Life & Debt

August 14th, 2009

This is the title of a movie which traces how the agricultural industry of Jamaica has been subsumed by NAFTA and the IMF. Local rice and potatoes have been replaced with imports from the US. Workers are paid substandard wages because the factories are on the shore in a special “trade zone” that benefits only the manufacturers and local government officials. Order it on Netflix

US Consumption the Greatest Currency in the World

December 24th, 2008

Sadly, the world depends on US consumption to raise it’s standards. Our consumption is the world\’s biggest Ponzi scheme. 

Even sadder, our government sets the example and encourages us to do so.

The challenges? 

Meaningful employment for people throughout the world.

Determining how much ‘stuff’ we really need and if we should make or buy it and from where.

Production and transportation of ‘stuff’ should have least impact on environment.

Enough leisure or slow time to actually enjoy our ‘stuff’.

Some things to ponder as we enter 2009.

Resolve to be less “Consumed” in 2009

December 11th, 2008
The holidays bring out the consumer in us even as we try to scale back. In addition to the waste we personally produce, there is a tremendous taxation of our earth in the farming, mining, manufacturing, transportation and sale of most every item we purchase and use.           

Despite my rantings about sustainability, I’ve discovered I have a long, long way to go even though I’ve made much progress. One of the best websites to find a good overall look at your personal & family sustainability footprint is Consumer Consequences . After you input your information you have the ability to compare yourself with others in different categories: house, energy, transportation, food, etc. It helped me identify which areas I should make more efforts in the coming year.

I’ve been reading online the NPR special report “Consumed” that was broadcast November 2007 and highly recommend checking it out:

Its goal is to answer the question, “Is the consumer economy sustainable?” in a serious way. They tackle the question in a comprehensive manner, with a lot of breadth but, if you don’t want to be overwhelmed, just choose one or two that most interest you.

A partial list of the featured topics: ecological footprint, landfills and the waste disposal sector, consumer debt, air pollution, freegans, marketing, junk mail, energy independence, the effect of consumer culture on mental and emotional well-being, carbon tax, food miles, fashion obsolescence, the green economy, e-waste, clean tech, globalization, Bhutan’s happiness index.

Interesting things to ponder as we consider resolutions for 2009.

Refinancing & credit card debt

July 18th, 2008
The federal administration proposed sub-prime bailout is not so much to bail out the victims as to bail out the banks and financial institutions that made the bad loans in the first place. The steps are not mandatory but voluntary to the mortgage companies. NYTimes 

Homeowners might be offered a “opportunity” to extend the length of the loan meanwhile building up less equity and paying more interest over the lifetime of the loan. Many were steered into sub-prime variable loans when they would have qualified for a fixed rate loan anyway; the federal plan would give a slap on the wrist to lenders and have them restructure the loan back to the fixed rate that they should have qualified for in the first place. The plan doesn’t help those who never should have qualified in the first place and were given loans with a wink from the mortgage broker who stood to make a tidy sum from the loan points.

Voluntary rate freezes suggested by the administration have little support from mortgage investors who are not thinking about the future consequences of being inflexible. Mortgage brokers, handlers, banks & investors are blaming everyone except themselves; each group is as greedy as the next and each built their expectations on a house of cards. (Sigh…two of my bank stocks have not done very well lately, fortunately they are well diversified banks). Only 12% of subprime borrowers & 5% of minorities would be helped by rate freezes says the Greenlining Institute .

The plan floated by the administration covers almost no loans in California because of the size of the mortgages – guess where most of the bad loans are? California Assembly

The California Assembly is proposing steps that would both prohibit certain types of mortgage rate structures and fees in the future as well as require lenders to work with the state to reach out to distressed borrowers

What does it mean to you with perfectly fine credit records? You are being solicited to extend their term length so mortgage companies can feed their habit with dependable suppliers. See Footnoted.

What can you do? Be aware of mortgage solicitations and what they will cost you over the long term. Pay your credit cards on time – consider an automatic online bill-pay if you are just plain forgetful so you don’t get hit with late fees and subsequent rate hikes based on late payments.

If you don’t pay off your credit cards each month, don’t charge ANYTHING you would expect to not have at least 3 years later: never use credit for food & toiletries, fashion clothes & accessories, tuition, day-to-day medical, etc.

Best is to save so you may purchase what you truly need with cash. An item is not truly a bargain if you add in the costs of paying 10-20% interest on it over several years.

If you must use credit, use it for truly long term and match the credit term to how long you’ll have the item or less. If you buy cars every 5 years don’t pay for them with a 30 year home equity loan; don’t even get a 7 year auto loan. If you can’t afford a 5 year auto loan, look at a less expensive car or reconsider if this is a “need” or just a “want”.

Holiday time is around the bend. How many unwanted gifts have you recieved in the past? How many gifts that you have given have you actually seen the recipient use or talk about since you gave it? Give gifts of your time or talents and don’t go into debt that you’ll still be paying off next year. Give your children the gift of teaching them fiscal responsibility.