Hard Times

Almost half of all Americans and 57% of  American children are now low income or poor. The Republican response? What about those anecdotal poor people who are living in nice houses and have wide screen TVs? Know anyone like that?

http://usnews.msnbc.msn.com/_news/2011/12/15/9461848-dismal-prospects-1-in-2-americans-are-now-poor-or-low-income

Citibank was recently given a slap on the wrist by the SEC for creating derivitave securities that it sold to investors and then bet against. We need real reform:

http://www.theatlantic.com/business/archive/2011/12/too-big-to-stop-why-big-banks-keep-getting-away-with-breaking-the-law/249952/

Wall Street is now fighting legislation to limit speculation in the commodities market. A few people who make good bets make a lot of money this way, but for consumers and producers, speculation creates wild price fluctuations, ensuring that at times basic necessities like food and energy are unaffordable, or conversly, that producers can’t make back their cost of production.

http://www.truth-out.org/robert-reich-remarkable-political-stupidity-wall-street/1323615346

Since health insurance costs have created hard times for so many Americans, I am sharing this link to an interview with Wendell Potter, a former health insurance executive who blew the whistle on his old boss Cigna:

http://www.phawker.com/2011/12/06/coming-attraction-the-man-who-wasnt-there/

More evidence that the “free market” does not always serve the best interests of the people.

I’ve worked as technical writer in the financial services industry for 20 years. It was never my first choice as a career or industry. I took the jobs and did the work to support my family.

Like the captive to necessity that I am, I have tried to view my situation in the best light possible, moderating my youthful idealism with pragmatism and the belief that most of the people can’t have been wrong about our financial markets so much of the time.

That all changed after the financial meltdown of 2008. I had been documenting some of the same risky derivatives and blind mortgage pool trading that contributed directly to the credit collapse that necessitated, or so the politicians said, the 700 billion-dollar bailout of banks “too big to fail.”

I had been telling their traders and portfolio managers how to use tools that would help them publicise risk and privatise reward, eventually pushing hard-working people, including some I knew, out of their homes while financial CEOs lined their pockets with the profits from their malfeasance.

I support the Occupy movement because I believe that the influence of corporate money on politics has grievously harmed our economy. I believe that the gap between rich and poor in this country and the corruption of elected officials by money has set us on  fast track to becoming a banana republic. I believe that we need serious reform now and that a widespread popular movement is the only way to get the politicians to pay attention. The Occupy movement has grabbed their attention and energised progressives throughout the country. I have no faith in the mainstream media to report on the Occupy movement fairly, therefore I am lending my voice through this blog. As I cover these hard times, I hope you will lend me your ears.

Because I depend on the financial service industry to take care of my family, my public opinions must remain anonymous.

I am posting this link from NPR because it provides quotes from real “job creators” that they have no problem paying a 2% surcharge on their income tax to pay for an extension of the payroll tax cut for the middle class.

http://www.npr.org/blogs/itsallpolitics/2011/12/09/143398685/gop-objects-to-millionaires-surtax-millionaires-we-found-not-so-much?sc=fb&cc=fp

In a steady, near-freezing drizzle, a group of protesters that defied categorization, marched from the Dewey Square Occupy Boston encampment to the aging Charlestown Bridge. Union workers led the crowd in chats of “What do we want? Jobs!” and “When do we want them? Now!”

Here’s a good article from South Coast: http://www.southcoasttoday.com/apps/pbcs.dll/article?AID=/20111118/NEWS21/111180335/1018/OPINION

Starting around 2 PM on Friday, September 30, protesters carrying signs, banners, bullhorns and improvised drums converged on the Boston Common for a 3 PM rally, their numbers likely boosted by a warm and sunny fall day of rareperfection.

The rally and march organized by Right to the City and dozens of other community groups promised to “Take Back Our City” on behalf of 50 local families who are fighting or have lost foreclosure proceedings on their homes by Bank of America .

Ian Williams holds a sign from Right to the City
Ian Williams of Burlington, Vermont said he travelled to the Boston rally because “It’s important to participate in the process of dissent,“ stressing that he did not trust the politicians and bureaucrats in Washington to straighten out a society and economy that he sees as increasingly in “disarray.” “The Bank of America got a ridiculous deal during the (TARP) bailout, and they should be punished,” he says, referring to what he sees as their culpability for the mortgage bubble and their failure to pass along relief to the general public after the bailout, and the fact that they have paid no taxes during the past three years. A self-described “20-something with a BA,” Williams is struggling with the dearth of opportunities for recent college graduates. He speaks articulately about his experiences working with a small community organization run by a group of Somali Bantu refugees in Burlington through AmeriCorps VISTA last year and of his support for the Vermont Workers Center, who played a pivotal role in getting universal health care passed in that state. Right now, the 2008 East Asian Studies graduate is working in a warehouse.

Amaline Maxi
Amaline Maxi stands in front of the bandstand, leaning on a cane and holding a sign identifying her as a representative of one of the families who have lost or are losing homes to Bank of America. In 2006, she explains, she bought a house for $400,000 at the height of the housing bubble. A few years later, it was worth about half that. In the meantime, the monthly payments on the house went from $3,000 a month to $4,000, which Maxi could not afford. She was able to qualify for a loan for $225,000 from Boston Community Capital, a community development lender, and tried to negotiate a short sale with Bank of America, which refused the offer. Instead, they evicted Maxi, her husband and two children in July, and sold the house at a foreclosure auction for $185,000. Maxi was in serious car accident in June, which left her with a broken pelvis, shoulder and neck and is currently unable to work. Her family of four is living in a two-bedroom apartment with her 89-year-old father.

“I want Bank of America to stop the evictions,” she says. “It’s always the middle class who pay. I don’t want this to happen to others.” “It’s very hard,” she says, her voice breaking.

Boston Police motorcycles in front of Fidelity Investments
For a few hours, along a few blocks, the city did seem to belong to the 2,000 or so protesters who turned out. While the march was to end on the steps of the Bank of America on Federal Street, along the way marchers chanted slogans like “They got bailed out, We got sold out,” and targeted other corporate miscreants, like the Hyatt and Verizon, for their labor practices and Fidelity Investments for their willingness to take a huge state tax break while fighting affordable housing and offering only two jobs to local youth this past summer. NStar was also on the list of the scorned for failing to provide weatherization programs to low-income families.

Count Bankula attacks victims at the Bank of America
On the sidewalk alongside the Bank of America, a huge-headed vampire with teeth dripping blood pretended to attack passers by. The Bread and Puppet-like character named Count Bankula, was animated by an actor from AgitArte, an activist arts and cultural organization. When asked if he worked for Bank of America, the Count, affronted, said “I work for all the banks – I am a freelancer!” When it was pointed out that if people have all the money sucked out of them, they will have none left to put in the banks, the Count replied somewhat maniacally, “We should have all the money, we create the money, we bubble money!”

Carol Lomax with sign at Bank of America
Standing under a sign reading “Reduce Principal Now!,” Carol Lomax watched as several protesters began a sit-in in the Bank of America lobby. “I came here because of the unfair practices and the unjust laws that are hurting people all over the country,” she says emphatically. “There are people who are being foreclosed on who are staying in their homes,” she said, adding that she is one of them. “I had to refinance my home to remove lead paint and make other necessary repairs.” She wound up with loans that she could not afford because of the downturn in her business since the recession, and the banks refused to restructure the loans. Lomax, who is a self-employed cosmetologist, says “If it were just me, I would say, OK, I bit off more than I could chew.” But since she sees it happening to so many people in her Dorchester neighborhood and all over the country, she decided to dig in. “They blame the people, but houses shouldn’t be speculated up so high to begin with.”

Kenneth Silman of Worcester is another homeowner in foreclosure who has decided to dig in. In fact he recently faced down his third foreclosure since he entered a mortgage agreement with Wachovia bank in early 2008. When he applied for a loan modification in November 2008 after the bank bailout, Wachovia had been taken over by Wells Fargo. It was only then that Silman learned how non-standard his original mortgage was. Even though Silman had provided Wachovia with two years of tax returns and bank statements, they had replaced his real numbers with three times the amount of documented income. Silman had also put his $75,000 life savings down on the house with the understanding that he would later be able to get some of it back if he needed it, through a second mortgage. It turned out that no bank would take out a second position on the type of mortgage that he had, an exotic bi-weekly variable-rate hybrid with negative amortization, meaning that his equity was guaranteed to go down if there were no changes in the market value of the house. “They created a loan that was set up to fail,” he says. As it happened, the market value of his home went down, and his income fell off because of the recession.

Instead of granting a loan modification under government programs such as Making Home Affordable, Wachovia/Wells Fargo repeatedly tried to foreclose, and Silman has fought back each time, which he says has cost him “tens of thousands of dollars in legal fees, with zero good faith from these criminals.”

Silman is still hoping to settle the matter in his favor. Working with Grace Ross of the Massachusetts Alliance Against Predatory Lending, he drafted and sent a 93a Demand Letter to Wachovia/Wells Fargo and is waiting for their response. If they do not respond within 30 days, Silman can collect up to triple damages and attorney’s fees if the court decides in his favor. Whether they respond or not, Silman must file a suit against them in Superior Court or bankruptcy court, another big legal expense.

Still, he manages to be upbeat. “The turnout was wonderful!” he says of the Boston rally. When he went to a rally against Wells Fargo in Worcester several weeks ago, only a dozen or so people showed up. “I presented the demands,” he says. “I’m the guy who’s angry and who likes to talk.”