A recent report announces that the default rate on commercial mortgages in the US was at a 15 year high for the first quarter of this year. Business Week reports that this may be the "Next Default Wave" something we have been warning readers about for some time; this crisis is far from over. "The shoe is about to drop with a thud" writes Business Week.
Another aspect of this as with much of the rest of the financial world is the derivatives market that is based on these loans. And the so called "Toxic Assets" that are still on the banks' books are still keeping capitalists wary of investing. They don't like to play when the risks reach a certain level. The treasury gave them a sweet deal in a public/private partnership aimed at getting rid of these assets but things are moving slowly.
The US government has set aside $11 trillion dollars over the last two years in order to save the system from collapse. This money will have to be paid for in the form of higher taxes and further cuts. Such huge injections of cash in to the economy is also a recipe for inflation which is increasing daily but likely to pose a real problem in the coming period. Commodity prices have risen steadily with Silver up 59% in the last six months, copper 90%, corn 45% and crude oil 115%. Gas prices have been rising daily here in California. And consumers are still saving in order to pay off debts, shocked as they have been by the severity of the system they thought had all the answers.
Roosevelt's new deal never saved capitalism, world war two did.
Obama's stimulus plan is paving the way for further crisis and increased social resistance to it. If you like what you read in Facts For Working People and this blog and you want to join us in fighting back, or help us in any way, contact us at: ffworkingpeople@gmail.com
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1 comment:
Working people's concerns are not "who should take the credit for improved unemployment numbers this week". Their concerns are about paying for heat, food, medicine, and a home. About dignity and the lack thereof. Each struggling individual has a unique perspective, too trivial oftentimes for policy-makers to listen to. For those who need to share their stories and seek advice or solace from others in similar a situation, here's a place: www.peopleinrecession.com.
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