Tag: Consumers

SONY: “A Sucker Born Every Minute”

Holding true to form the American public has once again illustrated just how easy they can be manipulated.

Yes, I am talking about a second rate comedy, “The Interview”.

After Sony’s U-turn on releasing The Interview, the controversial movie played in 331 independent cinemas across America on Christmas Day, often to sellout crowds. Many moviegoers made it clear they were there to take a political stand, with one ticket seller in California dressed as “Uncle Sam-ty Claus,” the New York Times reports. “We are taking a stand for freedom,” the manager of the Cinema Village East in Manhattan tells the AP. “We want to show the world that Americans will not be told what we can or cannot watch. Personally, I am not afraid.” Security was light at most theaters, though some had police officers standing by.

Co-directors Evan Goldberg and Seth Rogen made a surprise appearance at a screening in Los Angeles, where they thanked moviegoers for their support, reports Reuters. A North Korean diplomat, meanwhile, called the release an “unpardonable mockery” of the “dignity of our supreme leader,” but said there would probably be no “physical reaction” from Pyongyang. In a first for a major studio, the movie had a simultaneous release online. The groundbreaking release strategy is being closely watched by the industry, although Sony says it won’t release any immediate data on the number of sales or rentals, CNN reports.

A pathetic display of blind consumerism……Americans allowed the media to frame the idea that it was somehow “patriotic” to defy North Korea and buy an overpriced ticket to watch second class actors do a very bad movie.

Their moronic action shows two things….1–the American public is gullible and  2–they are more than willing to throw their money at a corporation that does not need it.  All in the name of some misplaced loyalty.

The people did not disappoint me at all…….I said it was all an act just to boost profits for a bad movie…..

Have you noticed that since SONY got the PR they needed to guarantee a big opening for this movie….it seems to be NO story.  But never fear we have a new air crash to dangle in front of the people.

I wish to thank the American people prove my point for me……..and a Happy Year to you….Sony is laughing all the way to the bank.

The Power Of Addiction

We all are addicted to something…..drugs, cigs, sex, whiskey and so on……but we Americans have an addiction to……consumerism.  A couple of years ago I wrote a piece entitle “The Real Opiate Of The Masses”…..when I pointed out that Americans were drowning in debt and even with the crash of ’08 nothing would change……we will buy way beyond our means……and guess what?

(Newser) – More than a third of Americans with credit scores have debt “in collections”—meaning one in three of us has been reported to collection agencies, a study finds. That’s a total of 77 million people whose non-mortgage debt is significantly overdue, the Urban Institute notes. The study includes debts ranging from credit card and medical bills to parking tickets, CNNMoney notes. And the widespread issue “can tip employers’ hiring decisions, or whether or not you get that apartment,” an analyst tells the AP.

The average debt is $5,178, the AP notes. The problem exists all over the country, but Southern and Western states are facing the most trouble. Among the report’s findings:

  • Nevada has the highest percentage of people with debt in collections: 47%. In Las Vegas, the figure is 49%. North Dakota has the lowest at 19%, CNNMoney reports.
  • The average amount owed is also highest in Nevada at $7,198. Washington, DC, has the lowest figure at $3,547.
  • At 51%, McAllen, Texas, has the highest percentage of affected people among the nation’s 100 largest metropolitan areas. At least 43% of people in Houston, Dallas, El Paso, and San Antonio have debt in collections. Minneapolis-St. Paul has the lowest percentage among the 100 biggest metropolitan areas, with 20%.

The complete study is here.

The scary part is that NOTHING will change……this addiction is like any other addiction….eventually it will kill the individual….in every sense of the word….KILL!

The Real “Opiate Of The Masses”

For those who think this will be a diatribe on the value of Marx’s statement on religion….you would be mistaken.  While I appreciate a lot of the work of Karl Marx I will disagree with him on this one.    While my “opiate” has become a more or less modern phenom….who knows Marx might agree with me it he were alive today…..(wishful thinking on my part, no doubt)…….

My “opiate”, as I have mentioned, is not religion but rather consumerism.

That is right…YOU!  You buy then you have become an addict to the drug that corporate media has created……In capitalism, profit becomes the goal and consumers are considered a means to that end.  Thus the final goal is the creation of more and more consumers.

The conception of “consumer” is an illusion possible only once production and consumption have been alienated as apparently separate and independent processes.  Every act of consumption is equally an act of production, so the alienation of one from the other is a social construction.  Since wage-workers produce only to earn a living, and are alienated from their own labor, the illusion is created that their only real life is as a consumer.

Theodor Adorno of the Frankfurt School focused on the creation of a global consumer culture.  The mass media has created pop culture, Hollywood, and commercial TV which fuels mass consumption..this encourages celebrity worship, lifestyle worship and yes, Greed……

What can I say….back in the 1920’s, Italian Marxist, Antonio Gramsci made a very forward looking prediction….he said the the mass media would drive hegemony…..not bad considering that in his day newspapers and a bit of radio were considered mass media……he was saying the the mass media would drive politics, culture and yes, Greed!  Take a look at politics today.  Take a look at our so-called culture today.  It is all drive by the media.

The media drives our consumerism…..we are told what cars to buy, which credit card makes us whole, what political indoctrination we need and what is life all about…..the mass media controls all!

Ben Nicholson said…….”The corruption of the American soul is consumerism.”

There you have it…..consumerism is the “real” opiate of the masses………

The Food Nazis

Not to be confused with Seinfeld’s “Soup Nazi”…….But damn close……I am talking about those elites with the large wallets that want to dictate what we consume……you know who they are…they are the ones yelling the loudest about calories and sugar and salt and fats on….on and on…..they are the ones that want the government to step in a control the consumption of certain items……

(Thinking……thinking…..)

Where I have heard this before?

After some careful thought…..I seem to recall back in the day in an American History class we were studying the beginning of the country…you know when Jefferson, Adams, Franklin and the boyz were trying desperately to find the right balance for the government of a new nation….I recall one of the lesser known Founders, George Mason IV, considered to be a radical as opposed to the moderate that most others were…..at the Federal convention of 1787,  he moved to empower the new congress to enact sumptuary laws regulating what people could eat, drink, or wear……in order to promote frugality among the lower ranks of society…….think about it!  Does that not sound a bit familiar?

We now have all these elites going on the tube telling us what we should eat and drink and in some cases what we should wear….we have governors telling us what foods are acceptable for consumption….we have mayors telling us what drinks are acceptable…all in the name of better health and most are aimed squarely at the “lower ranks of society”……

Once again the elites, those in the upper class of our society, are deciding what you should eat, drink and in some incidences wear…it was unacceptable in 1787 and it should be so in the 21st century….but you people buying the CRAP they keep selling…….at least they had enough brains to stifle that move in 1787….when less than 50% of the country could read or write…….what is your excuse?

As usual, those that are all for the government intervention are the very ones that bitch about too much government intervention……but on a side note……they will NEVER address the causes of the problem….just a solution that only effects a small group that will have to shoulder the entire situation….so damn typical of the American mentality!

Take Me To Your Leader

The one semi-bright part of the new Fin Reg is the creation of a consumer protection division…..you may not be aware of it because when the Law was signed by Obama there was a pissing contest going on about the USDA employee and what she said or did not say…so the bill was signed in a bit of obscurity.

There is already a bunch of discussion about who should lead this institution…..I have a personal opinion and it would be Elizabeth Warren who currently is head of the Congressional Oversight Committee……why would she be a good choice…..

Liberals say the choice to run the new Consumer Financial Protection Bureau is obvious: Elizabeth Warren, the Harvard University law professor who first proposed an office to protect ordinary borrowers and savers in a journal article three years ago. She’s spent years battling banks that gouge their customers.  (USA Today)

The Harvard Law School professor was one of the founding writers of CreditSlips, a blog that’s “a discussion on credit, finance and bankruptcy.” Her posts ended shortly after she headed to Washington in the fall of 2008 to head the Congressional Oversight Panel, monitoring TARP.

“Bullshit — Professionally Speaking” on Jan 7, 2009, Warren weighed in on a piece of academic contract law writing called “Bullshit Promises” that focused on misleading contract language. (The paper, of course, was a reference to Harry Frankfurt’s 2005 book, “On Bullshit.”) “I don’t get to post very often right now, but sometimes I can put on my academic robes and talk about a new piece of scholarship,” Warren wrote. “And what better thing to talk about when wearing academic robes than bullshit?”  (WSJ)  (I threw this one in just because I like her way of thinking)

This is one of the reasons I like Warren….she is a NO nonsense person that has NO problem telling like it really is….good or bad.  There are those that worry about her impending nomination because of her zeal for transparency….they seem to think that she would possibly make it harder for working people to get credit….I think it is just BS…we need a person that is NOT afraid to go out and tell the truth about the situation…we already have enough yes men in Washington…I say give the reins of the agency and let her do what she does best……find real answers to real problems…..

Overdraft Fees In Danger?

The bane to many worker stiffs is the dreaded overdraft fee when you spend a little ytoo much and do not have the funds to cover it…..you know the $30 you pay to the bank and the $25 you pay to the business….the very things that make your deposit smaller than it should be.

Well guess what?  Looks like the Congress will take up the plight of the consumer and his battle with overdrafts.  As reported in the WaPo:

A backlash is brewing on Capitol Hill against banks that charge large fees for overdrafts without asking or telling customers, the latest sign that the financial crisis is shifting the balance of power from banks toward borrowers.

Banks struggling to survive have become increasingly reliant on the fees, which could total $38.5 billion this year.

But congressional Democrats, who pushed through new restrictions on credit cards this spring, now are promising a crackdown on overdraft fees, using words like “criminal” and “rip-off” to describe the practice of letting people overspend and then charging them fees without warning. Most overdrafts are now incurred on debit card transactions.

The attack on overdraft fees comes as Congress is considering a fundamental overhaul of financial regulation. The Obama administration has proposed the creation of a new agency empowered to write and enforce rules protecting consumers in financial transactions, removing that power from banking regulators. Dodd also favors the creation of a single agency to oversee the health of banks, consolidating a responsibility held by four agencies.

Moebs Services projects that the industry will make $38.5 billion off the fees this year, up from $18 billion in 1999, in part because the average fee large banks charge for each overdraft has climbed by $10, to $35.

Industry groups argue that customers are responsible for monitoring their account balances, that overdrafts should not happen unintentionally and that overdraft loans — the money advanced automatically to cover the overdraft — are a service that banks offer.

So far not much has been out there about this issue, but I see it becoming a heated debate, especially if banks see one of the sources of revenue drying up.  Of course this will be part of the “new” financial reform bill, but it will be interesting to see how this will play in the media and therefore in the debate that will follow.

Consumer Confidence Soars!

Yesterday, 26 May, the markets got what they had been wanting…a bit of good news….and the investors had a feeding frenzy.

The national Consumer Confidence Index was up 14 points this month, to 54.9, according to the Conference Board, the New-York based group that conducts the monthly survey. Driving this was the ”Expectations Index,” which is the part of the survey that measures beliefs about the future. That part was up 22 points, to 72.3.

After hearing the news and watching the markets soar….I had to ask?  Huh?

Did I miss something?  Over 6 million unemployed…..foreclosures raising at an alarming rate…..prices screaming upward…..businesses closing….bills unpaid….personal bankruptcies going up…on and on…..but somewhere the economic gurus have found a way to make all that sound like a bright future for us all.

When I heard the news my first thought was, “who did they ask?  Some guy with a job making $75,000 a year?”  Apparently that is just who they asked.  Why do I say this?

In simple terms, increased consumer confidence indicates economic growth in which consumers are spending money, indicating higher consumption. Decreasing consumer confidence implies slowing economic growth, and so consumers are likely to decrease their spending. The idea is that the more confident people feel about the economy and their jobs and incomes, the more likely they are to make purchases. Declining consumer confidence is a sign of slowing economic growth and may indicate that the economy is headed into trouble.

Each month The Conference Board surveys 5,000 U.S. households. The survey consists of five questions that ask the respondents’ opinions about the following:

  1. Current business conditions
  2. Business conditions for the next six months
  3. Current employment conditions
  4. Employment conditions for the next six months
  5. Total family income for the next six months

Survey participants are asked to answer each question as “positive”, “negative” or “neutral”. The preliminary results from the Consumer Confidence Survey are released on the last Tuesday of each month at 10am EST.

Now that you have been informed on how the CCI is calculated, you can also see that I was right in my assumption.  They poll 5000 households that are stable and thriving and then they write a report stated that all is well in the land of consumption.  And the markets respond to the “good” news.  Investors benefit from the “fake” news.

Let us take another tack…..pick a business say….Staples…..Staples Inc.’s  fiscal first-quarter earnings fell by a third as consumers and businesses put off purchases of bigger-ticket items such as office furniture.

Aside from the downsizing and closings of businesses that have come with the recession, big office-supply chains like Staples are facing a wave of price competition from lower-cost vendors ranging from online discounters to giants such as Wal-Mart Stores Inc.

That does not sound like even businesses are that confident, now does it?  So the whole CCI is a made up piece of economic fairy tale that illustrates NOTHING, while giving the markets a reason for a rally.

As with all these types of reports, the info is skewed to benefit Wall Street not to show a realistic picture of what the economy is really doing and how it is effecting “real” people.

Credit Card Crisis: Part 2

The more the recession deepens, the more concessions the banks are getting from the government.

President Obama held a meeting with prominent credit card industry executives during which he gave them some friendly advice that they should moderate their most egregious practices so as to deflect additional damage to their public image among the mass of the population. The executives listened politely, but gave no indication that they intended to follow Obama’s advice.

The banks remain determined to continue to exploit this, one of their few remaining sources of profits. Fitch Ratings reports that US credit card delinquencies and charge-offs exceeded record levels last month as a result of the economic crisis. Nevertheless, yields to the card issuers increased, indicating that terms are being manipulated to squeeze borrowers even more tightly.

The “scissors effect” between payment defaults on the one hand and rising interest rates and fees on the other is becoming ever more pronounced. The Washington Post reports, “Already some credit card issuers are seeing close to double-digit charge-offs. For example, Capital One Financial said its charge-off rate spiked to 8.4 percent in the first quarter, up from 5.85 percent in 2008 and 3.72 percent in the first quarter of 2007. The company said it expects further increases in its US credit card charge-off rate through 2009 as the economy continues to weaken.” Charge offs are losses that the companies remove from their balance sheets because they have no hope of collecting what is due. The amounts of money involved are substantial. According to Time, analysts predict credit-card defaults could total more than $75 billion this year.

Credit cards are a form of “predatory lending” as was the whole range of risky mortgages and mortgage-related “instruments” that have already blown up into a major financial crisis. Credit card debt has been “bundled” and sold off by the banks in a manner similar to what was done with subprime mortgages. For years, both of these investment categories were virtually unregulated mechanisms for banks and similar institutions to realize large profits by selling and reselling the same assets at increasingly inflated prices and with less and less relation to real value.

The credit card industry is raising the claim that government regulations, especially via legislation rather than the more easily reversed moves by the Fed, would simply result in greater restrictions on the availability of credit to “good” borrowers, making them pay for the mistakes of “bad” borrowers. The hypocrisy of such statements is colossal given that the banks are already engaged in a major triage of credit holders after having practiced outright usury on a massive and uncontrolled scale.

Tied to this is the myth of “good” verses “bad” debtors—the former being those who pay their bills on time, maintain balances below the maximum and don’t behave in ways that the banks consider “risky.” Good debtors deserve the government’s help, but bad debtors don’t. This mythology is intended to justify the ruthless behavior of the banks by demonizing people who are being hit by the economic crisis. As a consequence, cosmetic changes can be heralded as restoring “fairness” for the good debtors, while the banks are pretty much left to do what they like. Of course, as the crisis deepens, more and more people will be driven into the bad debtor category.

But yet there is a paradox here.  We argue that the credit companies are screwing the consuming public, but are they?