Real Estate Market / Inflation / Recession / Depression (Colorado Springs: mortgage, credit, student loans)

[CosmicWizard]

sterlinggirl wrote:

1000 more foreclosures than the same time last year, and the headlines read 'foreclosure rate halved'

This reminds me of a headline reported in a Russian newspaper concerning the results of a US - Soviet Union track meet during the Cold War days:

Soviets take the Gold. US finishes Last.

[jazzlover]

I'm at the point that I don't read the drivel about foreclosure rates any more. First, they tend to be retrospective--properties only enter foreclosure when payments have been delinquent for a period of time. While foreclosure rates are instructive as to how rough the economy has been for awhile, they don't show the half of how rough things are going to get. Some inkling of that can be found in this article by Jim Jubak (hardly a doomsday prophet) on the subject of American consumer debt in general: US deep in debt and still digging - MSN Money .

People, including Coloradans, are now paying at the gas pump for the Fed's bailouts, as well our personal and federal debt, as the dollar continues to crater and commodity prices (including oil) continue to skyrocket (another record for crude oil today).

Eventually, people are going to realize that all of the "don't worry, be happy" BS in the world can not undo the self-mutilation Americans have done to their own financial security, as well as to the national economic and energy security. Putting makeup and a smiley face on after you've slit your wrists is unlikely to save you.

[LBear]

The reasons for this current economic problem is more than self-induced. A lot of external forces have played on this situation (Iraq war, China, Europe, government blunders, etc.)

Right now times are tough but I believe America will prevail. [mod cut]

In 2010, this will all seem like a bad dream. America will move on and overcome. Pessimists will always complain, groan, and cry "the sky is falling", due to their twisted psychologically, it makes them "happy" to see misery befall on others...

[Bob from down south]

That hack job is reminiscent of the old Radio Moscow-style attempts to spin an obviously bad news story. If I may paraphrase...the number of foreclosures is larger than last month, getting bigger each month, but not ramping up to escape velocity quite as aggressively as before. Or, in other words, the road to perdition is now a 12% downhill grade instead of 15%. It leads to the same place, but we'll just get there a little slower.

Knowing the timing of the waves of bad loan vintages, and knowing that the time from first missed payment to foreclosure auction is 9-12 months, we can deduce that we are only now seeing the leading edge of a predictable tsunami of foreclosure-spawned REOs.

Also keep in mind that a large number of banks are allowing borrowers to get considerably further behind before starting a foreclosure, skewing the apparent size of the problem down and to the right on the timeline. This is for a variety of reasons, including:

1. The sheer number of defaults has swamped their ability to process them in a timely manner.

2. They don't want to have to sell assets as fire-sale prices in some neighborhoods lest they drive down appraised values for other properties they or other mortgagees may own nearby, exacerbating the hit they take on the books.

3. They don't actually want to complete a foreclosure and take legal ownership of a property if they will be expected to maintain it and pay taxes on it once it's theirs.

4. They lost the deed of trust in the securitization paperwork shuffle and can't prove they have a claim on the house.

[Bob from down south]

Originally Posted by LBear

The reasons for this current economic problem is more than self-induced. A lot of external forces have played on this situation (Iraq war, China, Europe, government blunders, etc.)

Iraq war - self induced.
China trade deficit - self induced.
Europe - largely self-induced.


[mod cut]

Originally Posted by LBear

In 2010, this will all seem like a bad dream. America will move on and overcome. Pessimists will always complain, groan, and cry "the sky is falling", due to their twisted psychologically, it makes them "happy" to see misery befall on others...

In 2010 it probably will seem like a bad dream...one that we're still deeply trapped in...and we're likely to be wishing we could wake the hell up.

I have to wonder what the optimists were saying in 1931...?

[sterlinggirl]

Originally Posted by Bob from down south

I have to wonder what the optimists were saying in 1931...?

I'd bet that by the year 2000......we'll have scientifically proven methods to make sure the economy always stays on track.

[tfox]

Originally Posted by jazzlover

As mentioned above, Frontier Airlines filed for bankruptcy this morning. Others ARE going to follow.

Yes, too bad about Frontier Airlines, they're a customer favorite. However, the Chapter 11 saga is nothing new, or even unique to Frontier. All the majors except AMR (American) have been in and out of chapter 11 in the last few years, using the protection of Chapter 11 to eliminate debt and renegotiate labor contracts. Airlines simply can't make money over the long-haul in the system we have today.

The sad fact is that the airlines as an industry have a huge net loss over their history. The history since deregulation is the worst of all. The only reason why any airlines are still flying is essentially due to the combined generosity of the courts and various levels of government. Without that, any airline "profits" are illusory.

So, Frontier may disappear or may not... it really depends on how charitable the feds are being over the next year, and what kind of deals they can swing in bankruptcy.

Frontier is by far my favorite airline, so I do hope they're able to swing things their way in court. To be sure, aviation is a broken system, but since it's broken, I'd like to see the home team be able to work the system too.

[jazzlover]

Some dire predictions in this thread? Yes. But there is plenty bad happening out there to justify them. What I see in responses to those of us who are exposing those less than savory happenings are largely exercises in self-delusion--basically "It can't be this bad," "That could never happen here," "We didn't screw up that much." It sort of sounds like some of the officers in Pearl Harbor on December 7, 1941 who refused to believe that Japan was actually attacking when all they had to do was look at the Japanese planes flying overhead and see the smoke over the harbor. The just didn't want to face the fact that their precious little world just got changed forever. It's hard to fault people who flat don't see something coming, but it's a little harder to forgive when things are blowing up right and left and bodies are flying everywhere, and THOSE PEOPLE STILL DON'T WANT TO BELIEVE IT'S HAPPENING.

I long ago quit believing that Bernancke, Paulson, Obama, Clinton, McCain or the Tooth Fairy is going to get us out of this mess. I'm figuring out how to hunker down and try to financially survive what lies ahead. It won't be easy--for me or anyone else.

[CosmicWizard]

Though I am a lifelong realist/pessimist, and currently an optimist in training ( I picked a hard time to make that transition ), I do not deny that all the crap hitting the fan espoused in this thread is happenning. However, I see no value in rehashing it over and over. By focusing on all this crap, we are perpetuating the problem(s) and doing nothing to solve them. Making these dire predictions ( even if they come to pass ) is merely an exercise in stroking the ego.

[jazzlover]

Originally Posted by NewAgeRedneck

Though I am a lifelong realist/pessimist, and currently an optimist in training ( I picked a hard time to make that transition ), I do not deny that all the crap hitting the fan espoused in this thread is happenning. However, I see no value in rehashing it over and over. By focusing on all this crap, we are perpetuating the problem(s) and doing nothing to solve them. Making these dire predictions ( even if they come to pass ) is merely an exercise in stroking the ego.

The first step to solving any problem is to acknowledge that it exists. Millions of Americans, including much of our political leadership, are still living in denial about how serious the issues we face really are. So, continuing to beat the drum slowly to encourage recognition of the issues doesn't seem inappropriate to me. As to solutions, I agree, they need to be found. Some solutions are actually being articulated, some right here on this forum. Unfortunately, almost any of the viable solutions are going to involve some significant discomfort, sacrifice, and change by all Americans--and, right now, no person in a leadership position (or among those who want to lead) seems to dare suggest them because it would amount to tacit acknowledgment of some shortcomings in our current way of living that most Americans are not yet willing to confront. So, we face the unpleasant conundrum right now that none of the people who might be able to lead the nation out of its current deepening mess (and, in my opinion, NONE of the three Presidential candidates is in that group) will get the chance. That is the reason for the last sentence in my last post:

I long ago quit believing that Bernancke, Paulson, Obama, Clinton, McCain or the Tooth Fairy is going to get us out of this mess. I'm figuring out how to hunker down and try to financially survive what lies ahead. It won't be easy--for me or anyone else.

I am still debating with myself whether Colorado is going to be a good place to try to weather what lies ahead. It becomes a question of not what is the best place to be, but rather what may be the "least worst" place to be.