Credit-card defaults on rise in US

US consumers are defaulting on credit-card payments at a significantly higher rate than last year, raising the prospect of problems in the stricken US subprime mortgage market spreading to other types of consumer debt.

Credit-card companies were forced to write off 4.58 per cent of payments as uncollectable in the first half of 2007, almost 30 per cent higher year-on-year. Late payments also rose, and the quarterly payment rate – a measure of cardholders’ willingness and ability to repay their debt – fell for the first time in more than four years.

Goddamn, DK! It used to be that when you wrote something, it was uplifting....

Now, when IB pops up, and we see your cherubic smiling face, it is usually followed by the word crisis! Then, a litany of reasons as to why the world, and the US in particular, is going to hell in a hand basket!!

Are you OK? Heatstroke or anything?

Just checking...

norm

Aloha DK

The world is balancing out:)United States is the bridge to the world within. We get up, lie down or stand with or without money or with or without compliments:) as we are complements of a world that is invisible. You are always uplifting, love patty

Dear DK,

It is no coincidence that you mention the black swan because I had been thinking about one, a potential black swan that may soon land on the pond.

This will be our experiment to see if we can avoid this Black Swan by creating awareness of it's impending approach.

I think most black swans result as a failure to understand and comprehend the linkage between all the subsystems.

All black swans have parents that give birth to them.

This black swan involves two things that tie in with the credit crunch and aggravate it. There are really two Black Swans being conceived here: Economic Tribulation and Famine.

One we control the other we do not.

1) Extreme Weather
2) The use of Ethanol for Fuel

With a little time we can show that #2 is based on flagrant ignorance and extreme greed we will demonstrate who profits from this ignorance and how they are driving a bad policy and approach.

#2 will result in famine and economic strife and create an unnecessary burden and cost on economic participants and does not fit with a holistic system.

Fact: It takes more energy to produce a gallon of ethanol than the energy produced when it is utilized.

This violates the first principle of system design:

“Determine the most energy and resource efficient methods that operate in harmony with all the other subsystems and support a continuous regenerating cycle or loop.”

Note that if solar energy were used in the production of ethanol it would alter the equation, however natural gas provides 60% of the energy for it’s production, which means #2 will increase demand and competition for natural gas. Consumers will pay more for natural grass aggravating the credit crunch.

Consumers will pay to the producers a subsidy of 50 cents per gallon of Ethanol which will come from their pay checks via taxes. So before you have even gotten to the pump you have paid 50 cents for each gallon that you pump.

The disregarded fact about ethanol is that it holds at least 30% less energy per gallon than normal gasoline, translating into a loss in fuel economy per gallon of at least 25% over gasoline for an Ethanol E-85per cent blend. No advocate of the ethanol boondoggle addresses the huge social cost which is beginning to hit the dining room tables across the US, Europe and the rest of the world. Food prices are exploding as corn, soybeans and all cereal grain prices are going through the roof because of the astronomical -- Congress-driven -- demand for corn to burn for bio-fuel.
This year the Massachusetts Institute of Technology issued a report concluding that using corn-based ethanol instead of gasoline will have no impact on greenhouse gas emissions, and would even expand fossil fuel use due to increased demand for fertilizer and irrigation to expand acreage of ethanol crops. And according to MIT "natural gas consumption is 66% of total corn ethanol production energy," meaning huge new strains on natural gas supply, pushing prices there higher.

THIS IS PURE GENIUS on the part of the Oil Companies (an you wondered why they were behind it?) , you are going to pay $3.00 for a gallon of fuel that gets you less miles per gallon meaning you need to buy more gallons.
INSIGHT: The automotive companies are required to get X miles per gallon. The use of ethanol will make it harder to meet these regulatory requirements.

CONCEPTION of THE BLACK SWAN(s)

FAMINE & FINANCIAL TRIBULATION

A result of the bio-fuel revolution in agriculture is that world carryover or reserve stocks of grains have been plunging for six of the past seven years. Carryover reserve stocks of all grains fell at the end of 2006 to 57 days of consumption, the lowest level since 1972. Little wonder that world grain prices rose 100% over the past 12 months. This is just the start.

Only 57 days of stored consumption combined with Extreme weather events (drought, flood, harvest failure) destroying crops and the competition between using crops as fuel or food and you have a Black Swan.

This combined with an increased cost of living for the indentured servitude and the credit crunch and you are talking a big mess from which there may be no escape.

Prices of corn, soybeans and all cereal grains are going through the roof; because of the astronomical — corporate driven— demand for corn to burn for bio-fuel.

All major grains including maize, wheat, rice have seen the largest price increase in three decades. Those three crops constitute almost 90% of all grains cultivated in the world, and are a staple food for the world’s poor. (Remember one’s advice about Amaranth here)

The Labor Department’s most recent inflation data showed that U.S. food prices rose by 4.1 percent for the 12 months ending in June, but a deeper look at the numbers reveals that the price of milk, eggs and other essentials in the American diet are actually rising by double digits.
Already stung by a two-year rise in gasoline prices, American consumers now face sharply higher prices for foods they can’t do without. This little-known fact may go a long way to explaining why, despite healthy job statistics, Americans remain glum about the economy.
It's increasingly clear that the same people who brought us oil price inflation are now deliberately creating parallel food price inflation.

We have had a rise in average oil prices of some 300% since the end of 2000 when George W. Bush and Dick Halliburton Cheney made oil the central preoccupation of US foreign policy.

Bio-fuel demand, fed by US government subsidies is literally linking food prices to oil prices.

In summary consumers will have unanticipated (when they took out the loans) increased costs for:

Natural Gas
Fuel for transportation
Food

One of the results of this situation will be increased fear and conflict further weakening and dividing the public and increasing the sales of security and defense products and services.

In conjunction with the increased fear citizens will be forced to relinquish even more of their freedom and submit to other controlling forces.

As a result of the malnutrition and poverty disease levels will rise and the profitability of the medical industrial complex will be increased. Part of this revenue will be shared with the corporate media it will help to maintain ignorance and adoption of the fictions that help create and support this entire scenario.

The increased costs will require more borrowing and interest earned by the lenders.

There are a few that benefit from this scheme, thus they promote it, however it is a detriment to the many, and they must be kept ignorant of this fact if the few are to succeed in their plot motivated not by wisdom and the desire to generating benefit, but by greed and ignorance.

This is not really an organized conspiracy although there is some collaboration.

It is the natural result of each entity making decisions based on individual interests rather than a holistic, whole system point of view.

Aggravated by a failed energy exchange accounting system.

This above scenario will not play out.

As a result of the popular support for

(R)evolution

Our Evolution

Here we go weather affecting food supply and increasing costs for end users. Which means less money to pay down debt.

The price of wheat on commodity markets worldwide has soared, after a number of announcements indicating a shortage of supply from the world’s major producers.

The news comes off the back of a series of reports from around the world that poor weather in wheat growing nations is leading to a smaller harvest than in previous years.

Wheat, a vital commodity in enabling the manufacture of basic food production, has become a premium commodity around the globe, with manufacturers enjoying all time record prices for their crop as demand continues to rapidly outstrip supply for the grain.

However, the news could lead to prompt food inflation for consumers, as well as hindering international humanitarian aid efforts in countries affected by famine.

Growers in Canada have complained of bad weather weakening their crop by as much as 20% according to some reports, whilst growers in China have forecast a 10% decline in their output this year.

The world’s third largest producer, Australia has suggested that warmer weather over the first half of the year could seriously impact upon volume of output, whilst growers in Europe have experienced heavier rains than in previous years.

As a result, worldwide stocks have fallen to a 26-year low, sending the price of wheat and wheat produce soaring worldwide to around $7.44 a bushel.

With this fall in supply comes a dramatic increase in demand globally, largely attributed to emerging economies in the East like India and China. With the growing inequity in supply, prices are likely to continue to rise over the coming weeks and months.

Analysts are predicting the price increase is likely to have a knock-on effect in domestic supermarkets before too long, expecting the price of breads and pasta to increase in line with the supply shortage.

notes:
1. Confirmation made concerning FNA & FRE insurance of income stream basis of these kind of derivatives, which the commercial paper does not currently provide.
2. FRE makes no ARM or sub-prime loans - foreclosure rate has increased 75% from level of 6 months ago. Compare to increase reported by Countrywide of 93% from level of one year ago. So its not mostly about sub-prime or even necessarily Fed rates.
3. Recent changes mandated by US Congress have increased minimum monthly payback amounts on outstanding credit card balances. Beyond this potential culprit to the increase in foreclosures, there are also the cumulative effects of long-standing trends such as job losses and spending habits, which I suspect are the more significant.
4. Dry weather conditions have affected crop production in Arkansas, Alabama & Mississippi. Irrigation reservoirs observed appeared to be 2-3 ft below normal, but not bone dry either. Many fields appeared to hold crops of insufficient yield to warrant the expense of harvest. Preparation of lands for fall planting appeared abnormally low. Large-scale farming is a credit-intensive enterprise.
5. Richard, biodiesel fuel in my view is not an "easy way out" to continue energy consumption at present levels. However, it continues to interest me as one of several alternatives with potential. Some notes of possible interest:
A) A gallon of biodiesel is only approx 10% alcohol (+ 10% glycerin + 80% vegetable oil).
B) Decentralized production capability can meet many needs currently provided for by fossil fuels.
C) A market space for smaller-scale farm produce means many smaller land parcels, not economical to farm under present circumstances, can return to viability and ultimately result in substantial increases in agricultural production (weather permitting).
D) Net overall effect on the environment versus present practices can be quite positive.
E) Production and use of biofuels is not as credit-sensitive as other emerging technologies and does not require Big Capital participation to proceed (or for that matter any treaty with Brazil).
F) Biofuels enthuse and invigorate a lot of people who see the immediate economic and environmental gains possible. These same persons are not necessarily as excited about other proposals. Their support for and participation in a New Economy is an important goal in and of itself.
G) Biofuels are an existing and growing part of this New Economy. It doesn't need anybody's "help" to be what it is. Unless there is a really, really, good objection to it that would support the notion it should be made illegal, it hardly seems worth the effort to debate whether it should or should not exist - this is a train, in other words, that has basically already left the station.

P.S. - I'm not part of any conspiracy of any sort. I very much like Richard's idea of a solar-powered still. The man has some ideas that are just pure genius, and we get a front-row seat to watch it in motion here on Intentblog. You go, Richard; I'm a fan.

Squid, thanks, nice notes. I am not saying that biofuels and ethanol are not part of the solution just that they need to be integrated with wisdom and understand how all other systems are affected and the "effects" of using them.

Obviously if ethanol requires more energy to produce than it provides and our tax dollars are being used as a subsidy there is a big issue.

You are right though they may be very feasible for small scale distributed production especially if we had our oil supply interrupted.

This is an example of science and corporate greed killing people. Not a holistic approach.

Every unnatural chemical introduced into the body should have it's affect on every chemical pathway studied. Just because people don't drop dead after eating it does not mean it is not harmful.

ConAgra, the world's largest supplier of the 3 billion bags of microwave popcorn sold each year, said Tuesday that it will eliminate the use of a controversial chemical butter flavoring linked to severe lung disease in workers from its Act II and Orville Redenbacher products.

The announcement comes a week after Pop Weaver, the nation's second-largest popcorn producer, said it already had pulled the synthetic flavoring -- diacetyl -- from its microwave product delivered to stores last month.

Meanwhile, a lung specialist from Denver's National Jewish Medical and Research Center has notified federal agencies that she may have identified the first known case of a man who ate popcorn at home and had the same disease as the workers.

Lung specialist Dr. Cecile Rose wrote to the Food and Drug Administration, the Environmental Protection Agency, the Centers for Disease Control and Prevention and the Occupational Health and Safety Administration in July, advising them of her patient and the possibility that people who pop microwave corn at home can be at risk.