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KCT
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Our stimulus money will go towards our daughter’s wedding, so I suppose we will be stimulating the local economy!
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whatevergirl
Guest
Yes, despite the economy, a few months ago my dh landed a great job with Disney, but was leary because one would think that when the economy slows, people won’t be taking trips, etc…but he said the other day that Disney does not lay off. So that was a relief. I also make a good salary, but the bonuses could be a bit better…hoping for a better next quarter:thumbsup:
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whatevergirl
Guest
How about this stat?
I heard on this financial show last week, that the highest sales of homes on record in HISTORY, was 2007!! The financial guy from the show said that despite the gloom you hear in the media, these stats show another side. I would not have guessed that!
I heard on this financial show last week, that the highest sales of homes on record in HISTORY, was 2007!! The financial guy from the show said that despite the gloom you hear in the media, these stats show another side. I would not have guessed that!
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Al_Masetti
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Only about 2% of mortgages are in default. (According to Larry Kudlow on the radio this morning.)
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drafdog
Guest
As I have been unemployed for almost a year now, the answer is a rousing “Yes.” And this with two college degrees and decades of experience.
It doesn’t help when lending companies lend money at rates they can’t afford to people who can’t pay them back. It is compounded by the fact that the companies have willfully and systematically engaged in turning a blind eye to the folly of their behavior. Now we have the federal government helping to cover the “loses” of a company that poured itself down the drain. No one ever said politicians were intelligent.
Matthew
It doesn’t help when lending companies lend money at rates they can’t afford to people who can’t pay them back. It is compounded by the fact that the companies have willfully and systematically engaged in turning a blind eye to the folly of their behavior. Now we have the federal government helping to cover the “loses” of a company that poured itself down the drain. No one ever said politicians were intelligent.
Matthew
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whatevergirl
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so why is it perceived as such a crisis? now, in my neighborhood alone, there are six large houses sitting empty–with foreclosure signs, with phone numbers to call if interested in buying. why are sub prime lenders in such dire straits if the stats show a drastically different number? just in your opinion, al, why is this?
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whatevergirl
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im sorry to hear that matthew.
when you say unemployed, you have no sort of income whatsoever? or do you mean you can’t find work in your specific field? i’ll keep you in my prayers…that is terrible.
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Inman
Guest
Only as it relates to increased food and fuel prices and the impact of the downturn in market on my 401k. Since I am saving for the long term, Im not that worried about 401k. It could have a positive impact since what I am investing now is at a lower price and the market will eventually go back up to where it was and beyond.
Probably the biggest impact is the weakness of the dollar versus the euro. We had been planning a trip to Europe as a sort of a graduation present for my wife. I’d rather put off Europe until the dollar rebounds, but we are going anyway.
Probably the biggest impact is the weakness of the dollar versus the euro. We had been planning a trip to Europe as a sort of a graduation present for my wife. I’d rather put off Europe until the dollar rebounds, but we are going anyway.
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whatevergirl
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yes, our 401k’s are not that affected right now–since we are saving long term. Interestingly enough, though, I read an article that more and more people are liquidating their 401k’s and paying the steep penalties, taxes, etc because they just can’t live on their incomes, or there are layoffs, etc…it was a sad article. The article’s author is CFP, so his suggestion was whatever you do, please don’t do this, because your 401k is for your future, when you will be unable to work in some cases, fulltime, and also you will be in a different tax bracket at that point.
I think it’s crucial to put everything in God’s hands–and just keep being good stewards. If something falls through, God will take care of things. I believe this, anyways.
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yessisan
Guest
It most definitely has had a bad impact on us. I thought I’d find a job w/in a week when I quit my Real Estate job, and nope… still unemployed. Dh had no hrs for 2 wks then a few days he’d be called in (he works in construction), and then a few days he had off, until he had no hrs at all. At least he know a lot of people and he had 2 job offers. But sadly, with his income alone, we can’t pay for the house. In fact, i called the bank yesterday and they are “trying” to help us but they want us to pay $4000+ upfront to change our loan so the payments would be cheaper.
I really don’t care any more, we’re losing our house, but at least we can still count on DH’s credit to get us an apt or a manufactured home
I hated the idea, but right now, anything will do. Everything has gotten so expensive! I paid $194 for pge! And we barely use gas and electricity, imagine if we used it! Food’s expensive, ugh!
I just hope this ends soon so I can get a job!
I really don’t care any more, we’re losing our house, but at least we can still count on DH’s credit to get us an apt or a manufactured home
I hated the idea, but right now, anything will do. Everything has gotten so expensive! I paid $194 for pge! And we barely use gas and electricity, imagine if we used it! Food’s expensive, ugh!I just hope this ends soon so I can get a job!
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AHapka
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What’s pge?I paid $194 for pge!
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yessisan
Guest
Pacific Gas and Electric
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AHapka
Guest
Ok, thanks
I will pray for your situation. And God’s will in your life. I hope it gets better soon…Around here, winter drives it up for us, too. My last gas and electric bill was $299. In summer, though it’s around $80-$100.
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Al_Masetti
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Are you familiar with CE Weekly? It has been helpful to a lot of folks in the engineering community. If you PM me, we can discuss further. If not or either way, I will add you to my prayer list … attached to my computer screen. Please add me to your prayer partner list.
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1ke
Guest
While *overall *foreclosures and defaults are small they are almost ALL subprime mortgages. Default rates on conforming loans (prime loans) are miniscule, something like 0.8% of all prime loans. Subprime, in contrast, is upward of 15% of subprime loans.
How that spreads into the larger economy is that these sub-prime lenders, in order to manage the risk, sliced up these mortgages into “mortgage backed securities” and sold them to investors. They promised large returns b/c of the higher interest rates and “creative” loan types (interest only, 40 year, ARM, etc).
So, now Grandma’s pension fund-- and (likely) *your *mutual fund-- owns these “mortgage backed securities” which aren’t paying off the high rates of return they were expected to b/c people cannot pay them and are defaulting on them. They are tanking.
In trying to keep the investment community afloat, the Fed is flooding the market with money and cutting the Fed Funds rate. This creates inflation and devalues the dollar.
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Al_Masetti
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There were supposedly some surveys done … how are you personally doing and how are your neighbors doing.
Very large numbers of individuals said they were doing fine, but that their neighbors were hurting.
The problem is that the results are inconsistent. In other words, the percentages should be identical.
So you have to ask if maybe the Mainstream Media is talking the economy down. Unemployment is around 5%, which is almost as low as it gets. During recessions, unemployment is much higher. And in depressions, unemployment is up around 20%. So, we’re not there.
Kudlow suggested the recession ended in mid-January.
When corporate executives get nervous about the economy, they cut capital spending. And in past recessions, their nervousness corresponded to and coincided with the bottom of the recession. In other words, they reacted late and over-reacted.
It is also almost impossible to really determine when a recession actually begins. The standard “test” is to take a graph of the index of lagging indicators and literally turn the graph upside down. The recession becomes obvious. However about 1990 or so, the index of lagging indicators got changed and it no longer worked. No idea if it got changed back.
I have no idea why six houses in your neighborhood are in foreclosure. They could very well have been built on speculation and the builder(s) were unable to sell them and walked away, leaving them up to the banks to sell. Which is different from specific individuals losing their homes. Might even be just one builder and just one bank.
Don’t know if those six homes are a representative sample. It might be or maybe not.
It would be interesting to call the phone numbers listed on the signs and just inquire about the circumstances.
There was a television program about Stockton, California … huge developments of houses up for foreclosure. But it almost seemed like an organized “scam” … huge numbers of houses were “sold” to people who had no prayer of making the payments.
On the other hand, the sub-prime mortgages allowed a lot of people to buy homes who otherwise would not be able to do so and the vast majority are making the payments … knowing that at some point the value of the houses will increase and they won’t be underwater any longer.
According to Larry Kudlow, in 1999 the Glass Steigel Act was abolished … and following that the Community Reinvestment Act was passed. These two actions resulted in opening the mortgage market to folks who normally would not qualify. Interested folks might find it educational to check out these two acts of banking legislation and their impact on the current situation.
Just as the previous bank scandals were owing to Congressional actions that “liberalized” banking laws (especially FDIC insurance limits being raised dramatically) … which led to the previous Savings & Loan crisis, the current difficulties are the result of Congress making it easy for unqualified borrowers to get bank loans. In both cases, essential safeguards were removed and scammers moved in with great enthusiasm to take advantage of the situation.
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whatevergirl
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Thanks for your reply, Al. I think in Florida, it’s especially bad. Before we moved here last summer, we were told that many people were buying up multiple properties often for more than they were worth (and much more than they could ever hope to get for them now–like maybe $75-100k disparity) in hopes of flipping them in a few years, and using these as investments. Well, let’s face it, homes that would normally be $250k in a normal market, are not going to sell for $600k in a few years–it is astounding to me that people would even think that. I mean, yeah, if you bought a house here 15 years ago for $150k it’s easy to have equity in it now, and sell it for $250k. Not if you just bought the house a few years ago. So–I dunno, it’s sad though. Yes, common sense should have played a part–personal responsibility should have played a part, but overall…it is still a sad situation for many here in Florida.
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Al_Masetti
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One of my friends just emailed me and said they bought a really nice house in South Carolina for not much money. The decline in house prices is a blessing for people who have been careful.
I seem to recall reading that the Feds are arresting people for fraud, left and right. There are organized rings of people making false statements of their income, inflated appraisals, getting bank loans and then walking away with the cash. But they are being caught and put in prison.
There are rings of scammers all over the place. Credit cards. Car accidents (often the doctors and lawyers are in the same building … did you see the movie that some insurance company made … they staged a phoney bus accident and a slew of people got ON the bus and faked injuries … all the while the cameras were rolling) …
A guy I worked with (who didn’t like me) … I read that he went to prison for a coin operated laundromat scam. I had to work very hard to not take pleasure in his “misfortune”. So I pray for him. [How does a laundromat scam work???]
But some people do launder money.
Long distance telephone scams. [One day I needed to make an actual telephone call and stumbled into one of those phone scams while it was underway. The “proprietor” wanted me out of there immediately but didn’t want to make a fuss … so he gave me a free phone call. It was at one of the most expensive hotels in NYC! I “assume” they knew what was going on in their own hotel; but I was not about to go hand-to-hand with these guys!!!
]MEDICAID!! Billions are stolen every year in New York State alone; the newspapers constantly berate the NYS government for failing to stop the fraud.
Then there are the African tribal princes who only need your bank account information so they can collect their inheritance … how many times a week do you get those emails and faxes. One famous guy actually went for it, but went too far … traveled there to meet his “partners” … nice gullible old guy … they killed him.
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whatevergirl
Guest
Yes, it’s a buying time, for sure. Out of these 6 relatively newly built homes in my neighborhood (or I should have said subdivision) …one can really get a good deal. Who would have thunk it, that banks would be realtors in disguise??
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