Savings Rate Remains At Lowest Since 2008 As Impact From "Squatters' Rent" Increasingly Negligible

Tyler Durden's picture

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LawsofPhysics's picture

Imagine that, "economic benefits" from not paying rent.  Wealth effect bitches!

NoBull1994's picture

If the Feds made it illegal for cable, DirecTV, water and power to be provided to defaulting homeowners, the world would be much more fair and we'd be seeing FAR different human behaviour...

Dr. No's picture

So as I understand you, you want the Federal gov to make a law limiting the ability for companies sell to people who are in default?  I think you are on the wrong web site.

NoBull1994's picture

No, they can sell to you, but you can't have services provided to you or hardware installed on property on which you are in default.  I'm not in favor of people defaulting on their mortgages and then calling directv to have a dish installed on a house on which they are in default.

ZH is a website of personal responsibility - everyone should suffer consequences for their greed - banks, insurance companies, corporations, individuals.

Dr. No's picture

Then why have the gov step in and make a law if people are responsible for their own actions?

Peter_Griffin's picture

Paying a mortgage double the size of the house's value just doesn't make sense.  Even if homeowners contributed to the housing bubble doesn't mean they conspired to it.  It is pretty plain to see homeowners got burnt on this deal, with .gov paying the corp. side rather than the individual. 

“So I say to the American people, you be squatters in your own homes, don’t you leave.”  -Congresswoman Kaptur

cranky-old-geezer's picture

Advocating more govt control over people.

You're definitely on the wrong site.

... and in the wrong country.

It's not government's job to regulate people's lives, stop people from being deadbeats, stop people from doing things YOU view as "unfair", etc, ad nauseum.

Government's job is to protect people's rights.  PERIOD.   

Have you never read the preamble to the Constitution?  Or the Declaration of Independence?

falardea's picture

So you would rather the squatters went to a shelter somewhere.  The deadbeats.  They just need to go out and find a job, right?

 

Right, so all these people who bought into the bubble are the jerks in this society.  Why did I/they get myself/themselves into a mortgage as a sole income on a house?  I had spent YEARS paying off my $20k of credit card debt I accrued in college.  Obviously it's ALL on me to see through the marketing and MSM hype about housing as an investment.  Fine, I'll take responsibility for the BAD decision to buy a house I am now $50k underwater on.  But when I had to make a decision about food or mortgage, and the bank can only take the house as collateral, what do you think my choice is? 

 

Would you rather us "squatters" just move out and let the crackheads move into your neighborhood?

 

Before I lost my job last Oct, I really knew nothing about our financial system, the Federal Reserve, JPM, GS, et. al.  I knew nothing about bubbles.  I was a good little worker bee engineer,  working 60+ hours a week on salary (essentially working a second part time job for free), paying my taxes, plugged into the Matrix like I was suppose to be.

 

Why should I participate in systemic robbery?  If you don't like the fact that you're still buying into "financial responsibility", don't blame that on me.  How many times has Donald Trump declared bankruptcy?  If the 1% of the population that hold >25% of the capital in this world don't take "financial responsibility" seriously, why do us poor folk?

NoBull1994's picture

I don't feel sorry for you.  In a capitalist system, "knowing nothing about our financial system" is your fault, not mine.  And yes, I'd like to see people be forced to move out and move in with their parents or friends.  P.S.  donald trump has never filed personal bankruptcy - entities that bear his name, however, have.  big difference.

falardea's picture

First off, we are NOT a capitalistic system, that ended when our legal system decided corporations were actually "people".  We are a fascist-corporatist system that rewards narcacism.  When a CEO is obligated by law to hold no other priority over profit, what can we possibly expect for the "people"?  What kind of captains of industry does such a system foster?

 

Second, I don't need, or want, your F-ing pitty.  I understand I got myself into this situation, and I am dealing with the consequences of my actions.  I had an 800+ credit score before losing my job and had to make choices.  The bank I got a mortgage from gave me a loan on the assumption that they would get the house if/when I defaulted.  So be it, that is what I signed.  They will take it when they are ready, but until they are ready to take legal possession of the property, it is mine, legally.

 

As far as knowing what I needed to know about the financial system that I was born into... well, forgive me for not seeing past the propaganda BS of the public school system and their textbooks.  Instead of going into economics, I went into aerospace engineering.  God, how stupid am I.  I learned one definition of a derivative... can you give a concise answer to what an economic derivative is?  You saying that I should know enough about our financial system not to be taken advantage by it is the same as me saying you shouldn't fly unless you know how lift works, or how a turbine engine works.  (Well, if you get in a crash, you should have known the consquences).

 

I'm not asking for some jerk like you to reward, or even like, my decisions, but who the HELL do you think you are to suggest we create MORE laws to legally steal from people.  'tard

 

P.S. if I could afford to incorporate myself, I would be able to shield myself from the same personal liabilities Trump does.

jmc8888's picture

Wow AllBull1994. (and I sure hope that doesn't mean the bs contract against america)

Here is something you don't understand. We don't have a capitalist system.

Meanwhile forget the real problem, the structure and power at the top, lets go and attack 0.0000 percent of the problem and somehow think that will make things better and fairer.

NO, it would just tilt the scales more to TPTB.

For someone responding to another about not know our system, you sure and the hell don't.  Capitalism...ha.  We haven't had that for 40 years. 

We have fraudulent debt based monetary system, and one that is completely against what our founding fathers fought for.  So you're against our founding fathers, you want to tilt the scale more towards the big fraudulent corporations....and their legal tricks.....Trump hasn't filed bankruptcy, but his corporations have.  (and you call yourself nobull...sir...you are ALL BULL)

 

Jason Bourne's picture

You have become the fucking problem that is the fucking plague of the USA.

When are we going to stop fucking picking the worst of two fucking evils and settling for that - WHEN!?  When we pick the worst of two evils all that we accomplish is the evil we are trying to avoid, we just end up delaying it.  

We are "Never" going to stop - because we are a weak no balls LOSERS - which is why your justifications will always be the justification for making decisions that continue to FUCK ourselves as we go down the road.

 

People have to stand someone has to start doing the right thing even if the right thing costs them.  Pay your fucking mortgage - I don't give a fuck if whoever holds it can't fucking prove they hold.  You DID borrow the money - RIGHT?  You fucking did borrow the money!

 

Pay the money back asshole PAY THE FUCKING MONEY BACK.

(Now if you feel that the bank and the system fucked you (they did), then HURT THEM BACK, but find the right way to hurt them back.  In NO scenario are you and anyone else entitled to stay somewhere if you are not paying.  

Kick every fucker who is not paying OUT.  Yes I would rather have a crack den which creates no moral HAZARD, but pisses everybody off into maybe doing something to clean up their nieghborhood than a DEADBEAT ASSHOLE.

 

Oh and in case there is any fucking doubt - YOU - are responsible for every fucking decision you have made - including this one.

falardea's picture

"You have become the fucking problem that is the fucking plague of the USA"

 

Of course I am.  My mortgage is what fucked the housing market.  It has NOTHING to do with the big players like JPM, GS who have the capital to manipulate markets.  No, you're right, I'm the problem with the entire system.  My home lost $50k almost overnight because I was still paying my mortgage.  The company I worked for started "right-sizing" because I wasn't putting in the effort.  While the VP of engineering got his $250k year end bonus and gave his team a 10% pay cut, I can see how you might think I am certainly the fucking plague of the USA.  Pinhead.

 

"Pay the money back asshole PAY THE FUCKING MONEY BACK"

 

With what asshole.  I just cashed out my last 401k to pay off (and close) the credit cards that jacked my rates to 30% (EVEN THOUGH I WAS PAYING, more than mins).  Do I liquidate everything I own to cover the loss the bank is going to incur?  That was not part of the agreement I had with the bank.  I'm liquidating, but craigslist sales still isn't going to cover it... so, with what?!  Send me to prison, at least I'll know I'll be eating in 3 months.

 

The bank made the same decisoin I did.  Just because the elected officials in DC decide you and I (yes I paid taxes too) have to pay the consequences for their decision, don't blame me.  ASSHOLE

Jason Bourne's picture

 

Ok I got a little excited and ahead of myself with the "pay it back" part.  I'm referring to staying in the house while paying nothing.  You are entitled to default, and I'm sorry you are in a position that worked out that way.

 

That is not the issue here however.  You are defending the "squatting". The issue is the attitude that comes with being able to stay in the house and pay nothing, while using the "fucking" of the system by others to justify it.  Nope.  The system needs a full enema and that has to start at EVERY level.  When I read a post or comment about people staying in their house and not paying anything and being okay with that...the blood starts to boil.  

 

Its the cumulative "fuck you" by everyone to everyone (starting at the top) which will lead to the full fuck of the country.

 

jmc8888's picture

Wow, another guy who says...just pay it back.

Don't you understand a debt that is unpayable is a bad debt, given to someone that was more interested in repackaging and selling it.  No they don't own it, and it doesn't matter if they borrowed it, the person has been defrauded, and you are saying they should pay it. 

Find the right way to hurt them back? That's exactly what he is doing.  What do you want him to do, write a letter? Pray?  You hit them right where it counts, with what THEY did wrong, and probably the only business you are doing with them.

Quit being an apologist for a crap system, and continued enslavement.

I'm also sure when they took out the loan, they weren't expecting an absolute crash created by the same people who issued the loan.

So if he's responsible for every decision, what about the banks....when are they responsible for even a SINGLE one.

I swear people who have sucked corporate cock their whole life still like the taste of it after all this crap is amazing.

Or are you afraid that the system that screws everybody over but those doing the screwing...might just spread to your neck of the woods?  Well guess what, him paying off his loan, or EVERYBODY paying off their loans, which is impossible, wouldn't change a damn thing in terms of the direction we're going.

So pay it off? Why. It's all going to collapse anyways.  Brought to you by corrupt individuals who created this wonderful system.

Glass-Steagall is the only way to right the ship, not paying off impossible loans.

Maybe the banks should of done due dilligence to see if it was possible for these people TO pay it off, even sans economic disaster.

 

It is funny though, someone who says the person who isn't paying....is a weak balls loser and is advocating to pay off the loan? No it's the person that DOES pay it off that has the weak balls.  Talk about projection.  Talk about seeing thing completely backwards. Realignment is in order.

Wake up man, you're currently an idiot, but good luck changing that, at least you are here.

Dr. No's picture

Pay the money back asshole PAY THE FUCKING MONEY BACK.

 

If the mortgage contract is like mine, in the event of my not paying it back, they get to take the home.  So why are you stating the poster has to pay it back?  As I read the contract, there are two options, not one.

andybev01's picture

Ab-so-fucking-lutely.

There is no moral or ethical reason to pay off the mortgage.

It's BUILT INTO THE CONTRACT.

A: You pay off the loan, you own the house (as long as you pay the taxes and up until you die [can't take it with you]).

B: You default and the lender takes posession of the house.

It happens both ways, every day.

 

Dr. No's picture

Its funny how people get caught up in the emotion of it.

Jason Bourne's picture

If you can't pay off the loan you can default.  That is an option, an unfortunate but valid option.  Default and move.

 

Pay or default and MOVE.  "The fuck" to everyone else is people who default and then STAY in the house, and to top it off use the fucking of the nation by the banks/politicians/oligarchs as an excuse to stay in the house and pay NOTHING while others have to pay their way.  THAT is the FUCK, and that has to stop.

 

Mow the house down, let crack dealers stay in it.  RENT it to someone who can pay, but the  defaulting party has to go.  There has to be consequences for defaulting (in addition to credit rating).  There cannot be a system that is sustainable that allows some people to stay in their house while not paying while others struggle to pay.  That is absolute BULLSHIT.

 

The bankers continue to fuck us, the political leaders fuck us, the oligarchs fuck us and now we fuck ourselves too.

 

The morals and ethics here are the "free ride" not the default.  Defaults happen.  Don't make excuses for staying in the house without paying for it.

 

Because the comment here is related to the free ride people are getting by staying in their house without paying, you assume that there is no wrath for the bankers etc that created the problem in the first place.  WRONG.  They are the bigger fuckers and they will get their due, that one hasn't been figured out quite as yet....

 

But that has NOTHING to do with the issue above.  You connect it to excuse your actions.

 

Dr. No's picture

By the letter of the contract, it is not a free ride.  Mortgages outline in the event of a default the lender has the right to foreclose.  Since foreclosure is regulated by the state, the lender entered into the contract knowing the terms and cost of a foreclosure.  It is built into the contract.  Staying free of charge for 6 months is within the legal rights of the foreclosed in some states.

 

Now, if you feel the bankers after successfully marketing 125% loan to equity value, interest only, etc type loans entered into the contract unknowing that housing prices could decline and therefore did not properly set the contrat terms, they may have basis for breaking the contract.  Seems like a stretch though.

cranky-old-geezer's picture

Pay the money back asshole PAY THE FUCKING MONEY BACK.

Kick every fucker who is not paying OUT.

Let us know when YOU become Dictator of America.

Until then SHUT THE FUCK UP ASSHOLE.

RKDS's picture

Conversely, I'm wondering how long it'll take lobbyists to write and pass a law forcing us to buy cable TV or suffer some sort of ridiculous fine.  Afterall, that was their solution to the health insurance problem, wasn't it?  Look, if I could afford a TV subscription, maybe I'd have one, but another unfunded mandate isn't going to change that.

baby_BLYTHE's picture

They already did. There was a government program, a few years ago, that provided vouchers for the transition from analog to digital television.

There's only one year left before over-the-air television signals switch from analog to digital, and many watchers who rely on "rabbit ears" or roof-top antennas will wake up to blank screens without the right equipment.
To that end, the government is offering $40 coupons for anyone who needs to purchase a converter box to properly watch digital television on an analog set.

The National Telecommunications and Information Administation (NTIA), an arm of the Commerce Department, is offering the coupons through its official digital television site.

 

http://www.consumeraffairs.com/news04/2008/01/dtv_vouchers.html

Dr. Kenneth Noisewater's picture

I'll go with that, just as soon as the Feds make it illegal for corporations that default on properties they own to buy goods and services such as IT, janitorial, HVAC, power, water, etc.

Do that first and I'll agree with you.

Idiot.

Dr. No's picture

Havent you been keeping up with the latest economic theory?  Wealthe effect and GDP boost can come from many places such as not paying rent, printing currency, and 9.0 earthquakes.

oogs66's picture

Ferraris and Food Stamps.  A nation divided.

SheepDog-One's picture

At some point soon, reality swoops in like a wrecking ball. 'Economy dependant on people not paying their mortgage' lol ridiculous.

wombats's picture

What?  Are we actually supposed to pay?

Cognitive Dissonance's picture

This is good......right?

Not saving for the future, but spending what we don't have on what we don't need is good.......right?

Someone, anyone, please tell me my insanity is perfectly normal and even healthy. I need to know that I'm OK and you're OK. Otherwise I've got quite a few cognitive dissonances to sort out and that doesn't look like much fun.

Village Idiot's picture

"Someone, anyone, please tell me my insanity is perfectly normal and even healthy."

Can't say that it's healthy,but it's becoming normal.  One foot in front of the other, brother...just keep moving.:-)

malek's picture

Hey, it has worked for the last 20 years, why shouldn't it continue working?

/sarcasm

mayhem_korner's picture

Thanks for keeping on the squatters rent metric.  I view it as a leading indicator of money velocity.

It's also indicative of the persistent malaria of consumerism.  When something as fundamental as credit availability changes so drastically, yet "borrowing" continues and flows away from durable goods, that's symptomatic of real, real trouble.

scragbaker a cape cod clamdigger's picture

" PERSONAL INCOME INCREASE" IS BULLSHIT FOR MOST PERSONS.  Wife was making 80K in September 2008.  By January 2009 Pay at same job cut to 52K.  Many "higer up's" were let go.  This story has been repeated thousands upon thousands of times all across America since Fall of 2008.  60 MINUTES did a show on this issue highlighting Silicon Valley workers / executives.  Healthcare workers get about ten dollars per hr.  I used to pay that to construction laborers in the mid 1980's.  That would equate to around 28 dollars per hour in TODAY'S dollars.  How can a person live on 10 dollars per hour?

cowdiddly's picture

My Dad made $9.50hr building bridges in 1968, 43 years ago. I won't even mention what his house payment was. For some strange reason I see the governments future tax reciept projections a little, shall we say optimistic. Got Bananas? Got Billy Club guards? Oh you drive a Bentley, sorry come on through.

Bodhi's picture

After graduating college in 1992 I had a job testing video games paying $8.50 an hour. 19 years later the going rate is only $10.00.

dcb's picture

this is the bernanke recovery plan. make sure people have to spend to help the economy and can't save or get real interest rates. it was clearly the result of what would happen with our dear fed at the helm of economic policy.

Atomizer's picture

Section 8 revenue stream bitchez. LOL

PulauHantu29's picture

"No one could have seen this coming," said the Bankers to Congress.

sudzee's picture

With negative real interest rates what incentive is there to "save".  

GubbermintWorker's picture

I think tthere is a BIG incentive to save....in gold and silver.

White.Star.Line's picture

The "perfect business plan" is to reduce all personal incomes to 0 while increasing corporate profits to 100 percent.

As the profit paradigm reaches its climax, all companies must fold into one, and all humans eliminated except one, the CEO required to operate the "One World Corporation".

Of course to see this plan perfected, the CEO must kill himself in order to reduce labor costs to 0.

Dr. No's picture

Any good accountant could convert a CEO's base salary to a deferred compensation bonus plan thereby reducing direct labor cost to zero at a predefined date.  The account could then be executed after that conversion.

andybev01's picture

I love you, you evil genius!

speedy's picture

I suppose if they are spending their savings buying gold and silver coins, it's still spending and not saving.

ptoemmes's picture

Wife is in the Florida Retirement System (FRS)and is within 5 years of full pension.

Despite the potential income that will provide me/us I do think that government pension plans - and benefiut plans in geenral - need an overhaul.  I am a tax payer too ;-)

In part, to that end, due to recently signed state legislation FRS participants will start paying 3% of their gross pre-tax after July 2011 for pension contribution.. 

Many (unionized) teachers will als be paying more for their healthcare benefits.

I don't think Florida is the only place that this is happening.

My point  is that this will also have a dampening effect on discretionary income, savings, etc. - ours at least.

Pete

RKDS's picture

 I don't see how this should surprise any thinking person.  Maybe you have to work for a state agency for going on 4 years without a COLA despite all the inflation and tax hikes, to understand.  How the fuck are you supposed to save when a professional day job and a retail weekend job together barely cover the bills?  Hey, I know, another round of pay cuts or new consumption taxes, that get the economy going _this_ time I swear!  All so the banksters and their minions never have to suffer the consequences of incompetence and failure...

JMT's picture

Gee I don't know.. All I know is I ask myself How the bleep can everyone afford to shop till they drop at the mall every few days, eat out every night, spend $400 on cable & smartphone service...  Tell me this exactly...    And when I was making close to $100,000 and living in CT I owed over $3,000 in federal taxes every year in addition to state taxes but on that salary I was barely able to make rent let alone buy a home. And of course I wasn't 'cool enough' to hang out at all those 'eateries' that have opened up in Stamford. Anyone from Fairfield County CT would know exactly what I am talking about.

I move to MA -- no better here -- just worse weather and the probably the shittiest roads in the nation which require spending at least $100 a month on a 4 wheel alignment

Hannibal's picture

Savings, save (from) what?

Dr. No's picture

Precisely.  gold and silver coins do not show up on the M1 or savings rate charts.

EDIT: this was suppose to be a reply to the post above.