Are You Still Making That Mortgage Payment? Why?

It has been seven years since the subprime mortgage debacle.  In the ensuing years, thousands of homeowners have not made a "P&I Payment" and are still living in their homes.  Now, according to the New York Times, those homeowners may get to keep their homes without having to pay another penny.  What?  The reason being is that lenders, especially in Florida and New Jersey, have waited too long to foreclose, or due to the fact that statutes of limitations have been exceeded, usually five years, in the case of real estate.  See, squatters do have rights!

Isn't America great where one can now get a free "home!"  Welcome to the new normal.

The Way Politicians Think

Interesting Facts That You May Not Knw

The following facts are from "The Economic Collapse:"

1. Did you know that if you have no debt and have $10 in your wallet that you are wealthier than 25% of all Americans?
2. Did you know that Apple has more money than the U.S. Treasury?
3. Did you know that the amount of cement used by China from 2011 to 2013 was greater than the total amount of cement that the U.S. used during the entire 20th century?
4. Did you know that in more than half of all U.S. states that the highest paid public employee in the state is a football coach?
5. Did you know that it costs the U.S. government 1.8 cents to mint a penny and 9.4 cents to mint a nickel?
6. Did you know that 47% Americans do not put a single penny out of their paychecks into savings?
7. Did you know that in 1950, less than 5% of all babies in America were born to unmarried parents?  Today, that percentage is over 40%.
8. Did you know that the average supermarket in the U.S. wastes about 3,000 pounds of food each year?
9. Did you know that Montana has three times as many cows as people?
10. Did you know that the grizzly bear is the official state animal of California? However, no grizzly bears have been seen in California since 1922.
11. Did you know that there are more than 4 million adult websites on the internet that get more traffic than Netflix, Amazon, and Twitter combined?
12. Did you know that there are 60,000 miles of blood vessels in your body, and if they were stretched out in a single line, they could go around the world more than twice?

$SLV: Bearish Trend Continues

S&P 500: Exponential Moving Average (EMA) Strategy

US "Loses" $500 Million in Weapons Given to Yemen, Now in Al-Qaeda Hands

Who could have seen this coming?  What are earth is going on?  Is our Department of Defense that incompetent? 

Source: Washington Post

Compression of Corporate Profit Margins

What could possibility go wrong in an economic/financial environment where "corporate profit margins" are lowest since 2009?  Everything is great, right?  No need to worry, right?  Simply, "Be Happy!"

Move Over Barbecue Grills, EPA Now Wants to Monitor Your Time in the Shower!

EPA wants hotels to monitor how much time its guests spend in the shower.  Yes, that is correct. We now have the "shower police."  Yesterday, it was the EPA with barbecue regulations.  Today, it is the shower.  The EPA is creating a wireless system that will track how much water a hotel quest uses to get them to modify their behavior.  Next, on its agenda, will undoubtedly be monitoring the time you spend in your shower at home. 

EPA May Soon License Barbecues and Impose Fines for Cooking on Them

So, you thought your summer-time barbecue was an innocent way to enjoy and spend quality time with family and friends.  But, wait, you may soon be arrested and fined for those fabulous barbecued ribs that you grill. What, say that again?  Yes, the EPA just announced that it is funding a project at the University of California to limit the emissions resulting in grease drippings, of all things, with a special tray to catch them and a catalytic filtration system.

So, when you fire-up that barbecue grill this summer, please remember, especially if you do not have a grease diverter system or a PM2.5 filter installed on your grill, that you may soon be in violation of EPA regulations on barbecuing.  

Only in Abu Dhabi, Of Course, Rolls Royce Police Cars

Bankruptcy: Chapters 7 and 13

First, I am not in favor of filing for bankruptcy.  Second, if you have not heeded by financial advise over the past several years about debt elimination, you may need the following information from NOLO about Bankruptcy, Chapters 7 and 13, over the next couple of years. That is, if you don't get your financial house in order!

"Under pre-2005 bankruptcy rules, most filers could choose the type of bankruptcy best for them -- and most chose Chapter 7 bankruptcy (liquidation) over Chapter 13 bankruptcy (repayment). The law passed in 2005 prohibits some filers with higher incomes from using Chapter 7 bankruptcy.  

Under the rules enacted in 2005, the first step in figuring out whether you can file for Chapter 7 bankruptcy is to measure your "current monthly income" against the median income for a household of your size in your state. If your income is less than or equal to the median, you can file for Chapter 7 bankruptcy. (For example in the state of Missouri for a family of size four, the median family income is $71,550.)  If it is more than the median, however, you must pass "the means test" -- another requirement of the new law -- in order to file for Chapter 7. [Find your state's median income here.]  

The purpose of the means test is to figure out whether you have enough disposable income to make payments on a Chapter 13 plan. To find out whether you pass the means test (Form 22A), you subtract certain allowed expenses and debt payments from your current monthly income. If the income that's left over after these calculations is below a certain amount, you can file for Chapter 7.

To get your current monthly income (CMI), add up the total income you received from all sources during the six-month look back period, and then divide by six to come up with your average monthly income.  Then, determine your eligible expenses, such as the following categories:

1. Taxes: Since you normally have to pay taxes on your income, you can deduct your tax obligations from your income on the means test as well.
2. Involuntary deductions: These include deductions required for employment such as mandatory retirement plans, union dues, or uniforms.
3.  Health, disability, or term life insurance: You are allowed to deduct the actual amounts you spend on health, disability, or term life insurance expenses.
4. Secured debt payments: These include payments on secured debts such as your mortgage or car loan. Even if your mortgage or car payment is above the national or local living standards, you can normally deduct it in full on the means test. However, the means test looks at the total amount you will have to pay in the 60 months following the bankruptcy and averages your monthly obligation based on that amount. So if your car or mortgage will be paid off in less than 60 months, you can only deduct the 60-month average and not your entire current monthly payment.
5. Court ordered payments: If you are required to pay domestic support obligations such as alimony or child support, you can deduct these expenses on the means test.
6. Child care: Expenses for child care such as babysitting, day care, or preschool may be deducted on the means test.
7. Health care: If you incur more out-of-pocket health care costs (other than insurance) for the health and welfare of you or your dependents than the allowed national standard, you may be able to deduct the actual amount you pay.
8. Education for employment or disabled child: You can deduct your education expenses if those expenses are required for your employment or for your mentally or physically disabled child.
9. Charitable contributions: If you regularly made charitable contributions prior to bankruptcy and expect to continue making those contributions, you can deduct them on the means test.
10. Care of elderly, chronically ill, or disabled: You can deduct the amount you contribute towards the care of an elderly, chronically ill, or disabled family member or person in your household.
11. Expenses for special circumstances: If you incur additional expenses for you or your family’s health and welfare because of special circumstances, you may be able to deduct them if you explain your situation to the satisfaction of the court."

Use the online Chapter 7 Means calculator here.

A question that usually comes up is how often may one declare bankruptcy once one has files for either Chapter 7 or Chapter 13?  If one received one's first discharge under a Chapter 7, one cannot receive a second discharge in any Chapter 7 case that is filed within eight years from the date that the first case was filed.  On the other hand, if one received one's first discharge under Chapter 13, one cannot receive a second discharge in any Chapter 13 case that is filed within two years from the date that the first case was filed.

The American Dream: All Time Low!

The American Dream for the middle-class has always been about home ownership. However, that dream is definitely lost on today's millennials.  (See Chart 1.)  Why?  Millennials with over $1 trillion in student debt can not afford the American Dream.  It simply becomes a financial decision.  That is, make those monthly student loan payments or make those P&I monthly payments.  In other words, these two events are increasingly becoming mutually exclusive.

Good Times are Here Again

The job report came out yesterday. And, the WOW factor was in place. (However, don't believe the headlines.) The unemployment rate went from 5.7% to 5.5%. The reason for decline in the unemployment rate is in the denominator. That is, the number of unemployed Americans "dropped" by 274,000 while those employed Americans rose by 96,000. (1 new person employed for every 2.9 individuals who dropped out.) And, the labor participation rate dropped to a 37-year low! But, the BLS states that everything is fine.

Renminbi: New World Currency

Move over DOLLAR. The new world currency will be the "Renminbi (ren-min-bee)." Multinational companies such as McDonald’s are now issuing bonds in renminbi, and even sovereign governments are issuing debt denominated in renminbi, including the UK.  We, as a nation, are so egotistical that we believe that the dollar will not only be the world's reserve currency but the world currency.