Kenmore Undressed

Mr. Freeze, The Financial Curmedgeon - Pointing His Big Fat Finger at the Wolves

Mr. Freeze and his minions have never believed that letting wolves tend the hen house was a good idea. Unfortunately, our financial system has been controlled by individuals who are only concerned with profit. There are a lot of  capitalists who have been preaching the virtues of the “unfettered” free market for decades. Here is the constant refrain: “If we would just get out of the way and let the free market operate without the intervention of regulation, then business will prosper and everyone benefits.” This is an expression of the Ronald Reagan “trickle down” baloney that so many Americans believe in. Mr. Freeze knows that in America if something is said over and over again, often enough, then it becomes true. Well, today Mr. Freeze takes great pleasure in pointing his big fat figure at all of the libertarian/conservative think tanks, investment “experts,” day traders, financial publications and CEO’s who have manufactured this get rich easy propaganda. It is a sort of money-idolatry of biblical proportions. The tragic thing is that this MYTH is now causing domestic and international markets to self-destruct. As a public service, Mr. Freeze has provided you, dear reader, with two important media clips: a video from 60 Minutes broadcast last night, and one audio article from National Public Radio. I hope you have a few moments to reflect on what these pieces reveal. Click on the picture below to watch the 60 Minutes piece:

Please click on the NPR piece below to hear one of the most articulate observers of the current market break-down, John C. Bogle, Founder of the Vanguard Mutual Funds.

The pieces above confirm one of Mr. Freeze’s economic formulas: capitalism + greed - governmental regulation = disaster. There must be a well-considered balance between government and business. One cannot exist successfully without the other. Mr. Freeze is tired of hearing about the virtues of the free market system. Mr. Freeze lives in the REAL WORLD where people go bankrupt, where families fall apart, where jobs and careers are outsourced,  and where ruinous things happen to people because a wealthy, elite financial class has been allowed to “make a profit” no matter the cost.  Mr. Freeze hopes you’re all doing OK. Really.

Foreclosure: A Sad Reality

I’ve avoided using the “F” word because it’s one of the most devastating situations for anyone to go through. It symbolizes the anxiety and fear that many home owners face even in good markets. Even one of my neighbors here in Kenmore went into foreclosure recently. Fortunately (so far), the Seattle Area has not seen the huge numbers of foreclosures that CA, NV and numerous other states have experienced. Nationwide, foreclosures are up 115% as compared to Washington State at 20%. See more about this in the September 19th Seattle PI article entitled:  “Foreclosure rate here below U.S. Average”.Also, I’ve attached a powerful 12 minute film clip from http://mortgagenewsdaily.com   that shows the sad reality of foreclosure in an area of the country that has been hard-hit. It’s worth watching. Just click on the pictures below:

Hi, Meet Crybaby (American) Capitalism

Have you ever lost your job and had a hard time paying your credit card bills, or got behind on your mortgage, or had medical bills or your spouse left you with a mountain of debt? Have you ever listened to people talk about “those folks” who should take personal responsibility for paying their debts! If so, then you need to meet Crybaby Capitalism. He has a solution to your financial problems. See if this works for you next time you need help:

Hi, I’m Crybaby Capitalism. You’ve been hearing a lot about me over the last several months. Things have been going really well for me the last 30 years. I’ve been able to make a LOT of money by wrapping up debt in security instruments (that no one, not even the smartest analysts can figure out) and selling them to greedy investors. After all, everyone knows that GREED IS GOOD. Wasn’t that the famous line in the film “Wall Street?” It didn’t matter that the paper we were pushing wasn’t worth as much as we said it was. It didn’t matter that what we were doing was borderline fraud. After all, no one was really looking that carefully, especially Uncle Sam, who has been demasculated by years of deregulatory legislation by both political parties.

Now that a lot of my friends: Banks, Security Companies and large corporations have gone bankrupt, they aren’t happy!!! They don’t think it’s FAIR that they lost money. After all, they were all practicing FREE MARKET ECONOMICS. Milton Friedman said that no regulation is a good thing. Keep the bureaucrats out of business. It’s all about supply and demand. It’s all about efficiency. It’s all about a rising tide lifting all boats. It’s all about creating wealth that will TRICKLE DOWN from the wealthy to the rest of you poor dumb losers.

But look, how can you ignore my friends:

This is AIG.

This is Lehman Brothers.

This is my other friend WALL STREET.

BUT WAIT, we found a solution to losing so much money. We just cried loudly enough that THE GOVERNMENT is bailing us out. It was so nice for President Bush to announce today that the taxpayers will be contributing billions and billions of dollars to help us out. We promise to pay you back!!! Really! 

Mr. Freeze, The Financial Curmedgeon - Why Did I Come Back to the United States?

I, Mr. Freeze was on vacation in August.  Mr. Freeze was visiting a very famous Eurpoean country (whose name shall remain anonymous to protect the innocent) where the people spend a lot of time eating really good food and drinking coffee; where the cities have places for people to hang out without being run down by cars; where they have Art. He didn’t even need a car to get around because, good golly, they actually have trains, light rail, trams, subways and buses (transportation that the public uses!).   

Mr. Freeze needed a break from real estate. My wife (Mrs. Freeze is one tough gal) put me on a “MEDIA FAST.” She knows Mr. Freeze is a media junky. Mr. Freeze is usually very grumpy about things because he spends a lot of time thinking about all the problems in the U.S. “You will not listen to the news……..especially news in English!” THE RESULT: Mr. Freeze was in a happy place for five weeks.

But then…………………………………………………………….MR. FREEZE CAME BACK HOME and Mr. Freeze was shocked: Hurricane Ike was having his way with Texas; our financial institutions continue to go bankrupt; Fannie Mae and Freddie Mac have a hang-over; the local and national real estate markets have fallen flat on their (collective) face; the national election continues to drag on and on; and the most difficult thing for Mr. Freeze to deal with is the fact that one cannot escape from the media in this country. It’s part of the fabric of American Life and it sucks. Blah, blah, blah……..The final straw was news of Lehman Brothers declaring bankruptcy. Is it any wonder that Americans don’t trust their institutions?

Mr. Freeze is taking a deep breath right now and is heading home to cook a nice dinner for Mrs. Freeze. He learned a thing or two about cooking pasta in that Eurpoean country! Yummy!

Mr. Freeze, The Financial Curmudgeon - America’s Social Disease

The Financial Curmudgeon was listening to the “financial experts” talking last week about all of the bank failures, the volatile Stock Market and a myriad of other problems facing the average American family. Indeed, we are living in challenging times. It reminds me of Venice in the 16th & 17th Centuries. At that time Venice experienced an utter collapse of its world trade domination as the  New World began to transform world markets. The Venetians became complacent and so have we.  

Dan Catts, a contributor to flickr.com, provided this picture of an original mortgage. He writes: “When we moved into the house we found a box with a whole bunch of documents in. Someone else has numbered them all and unfortunately number 2 is the earliest one we have.”

In today’s world of electronic documents, faxes, pdf files, email, etc., we don’t often reflect on the fact that there are actual documents backing up financial transactions. These documents represent promises and obligations to pay someone back. It’s almost as if we’ve forgotten that these papers have tangible meaning and NOT paying them back results in consequences. Yes, Virginia, there really is a debt out there! I don’t know about you, but the current mortgage/credit crisis is but a reflection of how reckless borrowers (AND LENDERS) have become regarding lending and taking on debt. To me, it’s a a sort of social disease here in America: purchasing too many things without having the money in the bank to pay for them; believing that somehow one doesn’t need an adequate income to qualify for a loan; never saving for a rainy day; carrying 5 or more credit cards with huge balances and wondering why they can’t ”get ahead.” The largest and most destructive symptom of this disease is our belief that the world is going to stop so we can get off. In the long term, Venice never recovered from the huge economic shifts that occurred and I have a sense that Americans are going to experience a decline in their standard of living, perhaps not as dramatic as Venice, but changes nevertheless.

So here’s what Mr. Freeze, the Financial Curmudgeon, suggests: Take a deep breath, pull out all your debt “documents” (credit card contracts, mortgage, bills, everything) and start pondering just how many people you owe. Then make a plan to eliminate as many of these debts as possible. Mr. Freeze has a simple way to start: buy yourself a little notebook and start writing down every single penny you spend every day for 1 month. By doing this you’ll discover exactly what all your unnecessary purchases are (YES, YOU HAVE THEM). Isolate those monies and start paying off your bills. Mr. Freeze, the Financial Curmudgeon promises to have more tips in the near future. 

My Alter-ego: The Financial Curmudgeon, Mr. Freeze

Meet Mr. Freeze, the Financial Curmudgeon!

In a former life, I was Mr. Freeze. I’m not kidding. I was a licensed bill collector in 50 states and my pseudonym was Mr. Richard Freeze. I was in the Credit Industry for many years and I worked both sides of the business. I collected and I also educated the public on sane money management. Before Mr. Freeze went “underground” he also worked for Consumer Credit Counseling Service which was one of the best jobs ever. I became the Financial Curmudgeon because, for so many years, I observed how most Americans get themselves into financial trouble: simply put, they don’t know the meaning of the word “enough.”  Yes, there are those circumstances that people can’t do anything about: job loss, sickness, divorce, etc.. But Mr. Freeze has always believed most people get into financial trouble because they have no self discipline, they want everything now, they believe someone or something is going to bail them out of their circumstances! Well my friends, the Financial Curmudgeon is here to tell you that times have gotten tougher and you’re going to have to change your behavior if you want to survive our current economic challenges. The Financial Curmudgeon believes in strong medicine, so he recommends every man woman and child read “Your Money or Your Life” by Vicki Robin and Joe Dominguez. In my opinion, it is the best book about personal money management today.

The Financial Curmudgeon will be back. I promise!