The Market Ticker
Commentary on The Capital Markets- Category [Consumer]
2016-06-06 05:00 by Karl Denninger
in Consumer , 366 references
 

This is the sort of article that used to provoke alarm, but now gets a shrug out of me.

NEW YORK (AP) — Two-thirds of Americans would have difficulty coming up with the money to cover a $1,000 emergency, according to an exclusive poll released Thursday, a signal that despite years after the Great Recession, Americans' finances remain precarious as ever.

These difficulties span all incomes, according to the poll conducted by The Associated Press-NORC Center for Public Affairs Research. Three-quarters of people in households making less than $50,000 a year and two-thirds of those making between $50,000 and $100,000 would have difficulty coming up with $1,000 to cover an unexpected bill.

Even for the country's wealthiest 20 percent — households making more than $100,000 a year — 38 percent say they would have at least some difficulty coming up with $1,000.

One of the definitions of being an adult is that you are able to handle your own financial life.

Part of dealing with life is the ever-present unpleasant surprise, and in the adult world those usually come with a bill of some sort.

$1,000 used to be a lot of money.  You could buy a transmission for your car (or a rebuild of your present one) for $500 or so.  A set of four ordinary tires were rarely over $250.  A windshield might be $100.  A water heater was a couple hundred, installed.

Now?

lost key on your car can cost you $500 and I've seen $1k+ bills.  Said keys now can only be made by the dealer as there is an electronic chip in there that has to be "married" to your vehicle's computer, and nobody but the dealer has the software to do it.   It gets worse for some modestly-older vehicles; there are instances where the ECU itself has to be replaced at a cost over $1,000!  Transmission goes out?  $2,000+ virtually every time, and sometimes a lot more.  Tires?  $200 each is not unusual with mounting, balancing and taxes.  Windshield?  $500+, and that "plus" can be big (double or more) if you have fancy electronics in that car.  Water heater?  $500 or more, easily.  AC unit fails in your house?  Get out three large -- or more.  Roof leaking (oh by the way, they all wear out eventually)?  Don't ask.

In short a $1,000 "surprise" is not only reasonable to expect it's utterly routine every few years if not annually in most people's life!

We have a big problem in this country when it comes to our financial situation folks.  It has been caused by the stoking of leverage through policies of both the Federal Government and the tied-at-the-hip Federal Reserve.

Those ranting about The Fed are flat-out foolish or worse; they are either ignoring the actions of major industries and the protection they receive from the Federal Government (e.g. the medical and insurance "businesses") or worse, are excusing same.

I remind everyone that The Fed cannot buy Treasury debt that does not exist.  It would not exist if there was no deficit spending; by definition Treasury debt only exists because government spends money it does not have.

Abolishing or curtailing The Fed will do exactly zero to solve the problem when the underlying issue of debasement is coming not from The Fed but from Congress and the White House

Who sends people to Congress and the White House and allows them to remain there?

You.

Never mind Boobus Americanus' obsession with fruity phones and $100/month cell plans -- that's well north of $1,000 a year all on its own, which is more than sufficient to cover said "surprise."

Either put a stop to the outrages, especially in the medical and insurance business or shut the hell up when it comes to complaining about your financial and political situation.

It is your fault that this crap has occurred and continues today.

Period.

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The rip-offs just never end, and they always seem to target those who have the least going on between the ears -- or who are most-desperate.

In its relentless pursuit for growth, Uber needs new drivers, and many of those drivers need cars. To help them get started, Uber has been offering short-term leases since July through a wholly owned Delaware-based subsidiary called Xchange Leasing, LLC. It partners with auto dealerships, advertises to drivers, manages risk, and even pays repo men to chase down cars whose drivers aren't making their payments.

Uh huh.

Of course "Xchange Leasing" is, well, deep subprime.  The terms are terrible and what's worse is that their payments are direct-deducted from your Uber driving remittance.  That sounds good but is in fact very bad, as it winds up essentially enslaving you, especially when you look at the payments on the so-called "lease" .vs. the actual value of the vehicle.

In a deal led by Goldman Sachs, Xchange received a $1 billion credit facility to fund new car leases, according to a person familiar with the matter.

And of course Goldman has their entire fist up the rectum of the poor starry-eyed fools who are crazy enough to sign up for this crap.

Why is this "bank" still in business?  Why isn't this sort of predatory crap labeled abusive and even felonious, with everyone involved, especially the "enabling" and "captive" firms such as Lyft and Uber find their corporate officers under indictment along with the banks involved?

Oh you know the answer, right?

It's perfectly legal for the bank to rob you.

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