowing people stupid enough to buy 500k houses on 60k salaries because, when it comes right down to it, they aren't too bright, are they? And some people just aren't you know.
And I think that is perfectly fine. Again, this is the first world, and people, no matter how stupid, should have the chance to do it again without mean-spirited 'i told you so's' and other righteous indignation. sort of like that story about the Samaritan where everyone just walks by never reaching out a hand...this story made me sad.
Binko writes:
Storage has my hopes in it, said Mr. Martin, who sleeps on a foldout bed in his mothers guest room. I dont tell anyone this, but at least once a week I go over and look at my couch, my refrigerator, my TV stand, my mattress and realize I did have a life, and maybe theres a way to go back to it.
It is a sad commentary on Americans' attitudes that an educated man believes his life is defined by a refrigerator, a TV stand, a mattress and other transitory possessions. .....I wish I could tell this guy that his life consists of his relationships, the health of his body, the knowledge of his mind and his actions. Get off mom's couch and go the library; maybe learn a new skill; or find a new hobby; grab paper and pencil, go for a hike and learn to sketch; walk downtown and volunteer for service at a charity; join the Y and get in shape; find a spiritual community to join. Anything.
After I finished gagging at such sanctimonius drivel, I was able to type.
Read the article. The man is 50 years old. He was a manager in the tech industry and lost his job 9 months ago. He is now so broke he ccan not afford to pay for housing (house or apratment.) Given that he was a manager, he probably had health insurance through his job and at 50, is struggling to hang onto it through COBRA and probably paying around $600-800 a MONTH.
His health is at risk unless he can keep the COBRA going for another 9 months; and then at risk unless he finds a job with insurance coverage. Insurers think being 50 is a pre-existing condition. Odds of finding a job paying even close to what he made are probably between slim and none - he is FIFTY. It takes a 50 and older 2-3 times to find any job than it does someone in their 30s. People who lose well-paying jobs typically take an income hit of 30% or more in a new job and it takes them 5-10 years to get back to where they were.
Go to the library? He probably does.
Find a new hobby? And PAY FOR IT with what ?
Join the Y? And PAY FOR IT WITH what?
Learn a new skll? Where that does NOT COST MONEY?
WALK downtown and volunteer for a charity? The man is in CALIFORNIA - that place doesn't even have sidewalks and one needs a car to get anywhere. So drive somewhere to volunteer? And PAY FOR THE GAS WITH WHAT?
Spare us the psycho-babble claptrap. I understand what the man meant when he said that his stuff in storage represents that "I did have a life, and maybe theres a way to go back to it. He had a job. He had a place to go everyday. He had work to do which was valued by others. He was 'normal' in that he had a place to live of his own- and wasn't camped out at his elderly mother's on a cot. which is not exactly the 'normal' lifestyle for a 50 year old manager. He could make plans for the future - something that requires MONEY comng in. His friends and acquaitnances didn't look at him funny and try to avoid seeing him so that (1) they are not reminded that he is a 'failure' (as defined by this vicious winner take all economic system) and that they could be in his situation too one day and (2) he is pestering them for 'contacts' and 'job leads.' In his situation, he is basically a social pariah that those with jobs and incomes would rather avoid seeing because it will remind them that it could happen to them.
Then we get this nonsense as "dryfly writes: I don't usually get spiritual on economics blogs but I wish I could tell this guy that his life consists of his relationships, the health of his body, the knowledge of his mind and his actions. Get off mom's couch and go the library; maybe learn a new skill; or find a new hobby; grab paper and pencil, go for a hike and learn to sketch; walk downtown and volunteer for service at a charity; join the Y and get in shape; find a spiritual community to join. Anything. These are the things that define your worth as a human, not the junk you bought at Walmart or the tract house you parked them in.
Even try moving & starting over - North Dakota would probably jump all over him, especially out in the western parts where they are drilling what was once uneconomical fields - they need managers "
Have you ever tried moving when YOU DO NOT HAVE ANY MONEY? The guy is broke. What a spiffy idea. Pack up the car and take off for North Dakota and go around trying to apply for jobs. Where is he going to live? In his car? How is he going to pay for it? Rob a bank as they sure won't loan t to hm with no job? How is he even going to get the money to go? Maybe he could search for jobs online but employers in ND would still want an interview and not many will pay for the trip for a lower or middle manager.
"Allen C writes:
"The concept of sharing resources may be beyond many of them."
Living within one's means includes saving for downturns. I suspect Bill Martin's spending habits during the good times left him ill prepared for more difficult times. "
Writing fiction are we? Doing the 'it has to be that person's fault and they did something wrong' because if I think it could happen to anyone, even me, then it would be really really scary? Looking for the scapegoat and trying to find a reason that it would happen to them and not to you is so-o-o-o-o pathetic.
Jeez AnnS, while I felt the same outrage reading what was posted here, I think brining up the Good Samaritan story pretty much said it all, don't you?
I mean, here's everyone here walking by this man and no one's talking about HIM, they're all talking about THEMSELVES and their beliefs. One of the sadder threads on CR for many reasons...which is why I said it made me sad.
Although I have to admit that the Ipodius extreme bullshit award goes to the "you are more than your posessions" post. For fuck's sake this man should get a little respect as a human being for HIS view of where he is, not some sanctimonious platitudes...
ipodius, were you a man of the cloth in a former life?
Years ago, I was involved in the US Lines bankruptcy, representing a company that insured the cargo containers. We never found thousands of them, they became third world housing.
Re: Stuff
This brought to mind the bumper sticker I used to see on big RV's rolling down I5. The sticker said: He who dies with the most toys wins". The other one that used to give me a smile was: "I'm spending my kids inheritance".
I know a couple of guys who own self storage. I will have to ask them about the article and what their experiences have been.
One guy told me about live aboards who mess with the electrical systems and cause some of the metal in the room to be "hot". His units have low amp circuit breakers so it is impossible to use a coffee pot without blowing the breaker.
LOL...a little known fact about Ipodius is that he's going to get a PhD in early Christian studies. So I know a little about such things
You know, if you're going to do a PhD, you should do it in something utterly useless but completely fascinating, don't you think? Like economics LOLOLOL
Whoa, ipodius. And here I thought I was kidding. I didn't know I was psychic.
Okay. I better take a breather and recuperate from this one.
Yes, but you know Outsider, I could never be a man of the cloth. I mean, children's ears would have to be covered once i got going. Although I would love Tanta to do the collections..."put your money in the f&*ing basket!"
But what is interesting is to see people's reaction when they figure out that i know quite a lot about things biblical, especially when i tell them what the Greek really says. They usually just stop talking. I mean, people don't want their beliefs challenged now, do they? wink
LOL...a little known fact about Ipodius is that he's going to get a PhD in early Christian studies. So I know a little about such things
oh... do tell
Oh abraham (shouldn't you be at a bris or something?) this is an econ blog, you don't want all the boring contrasts between first century writings and the gospels and the fact that they contradict each other. That's best saved for when my thesis is published or when i reach my dotage and write books.
But I will go on about the need not to judge people on their economic choices and instead to push to teach and regulate things so that people are protected from...themselves. The sin here was committed by those who wrote the loans knowing full well these people couldn't afford what they were giving them. Which is why I think Countrywide's execs should be doing the perp walk.
Oh abraham (shouldn't you be at a bris or something?) this is an econ blog, you don't want all the boring contrasts between first century writings and the gospels and the fact that they contradict each other. That's best saved for when my thesis is published or when i reach my dotage and write books.
fair enough- point me in the direction you spoke of, and i'll peruse on my own. tia
Well abraham, here's a hint: the letters of Paul are the oldest documents in Christendom. They pre-date the gospels which are, actually pseudonymous, having been given their authors late in the second century and the range of dates for writing run anywhere from 70AD up to 120AD. So they weren't written by eye wittnesses. These are also non-cannonical first century letters as well. Now, it is utterly fascinating that, if you read these, you get no sense that the big J even existed anywhere in time proximate to the authors of these first century letters...different authors across different geographic areas. Puzzling, huh? No corroboration of any gospel stories whatsoever and no quotes of the big J either, even when it would have served their arguments.
Start there and learn to read ancient Greek, Latin, Hebrew and a smattering of Aramaic grammar, and then read your way through about 1000 manuscripts. Then you can probably make some hypostheses.
Ipodius, you're starting to sound like the guy at the end of the Werner Herzog movie Aguirre, The Wrath of God, as he's floating alone on a raft on the Amazon River, lecturing to an audience of monkeys how great he is.
lecturing to an audience of monkeys how great he is.
I'm sure that didn't come out the way you intended
I'd much rather talk about the plight of people who lose their homes, such as the topic of the thread.
They usually just stop talking.
I think we're all a bit speechless at this point.
It is a sad commentary on Americans' attitudes that an educated man believes his life is defined by a refrigerator, a TV stand, a mattress and other transitory possessions.
Yeah, I believe they made a movie about that called, Fight Club.
"You're not your job. You're not how much money you have in the bank. You're not the car you drive. You're not the contents of your wallet. You're not your fucking khakis. You're the all-singing, all-dancing crap of the world. "
Angry enough, AnnS? Sanctimonious drivel? I guess you could look at it that way if you want to.
The point is this guy still has choices. As somebody said, this is not the third world. There are other ways to find satisfaction in this life besides summing up your material possessions.
For the most part people lose a bunch of their junk and all they can think is "I can never be happy again until I get my stuff back". That's actually not true, but most people are blind to the alternatives.
Have you ever tried moving when YOU DO NOT HAVE ANY MONEY? The guy is broke. What a spiffy idea. Pack up the car and take off for North Dakota and go around trying to apply for jobs. Where is he going to live? In his car? How is he going to pay for it? Rob a bank as they sure won't loan t to hm with no job? How is he even going to get the money to go? Maybe he could search for jobs online but employers in ND would still want an interview and not many will pay for the trip for a lower or middle manager.
Ya actually I have moved broke but that was when I was young. I moved with my folks as a kid when they were in that situation though not quite a dire - in their 50s - more challenging for sure.
BTW not having stuff helps. You just go. Seriously.
Live in a car? Sure. Or shelter. Or ask a church. Or ask the company for help finding a 'temporary place'. Rural America is damned poor they'd understand & half expect it. I mean why else would somebody leave southern California for the cold barren plains of North Dakota? The weather?
But how the hell else can North Dakota get the people they need? Its a place people leave, not a place they go to. He'd probably get interviews and get the trip paid for IF they thought he'd really take the job and move (most wouldn't).
I wasn't joking - I know companies out here, they are staffed to the eyeballs with retreads & start-overs. Same with a lot of fly over... rural Minnesota, South Dakota, Nebraska, Wyoming.
Is it going to be easy? No. Is it going to be like his life as a manager in technology in California? No. Is it a reboot? Yes.
I have people on my street that have done EXACTLY this - one brought his family of six and everything they owned from the inland empire in one minivan - mom, dad, four kids, their dog and everything they owned in one fricking van all the way from California to rural Minnesota to start over. They rented across the street for two years until they got enough saved to buy a house & moved. The new renter moved in and bought the place from the landlord - he was a divorced dad with a kid (wife walked out) - he moved in to this small town because he could get a job locally that would make it easier for him to be a single dad. Moved in with one small U-Haul pulled by a sedan for the two of them. Nice people - they'll probably be fine.
Damn near everyone in my world is a retread or a misfit - I kid you not. Towns like mine are full to bursting with them. The guy in the article would fit right in. he'd be like family overnight.
I mean how much do you really think it would cost to do this? To move here? I'm telling you right now it would be less than a couple grand total - first couple months rent up front included. Sell the crap in storage, hit mom up for a little and go.
But you have to get off the couch first. That is the key.
Reminds me of Chekov's "the Cherry orchard". The family refuses to cut down the orchard and pay the bank. The bank takes the farm,so they lose the beautiful orchard anyway.
I know a guy who got kicked out of his "art space" unit for living in it. Now he lives in his van. He works but he refuses to pay rent for anything and believes he is "beating the system." In reality he is an alcoholic, and living in a van is the easiest way to keep his addiction paramount.
In spite of his problems with material life, he is probably the most Christ-like character I know. Never has a hard word for anyone, counts his blessings (and really feels blessed), and is always willing to lend an ear or a hand. A good egg in a sad shell.
A good egg in a sad shell.
Wow, Trevor. That is quite a story.
Damn near everyone in my world is a retread or a misfit
That is so un-east coast that I really can't relate. Never knew a Do-over-ville existed. But I think it would be a refreshing change from the politically correct-ville.
A tangential comment -
Back during the dark days of the '80s recession, two experts in bankruptcy law (Jay Westbrook and Carol Weinstein, bankruptcy professors who were both associated with University of Texas School of Law at that time) corroborated on a great little book about the philosophy of American bankruptcy law entitled "As We Forgive Our Debts ..."
While bankruptcy law may appear dry as dust, it is the stuff of revolution and conflict. The matter of debt forgiveness is often at the center of profound social upheaval, and it is important to understand how our fragile economy rests in part on how we treat debt.
The genius of American bankruptcy law through most of the last century (until the credit card companies perverted it to their own short-term ends) was to uncouple debt from any moral judgment about insolvency.
Insolvency is not a sin; it is not a moral stain; it is not a sign of some lack in a person's intelligence or character. Credit and debt are the yoked engines of commerce, and default on debt is the surcharge associated with the creation of economic wealth.
Default is extremely important. It is the mechanism by which industry may gauge the limits of capital, and adjust its output accordingly.
If one sees insolvency as a crime, and bankruptcy law as a punitive statutory tool (say, by designing the law to severely restrict the ability of debtors to discharge their unsecured consumer debt) then to be consistent, one must also see the extension of credit as nothing more than an incitement to crime.
But if one takes this course, one also assumes that the proper role of the consumer is to be a permanently indentured servant to industry, never released from debt, and never permitted to wipe the slate clean.
Push the debtor hard enough; make the system of debt forgiveness brittle and unyielding enough; and the next thing you know, you'll be trying to explain yourself over the noise of the crowd at the Bastille while they press in on you with pitchforks and torches.