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Okay, I am sure most of you here know about the housing market. As a Mortgage banker I saw this coming for some time thus why our need to relocate. I was curious on what everyone here thought about, 1. The housing market and who do you think is to blame brokers or banks? Keep in mind Banks were the ones who provided all the optional loans, such as interest only, negative arms, on top of 100% or 80/20 with no MI...
2. I am sure most weren't aware that the Fed Res lowered rates for lenders yet the rates maintained the same for consumers, yet the Fed doesn't want to interfere and they stated the situation will rectify itself.
3. Unemployment is at all time highs nationwide. More people competing for the same jobs, the lowest bidder will win, leaving us in a deeper hole.
4. More and more jobs are sent over seas (as we already new) and now Disney is trying to kill our children with lead poisoning... Just Google Disney and Lead Poison and you will come accross a story.
5. I just learned this ~~> Milk prices are higher because dairy farms are closing down I think because profit margins are narrowing or something else.
6. Just notified yesterday that Holsum closed, not sure if its everywhere but the Florida plant closed down...
I know these aren't hings we think affect us in our day to day but it does and the more we save the less $$ is dished into our economy. I know I can say I am feeling the economy crumble under my feet and it ain't a pretty feeling.
You forgot to include someone else who deserve some of the blame: the people who took out some of these pie-in-the-sky loans. Probably the same fine folks who just pay the minimum on their credit cards each month (and have a dozen of them). People in this country handle credit very badly, as well as buy things they can't pay for.
And as for the economy being bad, this is nothing compared to the late seventies and early eighties (when interest rates hit something like 18% and inflation was around double digits). Of course, the economy could get worse--these things tend to run in cycles--but I don't see it being bad at the moment.
What? Where do you get this? The Bureau of Labor Statistics says for August 2007, the Unemployment Rate hasn't changed from either a month ago or a year ago. It's 4.6%.
Here are what the unemployment rates were for the last 20 years:
You forgot to include someone else who deserve some of the blame: the people who took out some of these pie-in-the-sky loans. Probably the same fine folks who just pay the minimum on their credit cards each month (and have a dozen of them). People in this country handle credit very badly, as well as buy things they can't pay for.
And as for the economy being bad, this is nothing compared to the late seventies and early eighties (when interest rates hit something like 18% and inflation was around double digits). Of course, the economy could get worse--these things tend to run in cycles--but I don't see it being bad at the moment.
I beg to differ, keeping in mind over 120+ lenders have gone under leaving its employees and brokers alike penniless. I honestly do not think statistics account for everyone, as per CNN there have been many businesses closing. Maybe not everyone is applying for unemployment, and who hoestly fills out the census reports when they get them?
You forgot to include someone else who deserve some of the blame: the people who took out some of these pie-in-the-sky loans. Probably the same fine folks who just pay the minimum on their credit cards each month (and have a dozen of them). People in this country handle credit very badly, as well as buy things they can't pay for.
I agree with this wholeheartedly! I am one of those who pay my card balance in full each month, and don't over extend myself just because "I want". So many people have this mindset these days....they have to have the newest/most luxurious car in their neighborhood. Everything is "keep up with the Joneses" and if you get in a real mess, oh well....there's always bankruptcy and you get to keep your house and all your credit card bills will just disappear. Well, guess who ultimately pays for that lack of discipline? Me, and tons of others like me.
I beg to differ, keeping in mind over 120+ lenders have gone under leaving its employees and brokers alike penniless. I honestly do not think statistics account for everyone, as per CNN there have been many businesses closing. Maybe not everyone is applying for unemployment, and who hoestly fills out the census reports when they get them?
So in the 1970s, 80s, and 90s people did honestly fill out the census reports, and now they don't? Makes zero sense.
Unemployment is most definitely NOT at an "all time high." It's better in some areas of the country than others, but that's always the case.
1. a HUGE number of people are losing their jobs that will not be in the employment stats....Realtors, Mortgage Brokers, Builders, Contractors, Sub-contractors, illegal aliens (who make a large part of construction companies nowadays).
2. Even if you are lucky enough to have a job, you can't live on it.....there is NO WAY that a person can live on $10.00 per hour and raise a family, much less living on min wage, without going into debt (credit cards) or getting some sort of govt assistance (food stamps) or working a second job.
Debt load:
Yes people are living beyond their means, and the two reasons for this is our culture of consumerism, prodded along by none other than the govt and society. And it's this consumerism that is the only thing that is keep this economy afloat......face it, we don't make anything anymore, we just buy stuff that is made in China from each other.
And as I stated above, debt is another way to SUPPLEMENT your income, if you can't/don't want to work a second job, people will go into debt on their credit cards to make ends meet and to have a life.
Mortgage/Home prices:
The mortgage mess is the main fault of the Federal reserve system that pumped excess liquidity (1% interest rates) into the system after 9/11 and the 2000 dot com bust. That excess money had to go somewhere and it went into real estate.
The blame can also be spread to the Realtors that told people that housing can only go up, up, up. Mortgage brokers had a hand in the mess, at least the ones I'm familiar with on the west coast, that are unlicensed and get a hefty fee for every approved loan, they got no money by turning anyone down for a loan, so it was in their best interest to approve ANYONE that applied.
Heck in 2005, I bought 10 homes valued at over 2 Million dollars, on a $65,000 salary, try to tell me that they wouldn't give anyone, any loan that they wanted. I sold all my homes in 2006/2007 as I saw the market heading down hill fast.
Govt - disinformation.
I would take the unemployment rate, inflation rate and anything that this govt says with a huge grain of salt. The govt's official inflation mechanism is continually readjusted to keep the inflation rate looking low. If the cost of homes was still included, the inflation rate would be double digits, then you have the basket of goods that is still used, but is adjusted. Whenever that basket gets to expensive, adjustments are made, i.e. hamburger is substituted for steak, etc. Just to keep inflation stats low.
The reason for low inflation stats is two fold, one is to keep the govts cost down (social security raises, federal retirees raises, etc are based on the govts own inflation numbers). The second reason is to keep everyone placated, thinking that inflation is low when it's actually high.
Wages:
The fact that min wage was kept the same for 10 YEARS is/was ludicrius, gas tripled, milk has gone up by a factor of 4, housing is up triple or more, etc, etc.
Have wages went up? And don't even start with MEDIAN wage increase, you get a median wage when you calculate the big wigs wages in with the normal people. Normal wages are not up, or if up somewhat, they haven't kept pace with costs.
So overall the economy could be worse, and is forecast to be worse by the end of 2007 and into 2008.
The housing market peaked in most of the country in 2005, is it a coincidence that the new bankruptcy law went into effect in Oct 2005, that is an attempt to make everyone a debt slave? You do know about universal default don't you? If not, it works like this, make a late payment on a water bill, light bill, car payment or other payment, your credit card company now has the legal right to raise your credit card interest payment to 29.99%, what happened to Usury laws? Oh I forgot, they were did away with by congress as well at the bequest of the credit card companies.
Bitter, damn right I'm bitter, the credit card companies and banks have used their campaign contributions to stick it too the taxpayer thru acts of Congress and their isn't one damn thing we can do about it.
My advice, pay off your cards, sell what you can, get out of debt and hold on, because if you have been following the financial/credit markets, you know that their is a tsuanmi of defaults and bankrupticies coming. Anyone have money in a Countrywide bank? You might want to take some out while you still can, they are forecast to be bankrupt very soon.
Take care boys and girls, if you have a good job, save up some extra cash and have a plan "B" in case you need to find a new one.
Tony
Views expressed are my own, but based on market observations, your mileage may vary :-)
I have NO sympathy for them. Did they think they could keep giving loans to anyone that could sign on the dotted line forever?
YOU may have no sympthay for the lenders, but our govt sure does. Do you think that the recently announced govt plan to "help out" over due borrowers is nothing but a "bail out" for the lenders. Think about it, if you are already 90 days overdue on your mortgage, is a refi with the govt holding the bag really going to solve your problems? On the other hand, it sure is nice for the lenders to unload those defaulting loans onto the FHA and the American Tax Payer, sure is nice to know somebody in the govt
I agree with you that the lenders that lent out unwisely should be allowed to go bankrupt, and the borrowers that borrowed foolishly on the advice of realtors that real estate only goes up, up, up, should both be allowed to go bankrupt and clear their debts thru default.
But to have the US Tax payer pony up and take the bullet is only going to add to our national debt and push us one step closer to financial armagedon.
Tony
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