Tuesday, July 8, 2014
How to Tell If Your Formerly Rich Neighbors Have Suddenly Become Destitute
How to Tell If Your Formerly Rich Neighbors Have Suddenly Become Destitute Your Flashy Have Everything Neighbors May Have Suddenly Become Destitute in the Economic Crisis but They Will Never Let on to You About It Lex Loeb Contributor Network . These are not the best of times for some of the rich and the super rich. You may not have much sympathy but these are people who are used to live styles they may no longer be able to afford. If their financial assets can no longer afford to pay for their high life styles they are in for unpleasant circumstances. Thinking that just because some one is better off than you are does not necessarily mean that they were happy living at that particular social level, many want to climb to higher levels of wealth and a high life style just like you do. Millionaires will put fortunes at risk to become multi millionaires and multi millionaires will put fortunes at risk in vain attempts to become billionaires. A million dollars ain't what it used to be. If prevailing interest rates are 4 percent they net only $40,000 income per year before taxes and inflation, it is only a whopping $3333 per month and that hardly enough to make them feel rich . Inflation has destroyed the purchasing power of a million. A lot of the semi rich will risk putting money in the stock markets to get 7% or more which only results in $70,000 gross income before taxes. Older wealthy people quickly consume their savings and inflation destroys most of their original purchasing power so a lot of people who seemed rich before the crisis may have just been quietly hanging on to begin with. There are also the newbie nouveau younger rich neighbors who might even be in much more trouble . Unlike the older rich neighbors these people may have borrowed lots of money to buy their show home condo penthouse. They are just as quiet about not being in great financial shape. Lots of condo flippers who made easy money before are suddenly finding themselves on the ledge of the high rise building with debt still over their necks even after taking the elevator to their penthouse suits. Some can delay the inevitable and won't even put their property on the market but would rather quietly walk away after foreclosure from lack of payment to the banks and unpaid property taxes exhaust their statutory limits. For some there is a sense of fading hopes. The more in debt you are the more quickly the hopes of financial survival becomes when the economy does not immediately bounce back or even just pretend to in some sort of dead cat market bounce. Almost no one should have any sympathy for these people, except for politicians hoping to buy votes courting falling flipping yuppies and lawyers who will pretend to be sympathetic for anyone who still has a little cash left over to spend on bankruptcy services. Politicians tend to be younger ambitious risk takers who borrow too much money. We know that because of the way we see them deplete our treasuries at any level of government. Politicians are born with good rhetorical excuses to borrow as much money as possible so they sympathize with overly ambitious yuppie flippers. The rest of us say good riddance. They are down, down , down, buy them a bottle of Andre' Champaign for their condo departing gift because they will have to get used to drinking crap like that if they want to keep up with some semblance of their old cliché' power drinking habits. It is even better if you can buy their $1,800,000 penthouse condo for $195,000 at a tax auction from the bank and get a 3% 30 year mortgage from the bank to get the stupid condo out of their growing inventory of foreclosures. This is the beauty of capitalism. Just remember when the former owner was flipping a freshly purchased $159,000 condo for $400,000 and inviting you to be their sucker buyer! Of course to get the loans in the first place most of the condo flipping yuppies have great jobs to go back to and starting over again is no big deal, Most will get big time bankruptcy relief from the coming Obama administration so they can continue dining out at four star restaurants 4 nights a week on credit cards but they will be renting apartments out in distant suburbs and riding the bus instead of the repo Beamer. If you know some of these people buy a case of Andre champaign and bring it to work for Christmas presents. Get the pink stuff. They are the ones who used to invite you to go shopping with them at Saks and lent you their Neiman Marcus Catalog. I always wondered if this is what is meant by Vanity Faire? When the bottom falls out below the Super Rich They have a lot further to fall. Fortunately , this is Portland and all of our super rich are financially well and accounted for still. Every one of these guys that fails takes down a collateral 20,000 jobs or more with them so its not really something to celebrate. The big fun of spending too much money is ending up with a lot less and that can happen to anyone anywhere on the social ladder. Here is how the sympathy ladder works out: Trailer Park Trash who loose everything is generally considered to be a good thing. Rich in debt yuppies are a very good thing. Rich free and clear retirees are worth a little sympathy when you see them eating and working at McDonald's, Super Rich going broke thats a very bad thing because you can loose your job because of it so you call your local politician and tell them that you immediately want welfare for the super rich and they bend over backward to comply with citizen demands. When find the super rich camping out in tents in Palm Beach you bring them real champaign and a few hundred dollars because they still can come back fast with all their friends in politics who owe them big. You can also fly to Dubai and Roll a couple of barrels of oil off the plane as gifts for some of the nouveau bankrupt there. Makes a great gift in Texas too. It will be a pleasure watching T. Boone Pickens and Donald Trump go bankrupt again if possible. Cross your fingers and hope. Don't worry about them they will go from billions to nothing again and back to billions a third time again. It pays to be royalty because even if you go deeply in debt you still are royal for ever more. It is the sad story of Europe and much of the rest of the old world where the royals happily break the bank only to raise taxes. The great American experiment has not exactly solved that situational problem with 700 billion dollar bail outs for bad banks. Even sadder is how banks will become much more profitable with many fewer employees thanks to the advent of INTERNET banking so they will become amazing profit centers with little competition and what amounts essentially to government sponsorship. When bank of America or city corp collectively fire nearly one hundred thousand workers to make ends meet now think about the future when all banking is more automated and they never need to hire those people back! These banks selling for pennies on the dollar will be super top line profit centers in the economy without the lost employee expenses, Nothing leaves as much of a bad taste in the American pallet as greater fool theory enthusiasts making you their fool. Those nice flippers put much of the housing market out of reach for the rest of us and helped to raise rents too. It is Andre' sweet to watch them become their own greater fools. By the way can you spare 700 billion dollars? I will send you my paypal address. .