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alstry (35.67)

A Quick Lesson in Zombulation!!!!

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July 14, 2009 – Comments (14)

You are Zombulated when you run out of savings and access to credit, or government taxes 100% of your income and assets, you have been Zombulated......in either case, you are broke.

Zombulation really kicks in when your the cost to service your debt exceeds income.

Let's see how Zombulation can occur to the unsuspecting Family.

Let's take a Family whose annual income is $100K per year and owns a home with a $250K mortgage worth $500K.

For the sake of illustrative purposes let's assume a fixed rate mortgage at 6%, or $15K in interest,  property taxes of $6K per year and home owners insurance and utilities plus necessary maintenance of $8K. 

We will also assume two cars with $30K of debt at 6% and credit card interst of $1200 per year.

Further, we will apply a $10K per year health insurance and life insurance cost.

In addition, we will apply a $28K per year cost in state and federal income tax, social security tax, gas tax, license tax and and miscellaneous tax.

For this reasonably leveraged family, approximately 70% of its income goes directly to Taxes, Interest, Insurance and Utilities.

If this was a two income family each earning about the same income, and one member lost their job, this families non discretionary expenses would likely exceed its income, even if that member was able to find part time replacement.

If one or both members worked for the state of California, or in real estate sales, or a mortgage broker, or IT professtional, in the airline industry, or manufacturing, the liklihood of a substantial wage reduction would be great also bringing the families income dangerously close to the non discretionary expense level.

We know that government supports over 60,000,000 million Americans per year with welfare and other assitance.  That assistance used to come from tax receipts that are no longer flowing in.  We also know that 25,000,000 Americans are unemployed and/or underemployed likely impacting at least another 50,000,000 Americans if we include spouses and children.

Millions more are not counted in the above statistics or facing massive mortgage resets.

We are looking at well over 100,000,000 million Americans who fall square within Zombatic Fallout if government can no longer afford to make welfare payments due to declining tax receipts.

The social and economic costs will be enormous.  These are the kind of issues that Wall Street, the Media, and Government is concealing from you.  Printing money is not an option because costs will rise much faster than incomes accellerating the Zombulation process.

Mathematically, as the economy continues to shrink, servicing debt will consume a greater and greater percentage of incomes from families, business and government.  The greater the percentage of income debt consumes, the less there is to spend on goods and services.  This process will continue to feed upon itself until most of the debt is purged which will result in an economy a fraction of the current size.

We are seeing Zombulation everywhere.....and it WILL GET WORSE!!!!

Today GM's CEO said this July's sales will likely be worse than last year.....so much for a second half recovery as conditions continue to deteriorate.

For the third consecutive month, foreclosure sales jumped significantly as lenders come off the moratorium. Foreclosure sales increased by 24.7 percent following a 31.9 percent increase in May, and a 35 percent April increase.

Office rental rates are collapsing which will likely cause MASSIVE CRE defaults.

At some point, Zombulation will come to an end, the only question now is how small will our economy be when it does......my guess is we have a long long way to go and the result will be a much much much smaller economy.

 The above is simply the math.....and unlike people, the numbers don't lie.  Unless we prepare for the inevitable MASSIVE ECONOMIC Contraction from the current Zombulation policies, social unrest stories like the one in the previous blog will become more and more common.

14 Comments – Post Your Own

#1) On July 14, 2009 at 6:01 PM, jddubya (< 20) wrote:

Your assumption of 10k per year for health insurance is way out of line - especially when applied to Calif state employees.

I challenge the fool community to either support or debunk what I believe is an outlandish assumption.

HOW MUCH DO YOU FOOLS PAY FOR HEALTH INSURANCE ANNUALLY?

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#2) On July 14, 2009 at 6:08 PM, alstry (35.67) wrote:

No its not, there is an article in the WSJ today that puts  the average cost at $12K.  That is what my family pays out of pocket and my wife is a public school teacher.

My brothter in law who is a farmer pays $28K per year because his wife has MS.  My former law partner pays $18K per year for his family.  I could go on and on where most of my friends pay over $15K for a family policy.

But don't lose the forest for the trees.  Many in CA have mortgages 3-5X incomes.

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#3) On July 14, 2009 at 6:19 PM, ChannelDunlap (< 20) wrote:

under $1000, but I'm single.  If I had a family covered it would be approximately $1500.  Include dental in that and we're up to about 2k a year to cover my entire hypothetical family.  But I've been told my benefits are really really good.  I don't have much to compare them to though.

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#4) On July 14, 2009 at 6:20 PM, alstry (35.67) wrote:

jd,

for your satisfaction here is an snipit from the WSJ article:

But rather than hire more full-time staff, chief executive and co-founder Jason Brewster plans to use developers in the Eastern European nation of Belarus, and maybe additional contractors in the U.S. “If health care wasn’t a line item we needed to worry about, I would probably hire directly,” he says. “I’d have better control” over the staff and their work. But with the company paying about $1,000 per month for the average family plan for each employee, the cost adds up to virtually an extra minimum-wage worker for each full-time staff member.

 

Remember, $1K per month is for a group policy, and that is the company portion.....non group policies are much higher.  Stop sweating the small stuff, focus on the fact that our nation is about to be Zombulated.

If government can't make it's interest payments, the money in your wallet is worthless.   If government tries to print to cover debts, interest rates will skyrocket so fast that debt service will exceed GDP.

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#5) On July 14, 2009 at 6:36 PM, caltex1nomad (< 20) wrote:

Damn Alstry you need a better place to work or better insurance.I live in CA. also and I pay $ 140 a month for myself and my wife..$20 co-pay and $10 Rx's.That includes dental and Vision. My employer kicks in for my portion, but not my spouses. I hate paying that because I only go for a check-up every 2 years. You can get decent coverage for about $ 200 a month from Anthem or even Kaiser if your daring. As far as debt goes, keep it to a minimum. No credit card debt. The only debt you should have is a mortgage and Don't buy a house that's more than you can afford. Don't get an ARM unless you know what the hell you are doing.

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#6) On July 14, 2009 at 6:52 PM, alstry (35.67) wrote:

caltex,

You are paying a great rate......but it is not reflective of what is being paid around the county.

My buddies own a number of businesses, this is a common gripe when we are going over numbers and how should costs be allocated among employees.

The numbers are what they are.......there is not much we can do to change that.

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#7) On July 14, 2009 at 7:24 PM, Judochop172 (24.88) wrote:

My mother developed rheumatiod arthritis when she was 55 and lost her job. Her insurance ran $675 a month.

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#8) On July 14, 2009 at 7:36 PM, QwertyHero (< 20) wrote:

What's insurance?

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#9) On July 14, 2009 at 7:54 PM, dickseacup (67.02) wrote:

Alstry, do you consider employer-paid health care premiums, like the employer portion of FICA, a hidden "tax" on the employee insofar as their salaries are reduced by the amount the company has to pay out?

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#10) On July 14, 2009 at 8:30 PM, ralphmachio (25.66) wrote:

Isn't that like when the dealer draws an ace?  It has bad odds.  Don't do it.   

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#11) On July 14, 2009 at 8:46 PM, ralphmachio (25.66) wrote:

They may have been Zombulated just by virtue of being legopeople, on some mental level or other.  See zombulation is impossible without the precursor- being a legoperson.  I get the distinct feeling that the zombulated were zombies all along.  It's just that as legopeople, they had fuel.  Zombies are legopeople with no fuel.  

That's my hypothesis.  I'm waiting till 90909 to draw my conclusion.  :O

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#12) On July 14, 2009 at 8:56 PM, ralphmachio (25.66) wrote:

Hey alstry, set me up a zombulation chart for the crazy old guy who lives in an old caboose down by the crick, has a pack of pit bulls and rides a harley and kills turkey and elk with throwing knives.  Needless to say, he doesn't have insurance, but will be concerned about higher rates for his satellite internet service. 

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#13) On July 14, 2009 at 9:57 PM, Nosignal100 (< 20) wrote:

Out of suffering have emerged the strongest souls; the most massive characters are seared with scars.

The optimist sees the rose and not its thorns; the pessimist stares at the thorns, oblivious of the rose.

 

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#14) On July 15, 2009 at 12:43 PM, LovinMe (80.47) wrote:

Without new government stimulus plans my health insurance would run 9,600.

Discount will end by the end of the year unless the stimulus is modified/extended.

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