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View Full Version : How are you going to use your economic simulus package money?



hrgiger
01-24-2008, 07:19 PM
Well for us Americans, congress seems to have agreed upon an economic stimulus package which looks like it's going to consist of sending all of us tax paying Americans a check for $600 + $300 for each kid. How are you going to spend your money that is supposed to re-invigorate our miserable economy?

My first thought was zbrush (which ironically is around $600 I think). But I have to be more sensible. I'll probably put it towards a credit card.

You know, that way I can buy zbrush on that credit card without feeling guilty.:D

rezman
01-24-2008, 07:55 PM
$446 at Daz right now. :D
http://www.daz3d.com/i.x/shop/itemdetails/-/?item=5535&cat=615

hrgiger
01-24-2008, 08:38 PM
Aw man...you would have to tempt me like that. But must resist. Just bought new computer...Have to put off any extra purchases right now.....

IMI
01-24-2008, 09:14 PM
I was thinking about sending it back to them along with a note that they can't buy my vote.
I don't care how "bi-partisan" it is, none of them have done anything else worthwhile, and no matter how much they bribe me, I'm not going to see any of them in a better light.

Dodgy
01-24-2008, 10:21 PM
Give it to me, you don't want to give the wrong impression to politicians....

Stooch
01-24-2008, 10:51 PM
im outside of the parameters of this tax break. so i get nothing.

zapper1998
01-24-2008, 10:59 PM
They have not signed it yet.....

But I hope they do...

But the "Piont" of it all is "Who" is going to pay for this tax brake???

The next generation "Right"....

Oh well, the Defiect is at how many BILLIONS now, the goverment will never ever be able to pay it off, so what the heck is a FEW BILLION more anyways..

Michael

ted
01-24-2008, 11:47 PM
But the "Piont" of it all is "Who" is going to pay for this tax brake???

We already paid for it. It was taken from us to begin with! :D
Personally I think it should be doubled and most importantly not taken from us next year. :thumbsup:

zapper1998
01-25-2008, 12:08 AM
We already paid for it. It was taken from us to begin with! :D
Personally I think it should be doubled and most importantly not taken from us next year. :thumbsup:


Who took it from us....Call ... HomeLand Security, we been Robbed

:agree:

Triple the amount, Ah Heck with it, just give us all a "Million" and call it, EVEN...

adamredwoods
01-25-2008, 12:33 AM
I find the refund money to be a small part of the whoel stimulus package. The real treat for me is the increase on the Jumbo loans, allowing loan interest rates to decline and allowing me easier access to get in the California home buyers market. Maybe.

voriax
01-25-2008, 01:16 AM
Anyone else getting flashes of that `300 big boys' Futurama episode?

So which one of you is going to buy 600 cups of coffee?

IMI
01-25-2008, 03:33 AM
So which one of you is going to buy 600 cups of coffee?


Actually now that you mention it, I think that's what I'm going to do with mine. I do that anyway throughout the year, I'm sure.
Woohoo! Free government coffee! Maybe next year it'll be cream. :D

Captain Obvious
01-25-2008, 05:14 AM
Anyone else getting flashes of that `300 big boys' Futurama episode?

So which one of you is going to buy 600 cups of coffee?
Can you actually get a cup of coffee for $1?

Steamthrower
01-25-2008, 07:25 AM
I was thinking about sending it back to them along with a note that they can't buy my vote.
I don't care how "bi-partisan" it is, none of them have done anything else worthwhile, and no matter how much they bribe me, I'm not going to see any of them in a better light.

Bravo IMI. Just what I'd do if I had any kids. It's just tax money coming from someone else anyway.

Etch
01-25-2008, 08:04 AM
Anyone else getting flashes of that `300 big boys' Futurama episode?

So which one of you is going to buy 600 cups of coffee?

How much is that cigar?

$10,000.

Oh, in that case I'll just buy the thieves tools for $300.

Hopper
01-25-2008, 08:21 AM
Oh well, the Defiect is at how many BILLIONS now, ...

Billions? Heh .. that's a good one. We hit the $5 Trillion mark in December of last year.

But as for a check .... Hmmmm I'm not sure what my wife will do with it, but I'll ask and let you know! :cry:

THREEL
01-25-2008, 08:30 AM
But as for a check .... Hmmmm I'm not sure what my wife will do with it, but I'll ask and let you know!

You & me both, brother! :dito: :rolleyes: :cry:

TheDynamo
01-25-2008, 09:53 AM
I think it depends on what particular strange foreign object my dog decides to eat that month. Sooner or later it'll go to the vet :)

-Dyn

Safe Harbor
01-25-2008, 09:57 AM
My horse will find a way to steal it from me - she's great at emptying my wallet.

mrpapabeis
01-25-2008, 10:19 AM
W But I have to be more sensible. I'll probably put it towards a credit card.
:D


Oddly enough most people will do precisely that... pay down their credit card debt. Like the last tax cut. Nothing wrong with that. But it dose not stimulate the economy. It will help nervous credit card companies though. During a recession they are the first to "not get paid" when the middle class gets squeezed. So the tax cut will turn out to be a type "welfare" for credit card companies.


Bah!

IMI
01-25-2008, 10:31 AM
I still see it just as a "feel good about your government in this election year" sort of thing.

If they really want Economic Stimulus, they should forego all federal income taxes for 2007, and give us all the money back we put in this past year. And then actually intelligently and responsibly budget the money they have now, to make up for the loss. They might learn something along the way too. Nah, not likely. :D

Steamthrower
01-25-2008, 10:32 AM
Oddly enough most people will do precisely that... pay down their credit card debt. Like the last tax cut. Nothing wrong with that. But it dose not stimulate the economy. It will help nervous credit card companies though. During a recession they are the first to "not get paid" when the middle class gets squeezed. So the tax cut will turn out to be a type "welfare" for credit card companies.

Good idea here is to never get debt on your credit card.

Debt is bad, people! If you don't got the money don't buy it!

Then you can use your check to buy luxuries. Not repay debt.

Hopper
01-25-2008, 10:42 AM
... If you don't got the money don't buy it!

If you have never seen the MadTV parody with Steve Martin about this very statement, I highly recommend it.

I live by this rule also. CC's get paid off at the end of every month. With the exception of one more car payment, I will be debt free at the end of this month - just like every month (House payment not included of course). It really is a good feeling to have.

Steamthrower
01-25-2008, 11:01 AM
If you have never seen the MadTV parody with Steve Martin about this very statement, I highly recommend it.

You bet heck yeah I've seen it! Good stuff, that made the rounds on the financial newsletters back a few months.

Stooch
01-25-2008, 11:07 AM
I think it depends on what particular strange foreign object my dog decides to eat that month. Sooner or later it'll go to the vet :)

-Dyn

http://i33.photobucket.com/albums/d57/godofthunder9010/SW50cal_magnum.jpg

Tzan
01-25-2008, 11:20 AM
Haha Stooch!

This thread has made me think about what I will do with it.

So maybe... make a color zerox (and maybe scan it into my computer) then frame the copy and hang it on the wall. It will serve as a tangible example to my future kids and grand kids as to why they have to pay 90% taxes.

Then deposit the check on top of the heap'o'cash I have in savings. My credit card is always zeroed out.

Steamthrower
01-25-2008, 11:30 AM
A .357 Magnum is a good solution for most ailing pets. Unless they're cute and small and furry, then you use a .22.

TheDynamo
01-25-2008, 11:46 AM
Re: Stooch

Heheh, nothing like a little county justice for the pooch. Although a .357 purchase would probably be cheaper than a vet bill.

-Dyn

mrpapabeis
01-25-2008, 11:57 AM
Ok,

Let me get this straight. We kill our pets. And this stimulates the economy, right?


GP

Steamthrower
01-25-2008, 12:25 PM
No, it stimulates the shovel & spade market.

Tom Wood
01-25-2008, 12:50 PM
Billions? Heh .. that's a good one. We hit the $5 Trillion mark in December of last year.

About Three Trillion of that coming in the last seven years...but I'm not saying anything, nope, not saying a word....:D

THREEL
01-25-2008, 01:03 PM
OK HopperZ! I just about tried to squash the little bug on my screen with my thumb, until I realize it was your avatar.

Very cute! :D

theo
01-25-2008, 01:05 PM
Stimulus = 1800 bucks here. Wife's a career babe, I run a studio and we've got two condensed adults.

I don't care how you frickin' twist this puppy I'll take the cash and spend it all on familial-grade hedonistic pursuits.

...pay enough frickin' taxes as it...grumble...'bout time they give some of it back....grumble....

theo
01-25-2008, 01:07 PM
OK HopperZ! I just about tried to squash the little bug on my screen with my thumb, until I realize it was your avatar.

Very cute! :D

Someone needs to squash HopperZ.

He needs to consider himself very fortunate that I don't know him personally. His life would be a miserable mess, if so. I would duck tape his rear to an anthill just see his eyeballs bulge in pure terror as little crawly things commenced devouring him alive...and very, very slowly. :D

IMI
01-25-2008, 01:24 PM
OK HopperZ! I just about tried to squash the little bug on my screen with my thumb, until I realize it was your avatar.

Very cute! :D


You?
I went so far as to grab one of those special LCD monitor wipes I have, because I didn't want to use a regular paper towel on it. ;)

art
01-25-2008, 01:25 PM
I'll probably waste it on the electricity bill.. or some other bill :(
Maybe extra payment on the principal.
Oh no, its the HopperZ bug again :)

Tzan
01-25-2008, 01:32 PM
OK HopperZ! I just about tried to squash the little bug on my screen with my thumb, until I realize it was your avatar.

Very cute! :D

Yeah its cute! I've been calling it the "Infinity Bug" :)

Hopper
01-25-2008, 03:31 PM
Ha! Thanks guys, you made my day. I got a good chuckle out of it.

I wish I could take credit for it, but I told a friend of mine that I wanted to model an evil little grasshopper for my avatar and unfortunately mine turned out looking like a potato with eyes. He sent me that one with a "well, if you have to have a bug avatar" message.

But the next time I see him, I'll be sure to bring the duct tape! :D

THREEL
01-25-2008, 08:49 PM
Ha! Thanks guys, you made my day. I got a good chuckle out of it.

I wish I could take credit for it, but I told a friend of mine that I wanted to model an evil little grasshopper for my avatar and unfortunately mine turned out looking like a potato with eyes. He sent me that one with a "well, if you have to have a bug avatar" message.

But the next time I see him, I'll be sure to bring the duct tape! :D

I don't know what would have been worse, the bug, or Mr. Potato Head. I'm not scared of bugs. I just don't like them blocking one of my pixels, especially if the pixel had just been color corrected. At least Mr. Potato Head would have been good with a burger & a thick chocolate shake.

androidmaker
01-25-2008, 09:32 PM
from the New York Times
"For practical purposes, analysts estimate, a family of four with an income of $24,000 would receive no government payments at all, and families with incomes below $40,000 would at most receive partial rebates. But a household with an income of $100,000 or more could get back $1,600."
so you might not get much cash.

Captain Obvious
01-26-2008, 01:32 AM
from the New York Times
"For practical purposes, analysts estimate, a family of four with an income of $24,000 would receive no government payments at all, and families with incomes below $40,000 would at most receive partial rebates. But a household with an income of $100,000 or more could get back $1,600."
Err, would that be a family of four with a total income of $24,000?

hrgiger
01-26-2008, 03:58 AM
Err, would that be a family of four with a total income of $24,000?


Is that impossible to believe?

kopperdrake
01-26-2008, 05:01 AM
So is this meant to be a tax rebate thing then? Seems pretty sad when a government has to bribe voters to notice they exist by giving out money...apathy must be pretty bad?

Captain Obvious
01-26-2008, 05:49 AM
Is that impossible to believe?
No, not entirely. It just puts things in perspective. London is a tad more expensive, I guess. :p

T-Light
01-26-2008, 06:10 AM
kopperdrake -

Seems pretty sad when a government has to bribe voters to notice they exist by giving out money...apathy must be pretty bad?
Nah, US voters are probably just like us, we all know our pillocks in power 'exist', we just wish they DIDN'T.

Surprised no one other than Giger mentioned the state the US economy has to be in to make these promises. Last week there was an emergency meeting because they were scared one of the bond insurers was 'going down' leading to a halt in road building, no schools being built etc. Experts have been saying for years the US was in serious trouble, My Mom lives in the states and I've been telling her to get out of dodge for bl**dy ages, she never listens.

Unfortunately, watching financial bigwigs on the 'proper' news shows this week, it looks like if the US goes down, the UK's going down with her. Worse, the UK chancellor pretty much confirmed it when He gave the same 'Healthy, vibrant economy' speech the US gave this week. Sh******ttttt. We're all in very serious trouble.

Righto then, there's only one thing for it. Test out this cockamamie plan for all it's worth, enjoy your free cheques and lash out on everything your heart desires

Quick quick quick, there's maybe some life in the US economy yet.

IMI
01-26-2008, 07:06 AM
The US economy isn't great, but it's not exactly the Titanic, either. ;)
Hmm... well they have begun untying the lifeboats, it would seem. ;)

CAClark
01-26-2008, 07:44 AM
Is giving money away a recognised tactic to avert a recession then?

*Pete*
01-26-2008, 08:04 AM
Is giving money away a recognised tactic to avert a recession then?

yes.

More money in the hands of people increases spending, which in turn ends up as higher demand for producers of goods, which will make them to hire more workers/not fire workers to be able to increase production.

more people at work means more people getting salaries, more people with salaries means again higher spending which increases demand...

its a never ending cycle.

but recently this hasnt been helping all too much, as the economy in a nation is no longer national, but global...a lot of the tax cuts the americans are getting, will end up in european and chinese pockets.


IF...USA will end up with a recession..the opposite of what i wrote above will happen, people will loose jobs, less people will be able to buy goods, demand will go down and more people will loose jobs...a negative cycle that can go on for a long time.

Lowering interest rates drastically and allowing for taxcuts is the only known way to go...but if it doesnt work, the end result will be disasterous.

Norway seems to have a unique position again..and might theoretically avoid being affected by an american recession, but there are many factors involved.

IMI
01-26-2008, 08:16 AM
Ah, they should just print more money. I think maybe three trillion in hundred dollar bills should do it. Then just split it up evenly among the adult citizens.

It's just so simple, I can't believe they don't see it. Want more of something- make more of something. And since they're the ones who own the money printing equipment...
They just don't think. It's not rocket surgery. :D

My Economic Stimulus Package would solve America's economy problem by simply eliminating it. Not the problem, the economy. ;)

Tom Wood
01-26-2008, 08:36 AM
A hundred fifty billion is a drop in the bucket. It's not really about the amount, it's more about the -perception- that there are hands on the levers that are willing to at least try to keep things steady.

The fed interest rate cut did a lot more to pump money into the economy, also by creating the perception among lenders that there's a willingness on the part of the lever-movers to take action to steady things.

It ain't called "full FAITH and credit" for nuthin'. :D

*Pete*
01-26-2008, 08:44 AM
true Tom...its mostly psychological.

It is impressive to see such fast and strong action by the USA to counter the risk for recession...if it will help, we will see.
a few more "bad news" on the market is enough to destroy the positive effect the tax cuts and lower intrest rates have given.

Titus
01-26-2008, 09:15 AM
Lowering interest rates drastically and allowing for taxcuts is the only known way to go...but if it doesnt work, the end result will be disasterous.

Actually what I understand as the original cause of the upcoming problem is they lowered the interest rates below the real value (cheap credit). Giving back money will not reactivate the economy, as others stated before (I'm afraid this can boost inflation).

*Pete*
01-26-2008, 09:29 AM
Actually what I understand as the original cause of the upcoming problem is they lowered the interest rates below the real value (cheap credit). Giving back money will not reactivate the economy, as others stated before (I'm afraid this can boost inflation).

The cause of the problem is not cheap credit as such, but credit given to people who werent able to pay for the credits they got.
lower intrest rates WILL boost the economy, as new investments are cheaper (if you need to borrow money), and people who are having trouble paying the depts they have now, will have an easier time to do so now, with lower intrest on the dept.

the Subprime crisis happened becouse banks were throwing money at people, without caring if the person was able to pay for the loans...the banks (and everyone else) placed there bets on that prices on houses would grow and grow, making it insignificant if people can pay or not, as the value of the loan would be secured in the property.
I have heard that people were able to take loans that were 4-5 times their annual income in USA, while in Norway the upper limit is 2.5 times.

as for inflation, thats for sure...a negative sideeffect, but as things are now, its the lesser evil when compared to economical cooling in all of USA.
Inflation can be combatted later once things are running well in USA again...

theo
01-26-2008, 10:09 AM
I have heard that people were able to take loans that were 4-5 times their annual income in USA, while in Norway the upper limit is 2.5 times.


Normal, hard-working people were bent over the barrel in this crisis.

A lot of smart-asses like to point an accusing finger at people who purchased more than they could afford. The fact is, in today's world (this problem isn't endemic to the US) the gap between the upper class and the lower class is widening considerably, for a myriad of reasons (as expose' of which does not lend itself well to forum discussion due to its lengthy and comprehensive nature).

It is a perfectly normal and commendable desire for everyday working people to 'invest' in a property that has a reasonably good chance of significantly increasing in value.

If the process would have unfolded as 'normal' (based on the last forty years of expansion in the housing market) many of these folks would be sitting on a semblance of wealth. A wealth that would have benefited millions of families across the board significantly.

Many (and most of these asshoes are sitting on their own cash cows) point with aghast contempt to the poor working stiff who purchased more than he/she could buy.

I feel compassion for these working stiffs. How can I possibly look down on someone who takes a calculated risk based on forty years of positive data?

These hoping, dreaming common labourers not only get their jobs sent to China and India and get their wages tightened or even lowered as the cost of living increases. But they get their houses jerked out from underneath them when all the while they were striving to better themselves in pursuit of the "American Dream".

The American Dream sucks. It is a mental mirage.

In my view, there is far more to this story than meets the eye. Ten or twenty years down the pike a little book will come along, garnering little attention, that will expose the trickery behind the housing meltdown.

*Pete*
01-26-2008, 10:20 AM
Well said Theo..but i do think that you are too negative about the future value of property.
I would suggest to everyone who owns property not to sell at times like these, prices will go up again in the future...selling now is losing now.

this is one of the reasons for why it was so important to drop the intrest rates...it will help people who bought when it was expensive and risk selling now when property is cheap...lower intrest rates help them a lot and increase the chances for them being able to keep the investment.

the blame is not on the people who took bigger loans than they could pay for, but on the banks that let them have those loans, ignoring the fact that they cant pay for the loans...the bank still would have value in the property on which the loan was based on.
its in a way, justice when the value of property drops and banks sit with property that has lower value than what they loaned out to begin with..they loose billions.
just too sad that a lot of normal, hardworking people suffer also.

T-Light
01-26-2008, 10:45 AM
*Pete* -

the blame is not on the people who took bigger loans than they could pay for, but on the banks that let them have those loans, ignoring the fact that they cant pay for the loans...
:agree:

Theo -

In my view, there is far more to this story than meets the eye. Ten or twenty years down the pike a little book will come along, garnering little attention, that will expose the trickery behind the housing meltdown.
:agree: All though I think it'll be a BIG book.

IMI
01-26-2008, 10:54 AM
The housing bubble bursting also had alot to do with rampant investing from massive corporations and realty firms. There are subdivisions near me where entire blocks and streets were bought by corporate investors who immediately built houses and tacked 20-30-40 thousand on the price, driving up prices everywhere. And this was going on all over the country.

JamesCurtis
01-26-2008, 11:41 AM
As far as I'm concerned...

The economy hasn't been doing that well since 9/11! When 9/11 hit and I lost business, nobody helped me pick up the pieces or bail me out!! I lost 4 big client jobs totalling almost $40,000 in lost business because the companies I was doing work for went scared! Some of those companies closed their doors, or moved out of my area and took the work with them! I even had investors pull out of deals because of 9/11!! That, in turn made it so that I had no money to pay my bills. I had health insurance that paid nothing at all on needed major surgeries due to "pre-existing conditions". Those surgeries cost $30,000, in which the only way to pay was credit card. It all cost me dearly and I've yet to pull out of it!!

Tried bankruptcy, lost my day job and was thrown out of chapter 13 due to the inability to pay the court ordered settlement amount.

Yeah, the President keeps spending more phantom money on the war effort and other interests, and keeps puting us deeper in debt!!

Businesses around me are closing at an alarming rate.

But I'm not going to give up anytime soon!!!!

As for what would I do with the money? Let's see...

With my luck, I won't get ANY!!

Apologize for the rant!!

*Pete*
01-26-2008, 11:43 AM
it happened everywhere, it happened before and it will happen again.

Im not sure about USA, but in Norway it is far cheaper to buy a house for yourself, than to buy a house to rent it to others...goverment regulates tax laws to allow you to get tax back on the money used to pay the intrest rates...if you live in the house.
this is a 28% return on money that you pay intrest back to the bank, each year.

still, property is, and has always been a sane investment, and i would advice those of you who do not own a house/apartment today, to buy as soon as possible.
prices are low now, but will not continue decreasing for a long time more.
just dont borrow more than you can afford to pay back ;)

*Pete*
01-26-2008, 11:48 AM
I had health insurance that paid nothing at all on needed major surgeries due to "pre-existing conditions". Those surgeries cost $30,000, in which the only way to pay was credit card. It all cost me dearly and I've yet to pull out of it!!

no intention to sound anti-american or anything...but you guys really should push your goverment to follow the European model on healthcare...

your story is shocking, in many ways...I hope it turns out better for you in the future.

Titus
01-26-2008, 12:13 PM
The cause of the problem is not cheap credit as such, but credit given to people who werent able to pay for the credits they got.
lower intrest rates WILL boost the economy, as new investments are cheaper (if you need to borrow money), and people who are having trouble paying the depts they have now, will have an easier time to do so now, with lower intrest on the dept.

the Subprime crisis happened becouse banks were throwing money at people, without caring if the person was able to pay for the loans...the banks (and everyone else) placed there bets on that prices on houses would grow and grow, making it insignificant if people can pay or not, as the value of the loan would be secured in the property.
I have heard that people were able to take loans that were 4-5 times their annual income in USA, while in Norway the upper limit is 2.5 times.


Oh well, we said the same thing but with different lenght ;). This scenario happened in my town in '95, but that time the economy really colapsed.

ted
01-26-2008, 12:22 PM
[QUOTE=theo]The American Dream sucks. It is a mental mirage.QUOTE]

Oh how I beg to differ my friend. If you just dream, you are right.
But I don't know ANYONE who acted on those dreams that isn't better off.
It isn't always easy and setbacks do happen. But if you wake up every morning and try, you will do better then waiting for someone to give it to you.

We bought our second house at the peak of prices. It took about 8 years to sell at a profit. That was on me to deal with!

This time we bought just before the jump and made a killing in equity. My gain for putting my arse on the line.
My son bought at the peak and in months lost thousands. He didn't cry and whine. He's sticking with it, will do fine and it's his issue to deal with. He sees that. But at least he's trying and will benefit.

As for the poor people who got "swindled", I DO feel for them, but if you buy snake oil, deal with it and don't cry to others to make your mistake their problem. Sounds harsh, but people gotta deal with their mistakes or bad luck. Every time people get themselves into trouble they want an easy fix, usually from others. What happened to personal responability? JMHO.

theo
01-26-2008, 12:39 PM
I find it perturbing that as economic structures collapse the upper echelons of wealth seem to become even more enriched while the lower echelons are forced ever deeper into economic hardship.

Point is, are economic collapses and international tugs-of-war part of the workings of a vast machine operated by a tiny, but powerful segment?

Sounds conspiratorial. Fact is, it isn't. I have studied this stuff off and on for years and I am becoming decidedly more aware of how 'manageable' the globe is becoming for highest levels of power and wealth and how collapses and international tugs-of-war between nations are just useful fodder in the right hands.

When one considers the sad capacity people have to be infinitely selfish it doesn't take the IQ of a theoretical physicist to determine that this same capacity resides in the collective mind of the planet's most powerful entities (which may, in fact, NOT be nations) who actually the power to implement measures that safeguard selfish interests.

And what I find the most disturbing is how useful and powerful the collective media is in concocting a resonant visual fabric that is designed to camouflage the worst of intentions.

We don't have the capacity within ourselves to grasp the complexity of the international machine of wealth and power. Which, unduly, makes us easy pickings for manipulation, whether we are aware of it or not.

theo
01-26-2008, 12:54 PM
As for the poor people who got "swindled", I DO feel for them, but if you buy snake oil, deal with it and don't cry to others to make your mistake their problem. Sounds harsh, but people gotta deal with their mistakes or bad luck. Every time people get themselves into trouble they want an easy fix, usually from others. What happened to personal responability? JMHO.

Ted, you are missing the point here. This wasn't snake oil these people were buying into.

The housing market has been an investment haven for over forty years. This is NOT snake oil we are talking about. The decisions these people made were based on very sound market principles backed up with extensive data rating the risks as potentially quite low.

This collapse has affected millions of everyday people, which illustrates to me that this issue cannot be easily defined or dismissed within the context of a just-world view.

Wonderpup
01-26-2008, 12:59 PM
There has to be something wrong with the idea that wealth can be created simply by lending people lots of money they don't have with which to buy houses whose prices have been inflated by the very existance of that lending in the first place. This is a closed circle surely?

I guess that's why they call it a bubble- and look what happens to bubbles when they hit something solid- like reality.

theo
01-26-2008, 02:22 PM
There has to be something wrong with the idea that wealth can be created simply by lending people lots of money they don't have with which to buy houses whose prices have been inflated by the very existance of that lending in the first place. This is a closed circle surely?

I guess that's why they call it a bubble- and look what happens to bubbles when they hit something solid- like reality.

Wealth IS created by borrowed money!!!

And investing in real estate is an excellent way to make money.

The combination here is a particularly appropriate investment vehicle for everyday folks since everyday folks need someplace to live.

Frankly, most people, by the millions, have a hard enough time managing a check book much less trying to figure out whether or not they are being swindled by a mortgage broker. People's live are so complex anymore in the financial sphere; taxes, investment, retirement, savings and education (college funding for children)-the process does take its toll.

Add to this factor a massive amount of calculated speculation by people who should know better and you get a bubble.

*Pete*
01-26-2008, 02:34 PM
Wealth IS created by borrowed money!!!

And investing in real estate is an excellent way to make money.


agreed.

investing in real estate for own purposes..as to live in own apartment/house instead of a rented one, is and always will be, economically sane thing to do.

If you rent an apartment, you will pay for someone elses bankloan and you will loose on the potentially increasing value of the estate, and you will also have no chance to end up with having an apartment/house that is paid in full and is cheap to live in.

Borrowed money creates wealth, but only if you invest the money..using it on consumer goods such as flatscreen tv, car, food will not return any money to you, at all..ever.

If you however, as the stock markets are way down since new year, would borrow money and invest in the right thing and do so while the price is at the lowest...you could pay back the loan within a short period of time, and keep the profit for yourself.
the more you can invest, the higher the profit (by dollars, not percentage).

i wouldnt advice anyone on investing on anything unless you really know what you are doing...its a double edged sword and can go both ways.

prospector
01-26-2008, 04:26 PM
Normal, hard-working people were bent over the barrel in this crisis.

what a farce

didn't anyone read the contract?
The payments that followed the intrest rates?

It's their own fault and again the workers have to pay for stupidity.
But it will be a great investment time...hundreds of thousands of houses coming up for forclosure..woo wee!!

get those little downpayments ready...the banks will let them go for a swan song...

Good times is a comin'

Wonderpup
01-26-2008, 05:45 PM
Wealth IS created by borrowed money!!!

Only if that money is put to work to create real value. What's happened here with UK house prices is simply that the banks became very casual about lending money, which allowed house prices to inflate to a rediculous degree.

If the income multiples of 3,4, and 5 times salary had not been so easy to get, this would have put a limit on how high the house prices could have have risen. So the 'wealth' created by rising house values is an illusion sustained by unrealistic borrowing.

Supply and demand does dictate value, but demand is constrained by ability to pay- all the banks did was to weaken this contraint and the whole thing went crazy. I don't see any real tangible wealth creation here, just a kind of mass hysteria that in the long run can't continue.

ted
01-26-2008, 06:52 PM
Ted, you are missing the point here. This wasn't snake oil these people were buying into.

The investment part of buying in wasn't a bad idea on their part. You are right.
The decision to buy more then you could handle, i.e. subprime loan was their mistake.

Sure the offer is there, but so are offers to get into all kinds of trouble from drugs, drinking, buying too much, eating too much, gambling etc. etc. etc. They made a bad personal decision, which I agree we all face daily and it sucks when we don't do the RIGHT thing. But it is their choice for Godís sake.

My Son was tempted, but bought a lesser house so he could handle a 30 year loan. It's called personal responsibility. He and his Family benefited from his wise purchase.

From my perspective, the more we try and "help" people who make bad decisions with welfare type safety nets, the more we have to take care of people next year. Am I the only one who sees this dummying down of civilization?

mrpapabeis
01-26-2008, 09:37 PM
The investment part of buying in wasn't a bad idea on their part. You are right.
The decision to buy more then you could handle, i.e. subprime loan was their mistake.

Sure the offer is there, but so are offers to get into all kinds of trouble from drugs, drinking, buying too much, eating too much, gambling etc. etc. etc. They made a bad personal decision, which I agree we all face daily and it sucks when we don't do the RIGHT thing. But it is their choice for Godís sake.

My Son was tempted, but bought a lesser house so he could handle a 30 year loan. It's called personal responsibility. He and his Family benefited from his wise purchase.

From my perspective, the more we try and "help" people who make bad decisions with welfare type safety nets, the more we have to take care of people next year. Am I the only one who sees this dummying down of civilization?

I agree with you for the most part. Except I was invited to a party once. It was hosted by a gang of mortage brokers and real estate agents. They made lawyers seem like very nice people. One guy boasted that "you would have to be a complete idiot to do business with me." Apparently business was good.

I run into people that are not as savvy as I am in certain areas, that does not give me the right to take advantage of them. The banks know when the numbers don't fit.

GP

prospector
01-26-2008, 11:19 PM
that does not give me the right to take advantage of them.
And....um...why not?
Isn't that what they are there for?

I remember their types in school...teachers and parents (of my era) always said I would need to know that kind of stuff, and for those of us who actually Listened in school, learned, but there were those who hung in their little cliques who thought they knew everything, kinda like ALL kids now act. Maby not all but certainly most. I see them daily, skipping class, hanging out at malls and beaches.
They are the future easy marks. And they will probably whine and say everyone is expected to help them.

theo
01-26-2008, 11:31 PM
The investment part of buying in wasn't a bad idea on their part. You are right.
The decision to buy more then you could handle, i.e. subprime loan was their mistake.

The 'desire' to do more than one can handle is called the American Dream!!!!

How many amazingly successful businesses only succeeded because some pitbull mortgaged his house three times and borrowed against every single credit card he/she could get his hands on just to build a business.

The myriad of creative ways that people engage in the pursuit of wealth is sufficient reason to understand why many of these people decided to invest their futures on a lowly refinance.



Sure the offer is there, but so are offers to get into all kinds of trouble from drugs, drinking, buying too much, eating too much, gambling etc. etc. etc. They made a bad personal decision, which I agree we all face daily and it sucks when we don't do the RIGHT thing. But it is their choice for Godís sake.


You are over-simplifying for convenience. Offers to get into trouble typically don't offer the hugely beneficial track record of a 40 year housing boom.



My Son was tempted, but bought a lesser house so he could handle a 30 year loan. It's called personal responsibility. He and his Family benefited from his wise purchase.

The lecture here on personal responsibility is a tad over-used, Ted. Personal responsibility is a common social expectation but there is no special dispensation or magic assigned to personal responsibility as if it will cure the ails and misfortunes of mankind.

A lack of personal responsibility would have nothing to do with anything had the housing bust held off for about three years allowing all of the subprimers to refinance their mortgages at an interest rate they could afford, rather than having the rate jump through the ceiling.



From my perspective, the more we try and "help" people who make bad decisions with welfare type safety nets, the more we have to take care of people next year. Am I the only one who sees this dummying down of civilization?

Where is your empathy? And what's this 'dummying down of civilization'? Civilization's been stuck in the slow gear for at least a couple of thousand years. Any sort of movement toward a total standstill certainly won't be the result of financial safety nets.

Helping people who make bad decisions is a valid social concern, Ted. Western civilization is still in predator mode. It struggles to find equilibrium on many facets simply because it is blinded by singular visceral reactions that assert an overt simplification on complex issues.

Society will always have its abusers but I am more inclined to believe that these folks are in a minority.

Helping people who make bad decisions, from time to time, is a worthwhile undertaking. I would much prefer many of these folks keep their families in homes rather than be thrown out on the street.

A cold, stale, miserly indifference to humanity (the Dark Ages, children workers, misogyny, the Inquisition and on and on) that has haunted civilization for countless hundreds of years has been truly responsible for 'dummying' (as Ted calls it) down civilization NOT assisting other people in their moment of hardship.

*Pete*
01-27-2008, 02:31 AM
Only if that money is put to work to create real value. What's happened here with UK house prices is simply that the banks became very casual about lending money, which allowed house prices to inflate to a rediculous degree.


There is more to it that it than only that...the value IS real, that banks allow for higher loans is not the only reason for the inflated prices on housing.

people need to have a place to live, either it is in own house or rented house..thats a fact that cant be avoided.
People also need to move for different reasons, most of them job related..capitals are economical powerhouses and usually have higher salaries and more jobs, making them desirable for people to live in.

but when more people want to live in a certain city, than it has housing, more houses have to be built..causing a construction boom, more constructions the same time than ever before stretch the resources in manpower and materials very thin..making higher salaries for construction workers and higher prices for materials.
so, today it cost atleast 2 times more to build a house than it did ten years ago..ie, more money is put into raising a house, thus increasing its minimum value on the market.

there are lots of cheap houses on smaller, deserted cities where nobody wants to live...the prices we see now are caused by urbanisation, and even if the prices on houses are dropping, the price for building new ones is not..not yet atleast, and it wont drop a lot either when it does.

the drop in prices is caused by raised intrest rates, forcing people to sell, and panic among people who invested in housing to make a profit.
its not the first time it happens, and most certainly..3-4 years from today, the prices are again at a high level.


as for banks lending money...as i mentioned earlier, here in Norway you need to have a job with secure income to get a loan, and even then the maximum is 2.5 times your annual salary...so far, even with much increased intrest rates, the amount of people having to sell becouse they cant afford to keep the house, can be counted with the fingers on one hand...very, very few.

Naturally, when a bank lends 4-5 times the annual salary, people will end up in trouble.
to blame it all on people and stupidity is wrong...not all people understand the deeper mechanisms of economy, banks do...the banks should advice people, not sell products for own profit and gain.
here, actually..if you buy a product from a bank (investment, loan etc etc), and the bank cant proove that they warned you about the risks, you can break the contract and all the expenses fall back on the bank.

I agree with Theo...its the cynical conduct from the banks that lets people to do economical harm on themselfs that is the bad guy in the subprime crisis....its almost like a forest guide letting people of deep into the forest without a map and a compass, and let those who know the terrain find there way out and those who dont..well, they wont.
you cant say that the guide has no responsibility in the matter.

mrpapabeis
01-27-2008, 07:43 AM
And....um...why not?
Isn't that what they are there for?

I remember their types in school...teachers and parents (of my era) always said I would need to know that kind of stuff, and for those of us who actually Listened in school, learned, but there were those who hung in their little cliques who thought they knew everything, kinda like ALL kids now act. Maby not all but certainly most. I see them daily, skipping class, hanging out at malls and beaches.
They are the future easy marks. And they will probably whine and say everyone is expected to help them.


So much for honesty and moral values.

theo
01-27-2008, 08:49 AM
Naturally, when a bank lends 4-5 times the annual salary, people will end up in trouble.
to blame it all on people and stupidity is wrong...not all people understand the deeper mechanisms of economy, banks do...the banks should advice people, not sell products for own profit and gain.
here, actually..if you buy a product from a bank (investment, loan etc etc), and the bank cant proove that they warned you about the risks, you can break the contract and all the expenses fall back on the bank.


Wat is so interesting about this case, *Pete*, is that the banking industry is so rankly complicit to a large extent.

Lenders, whether subprime or prime, have had an established system for years that accurately rates the credit-worthiness of every single customer that walks through their doors.

Problem with what we are witnessing is, the lenders interpreted the existing housing market as an appropriate investment vehicle which is why the money was even made available in the first place to subprime borrowers.

What I find most irritable about the whole thing is the hyperbole spewing from the sphincter-like lips of the banking industry blaming all their ails on poor people who came into their bank wanting too much money. BU!!Shi+!!

The whole thing is like swinging through an Amazon jungle wearing a loincloth fashioned from 80 grit sandpaper.

The media/banking conglomerate is the 80 grit sandpaper hopelessly shining a terrified set of jewels.

prospector
01-27-2008, 10:06 AM
So much for honesty and moral values
And what is wrong with what I said?

You don't think the kids in school now will be easy marks?
You think if they are not in school they are learning?

What did you disagree with?

And is it moral to just say they don't need to learn because the govt will take care of them when I screw up?
You don't think it's moral to tell them they NEED to learn basic math and reading?


Every problem about the housing can and SHOULD be placed directly in the lap of the borrower.

If you can't read a contract that says you get this loan at 2% but in 3 years it will float with the prime rate, and you can't afford a prime rate above 3% then you shouldn't buy the house.

They know how much they make, they know the raises they have been getting at spaced times, they SHOULD know that if the raises continue at those rates, they will ONLY MAKE A CERTAIN amount in 3 years.
If that does NOT cover the loan....then DON'T FRIGGEN BUY.. YOU CAN'T AFFORD IT....idiot

And how exactly does a bank FORCE someone to sign for a loan??

theo
01-27-2008, 10:25 AM
Every problem about the housing can and SHOULD be placed directly in the lap of the borrower.

Absurd, to an extent. The banks establish what you can afford to borrow. It's been this way for decades.

Sure, there is enough blame to go around but to throw the entire ball of wax in the laps of people with understandable aspirations of moving up in the world by investing in their home is patently overboard.

Everyone here who owns a home has been through the hoops required to purchase one. And it ain't easy, unless you been birthed with silver spoonage.

Why the heck do you think the industry has been so heavily regulated for so many years?

It is because people naturally desire to move up but, unfortunately, the risks associated with this fine and normal desire tend to outweigh caution which requires LENDERS who hedge THEIR bets by maintaining a credit supply based on determinable market factors AND credit scores.

To strip responsibility away from the banking industry is to create a madman's paradise where the borrower is in constant servitude to lending institutions. Credit companies would love nothing more than to own a population that is trapped in a lifetime of high interest payments.

As far as I am concerned this plague of modern civilization is nothing more than repackaged Feudalism.

prospector
01-27-2008, 10:29 AM
And......
And how exactly does a bank FORCE someone to sign for a loan??

There is no law that mandates you to take ANY loan from ANY bank or loan institution.

It is purely done with ideas of borrower. Banks only give you a set amount they will loan...Up to customer to say yes or no.

theo
01-27-2008, 10:56 AM
Do you invest? Would you consider buying real estate that would require the risk of investment if the return was significant?

Most of these people purchased and invested, with a solid trust, in a housing market that had proven its viability for over forty years.

In this case, the average person could easily have been under a reasonable assumption that the risks associated with purchasing too much at the outset would pay off in two-three years wherein they would simply refinance a house that would have gained considerable value which would have insured a continued (30 year fixed) low interest rate.

Interest rates are not just based on what you make. They are also based on the worth of your collateral. This is why the investment potential here held such charm for so many.

Collateral based loans are can be exceptionally useful ways to stretch a dollar. That is, if you have the collateral.

And in this sad case the collateral value plummeted due to a host of factors. Many of these factors were far beyond the rationalizing capacity of everyday folks. This isn't to say people are stupid as much as they are consumed with daily living, caring for children, paying bills, brown-nosing Uncle Sam, and a host of other survival-based activities that absorb the typical family in Western culture.

To say that these folks require zero protection from questionable lending practices, prospector, is simply to support the negation of collective moral obligations.

I still say this is all 80 grit sandpaper on the gonads.

*Pete*
01-27-2008, 11:47 AM
The prices on housing has dropped everywhere...about 5% here in Norway in the last half year...and this was during a time when we sat with 2 apartments after moving from one to other, and we planned to sell the older one.
but seeing that the prices dropped to a level that would give us less than we desired from our apartment, we decided to rent it out...and this seems to be a very clever thing to do, im actually making money on that (not much) and can afford to wait for better times for eventually selling the apartment for a value i want to get for it.

i have been very lucky with timing, contrary to many others...now, if the situation stays as it is, the intrest rates will go down, which will increase my profits..and if the situation changes and prices on housing rises again, i can sell at a profit (i still could sell at a profit, but i want more).

prospector
01-27-2008, 12:15 PM
40 years hu?
proven viability?

well here is chart for last 40 years.
We had slumps in early 70's, early 80's, early 90's and now in the oughts (as in double ought) (using shotgun shell anology :) )

So slumps have happened, and will continue to happen. but the price of a median house will in the end always rise.

And what is being said in news adneasium has been said about every slump and yet those who wait, are rewarded with higher returns.

IT'S JUST A CORRECTION FOLKS...Houses were NOT WORTH what sellers were asking......

*Pete*
01-27-2008, 12:23 PM
For once, i totally agree with Prospector :)

prospector
01-27-2008, 12:41 PM
Crap!!!
Take 2 asprin and call me in the morning :D :D

theo
01-27-2008, 02:57 PM
40 years hu?
proven viability?

well here is chart for last 40 years.
We had slumps in early 70's, early 80's, early 90's and now in the oughts (as in double ought) (using shotgun shell anology :) )

So slumps have happened, and will continue to happen. but the price of a median house will in the end always rise.

And what is being said in news adneasium has been said about every slump and yet those who wait, are rewarded with higher returns.

IT'S JUST A CORRECTION FOLKS...Houses were NOT WORTH what sellers were asking......

This is far more than a slump, unfortunately.

But your response here, in spite of its usefulness, is irrelevant to my point.

Here's why:

Charts and graphs are cute but try to present a chart to a house seller in 2004 in a hot California real estate market that accurately illustrates that his property is really worth far less. They'd laugh you out of the room.

Charts and graphs cannot regulate prices and they cannot predict futures with enough certainty that can change present realities.

Charts on the housing market have been available for years but they illustrated abstractions of present realities without foretelling the future. The present reality in 2005, at the height of the housing boom, was that prices were flying high and who the he|| knew the extent. No chart could have predicted the exact deescalation of the boom.

In the end the valuations WERE absurd but millions of people bought into the boom on a reasonable acceptance that what was happening was indeed a boom that may well have continued into the foreseeable future.

...just long enough for them to refinance their homes at 'boom' valuations, that is.

Sadly, millions were caught up in a complex tapestry of high finance which has since crashed to the ground.

As a result, my take is; the banking industry disgusts me far more than the borrowers.

prospector
01-27-2008, 03:30 PM
And it still comes to the bottom line
No-one is FORCED to sign on the dotted line.
They do it of their own free will.

In the words of a great carny
Ya pays yer money, ya takes yer chances.

theo
01-27-2008, 03:37 PM
And it still comes to the bottom line
No-one is FORCED to sign on the dotted line.
They do it of their own free will.

In the words of a great carny
Ya pays yer money, ya takes yer chances.

You're just being a rusty old battleship trying feverishly to avoid being sunk by a theo torpedo. :D

Tzan
01-27-2008, 04:17 PM
You're just being a rusty old battleship trying feverishly to avoid being sunk by a theo torpedo. :D

Haha!



I saw a woman talk about her situation on CNN.
She said she could afford the "interest only" payments for the first few years.
Then when the monthly cost went up, because she had to start paying priciple too, she couldnt afford that price. Then she had a hard time selling the house.

Point is that she should never have taken the loan if she couldnt pay the normal rate. What a dope.

Expecting a refinance to save you is wishful thinking. If things are so tight, then dont do the deal.

I've been responsible and with very little income for many years, the last 3 have been good :) My credit rating is skyhigh, almost 300. But there is no way I'm buying a house while self employed without a major pile of cash in savings to back me up.

ted
01-27-2008, 05:30 PM
Sadly, millions were caught up in a complex tapestry of high finance which has since crashed to the ground.

As a result, my take is; the banking industry disgusts me far more than the borrowers.

While I agree you could call it a crash, it will correct itself as always happens throughout history.
No reason to panic. Panic causes more drastic swings in the market.

I do agree the banking industry kicked itself in the arse, and got what they deserved by reaching too far to pull in profits. But I hold the individual far more responsible for their situation. I feel sorry for them, but it's their own fault.

mrpapabeis
01-27-2008, 05:59 PM
Down here in Florida it's the Real Estate agents and the Mortage brokers you have to watch out for. I've only run into one who didn't try to convince me to something stupid or illegal.

Yeah, DISHONEST and IMMORAL.

GP

hrgiger
01-27-2008, 06:08 PM
Haha!

I've been responsible and with very little income for many years, the last 3 have been good :) My credit rating is skyhigh, almost 300.

Did you mean a different number? Because I've never heard of a score that low.

theo
01-27-2008, 06:17 PM
But I hold the individual far more responsible for their situation. I feel sorry for them, but it's their own fault.

You are just, like, so trying to get the last word in here... I am now forced to inflict you with the fleas of one thousand camels.

theo
01-27-2008, 06:46 PM
Did you mean a different number? Because I've never heard of a score that low.

Actually, 300 is lowest possible score, I think.

Wonderpup
01-27-2008, 06:50 PM
But I hold the individual far more responsible for their situation. I feel sorry for them, but it's their own fault.

The problem is that we have to live in the world as it is, and if you make a world where desperate measures are needed then people will do desperate things.

The point here is the banks did not simply service a market- they distorted it by creating a mortgage arms race where the only way that many people could afford a roof over their heads was to play the game the banks set up.

House prices could never have risen so high had the banks not made the funds available in a cynical and utterly irresponsible way.

Tzan
01-27-2008, 07:04 PM
Haha yeah that was a weird typo. Should be 800.

prospector
01-27-2008, 07:12 PM
amazing the excuses people use just to blame business.
Even tho they can do nothing make someone buy anything, they get the blame.

So personal responsibility is just no more hu?

theo
01-27-2008, 11:15 PM
amazing the excuses people use just to blame business.
Even tho they can do nothing make someone buy anything, they get the blame.

So personal responsibility is just no more hu?

The boom wall-smack was caused by a lack of collective personal responsibility coupled with a severe lack of ethics in lending fused with only heck knows what else which includes speculation by some very large, mostly invisible players.

So, yes, personal responsibility is still very much in the loop though I am not comfortable assigning all the blame to this most convenient of sources.

theo
01-27-2008, 11:53 PM
I don't care how you slice this puppy... sadness is what I feel when I read this.

I have little energy left to condemn when 'punishment' has already been levied;

http://www.breitbart.com/article.php?id=080127183107.ahcwfxrz&show_article=1

Stooch
01-28-2008, 01:00 AM
lol right under the article you linked to is an ad:

"Mortgage Rates at 4.65%

$170,000 loan for $656/month. See New Payment - No SSN..."


I don't care how you slice this puppy... sadness is what I feel when I read this.

I have little energy left to condemn when 'punishment' has already been levied;

http://www.breitbart.com/article.php?id=080127183107.ahcwfxrz&show_article=1

hrgiger
01-28-2008, 05:43 AM
I want to know what you have to do to get a 300 credit score. People who declare bankruptcy don't even get a 300 score (as far as I'm aware). I just say because I've known a few people who declared bankruptcy and they were still able to get a credit card just a month or two after. What a county.

ericsmith
01-28-2008, 09:13 AM
That article does a great job of coloring the facts to make the 60 year old look like the victim.


She says she is one of the last people left on the street. And she is on the verge of losing this two-bedroom house in which she has lived for more than 30 years because she simply cannot afford her monthly payments.

It is a complicated story. She refinanced in 2003, but did not realize the document she signed included provisions to radically increase the interest rate.

So lets just make some assumptions here. If she bought her house 30 years ago, the purchase price was most likely in the range of $30,000 - $40,000. Maybe even less, but I'm trying to err on the side generous side. That would make her monthly payment somewhere in the neighborhood of $150 a month, depending on the original interest rate, but definitely no more than $200 a month.

So even if she was living on social security or welfare, she would have a hard time not making that payment.

Come to think of it, she should have had it paid off in 30 years, so she should own it outright.

Then, in 2003, she refinanced, and when she stopped paying the new mortage in 2006, she racked up $24,000 in somewhere just under 2 years. So we'll assume her new payments were $2000 a month, she would have had to borrow perhaps $250,000 to merit payments like that, even with an overly high interest rate. At normal rates, that would equate to more than $300,000.

So I have to ask, why did she need a couple hundred grand in 2003? Whatever it was, she basically sold her house to the bank to be able to buy it. And really, that's the story that the article isn't telling.

Later in the article it says this:


For county treasurer Jim Rokakis, the greed of the banks is to blame for this man-made disaster.

"All you needed was a pulse to buy a house. Some loans were written with no money down, no proof of buyer's incomes. They did not even check what people were saying. Most of those folks were jobless," he said in an interview.

Those poor jobless people who lied to the bank to get a house they had no way to pay for. Now their house (which they of course deserve, right?) is being taken away. It's a tragedy.

Those greedy bankers are just horrible.

Now I will admit that the mortgage companies should share in the responsibility for giving out too many loans. But the fact is, most of the people that are in the forclosure mess got there because of their own greed as well.

Eric

theo
01-28-2008, 09:22 AM
But the fact is, most of the people that are in the forclosure mess got there because of their own greed as well.


Greedy poor people. How tragic.

Steamthrower
01-28-2008, 09:28 AM
Well...yeah, it is tragic...tragic for them to buy HDTVs and a Tivo and a $40,000 truck when they could live within their means and buy a CRT and a VHS and a $15,000 Dodge...

JamesCurtis
01-28-2008, 09:44 AM
Actually, the lack of work and personal medical surgeries with no insurance have put me in my financial situation.

I did a stint at Target [doing stockroom] over the holidays. I started working 35 hours per week for the first 3 weeks then the hours were cut to a bare minimum of 16 hours a week or less a full 3 weeks before the holiday even got there. They let go of thier holiday help a week after the new year. [including me] Thankfully I have a few LW projects going right now taking its place. But I'll have to hustle up some other work again soon.

Me and my wife had refinanced to get past creditors off our backs. Thankfully, our interest rate is fixed at 6.75%. We do have payments of about $600 per month which is still a bit cheaper than renting a much smaller place than our house. I'm hoping to talk to the mortgage holder in a few months to see if we can get it reduced a little lower. Even 1 percent helps.

ericsmith
01-28-2008, 10:08 AM
What's even more interesting is to read the comments posted on the site that hosts that article. Here's a few excerpts:


This article is completely false. If you look at the Cuyahoga County Auditors website, there is no Sarah Evans who owns a house in the entire city. The neighboring cities with the most poverty are East Cleveland and Cleveland. No Sarah Evans there either. Also, there is no 3922 Chagrin in any of the county records. This story should be removed or a disclaimer should be added. It is pure fantasy!!


Pure fiction, Chagrin Blvd (not Street) ends in 14000 and becomes Kinsman. Shaker Hts. Beachwood, Woodmere and Pepper Pike are all doing well, thank you very much. Just check out the Beachwood mall, or Eton for the type of stores that are indicative of the demographics.
Even Fresh Market opened in Shaker hts. recently and if you ever been in one you know that it is an expensive place to buy food. Cleveland and Warrensvile are a different story.

Bottom line is that in the age of internet you cannot BS even some people sometimes. Next time the author should have the rectitude to put his/her name on the article.

Steamthrower
01-28-2008, 10:12 AM
There's journalism for you. Pretty creative, eh?

*Pete*
01-28-2008, 11:22 AM
I had no idea, untill reading this thread that it was so easy to get a loan in USA...you guys are far more socialistic than we are!! *ducks* :D

Here, in order to get a loan, you will have to have a stable job, decent income and no previous problems with paying bills (youre checked 3 years back.).

and even then..you get maximum 2.5% of annual income as loan, less if you have downpayments left on your car, or if you have children (extra costs).

to be unemployed, student or a social wellfare receiver automatically disqualifies you from loans...the same if you have lived less than 3 years in Norway.

Steamthrower
01-28-2008, 01:35 PM
I had no idea, untill reading this thread that it was so easy to get a loan in USA...you guys are far more socialistic than we are!! *ducks*

But also, here it's all private, which is a bit different from over there, where it's all heavily government-centric.

prospector
01-28-2008, 01:47 PM
There's journalism for you. Pretty creative, eh?
Isn't that typical?
Always made up facts or downright lies..just to furthur an agenda

But then they are only reporting to peeps like Theo.

prospector
01-28-2008, 01:51 PM
I had no idea, until reading this thread that it was so easy to get a loan in USA...

Well it's even easier than that....if you know the right people.

No paperwork involved, just ask..
Interest rates are a little bit higher for that privilege.

If you dont pay tho the penalties are a little more serious.

Hopefully you have enough bones till it IS paid off.

art
01-28-2008, 02:02 PM
It is possible to get loans without income verification but the interest rates are a little higher. Particularly useful for those who do not report their full income and would not otherwise qualify for a loan for that particular amount based on the paperwork.

*Pete*
01-28-2008, 02:11 PM
But also, here it's all private, which is a bit different from over there, where it's all heavily government-centric.

Our banks arent goverment ovned, even if heavily regulated (as most business, even "over there").
In Oslo alone, i have a choice of American banks, French banks, Swedish banks and Norwegian banks...perhaps even more than i know of, i doubt the Norwegian goverment has much to do with the French bank for example.

they are, to my knowledge privately owned, just as in USA.


the last few months (waiting for the new Beta) i been learning a lot on the NT forums, and most important of all things i learned has been that you Americans arent living in that different world as you think.
our goverments work in ways that have far, far more similiarities than differences.
our taxes are nearly the same (about 2% difference between me and IMI), our rights and priviligies are the same, laws the same...we call our goverment social democratic, while your goverment is like a twin brother to it.

the main differences between our nations (EU-USA) is not in taxes and laws/rights...its on how the tax money is spent, yours being more on the military and ours being more on the free healthcare.

but all in all, nearly no differences at all...believe it or not. :)


imho, our system (regarding loans) is better, as it minimises the risk for exactly what happened in USA.
our prices on housing were also dropping (increasing now..), becouse we do not have nearly as many people who cant afford to pay the loans than you do, much thanks to the way the banks deal with loans and payback ability.

prices dropping a lot (crashing) is unlikely here, as unemployement is low, the intrest rate has peaked (at 5.25%), salaries are increasing....all that decreasing the risk for people being forced to sell.
and really...the situation is very much the same in USA, or would be..if you would not have lend that much money to people the banks knew would not be able to pay it back.

this brings us back to the blame issue....sure, you can blame the poor taking risks, but here we dont allow the poor to take risks at all....
want a house, get a job...then a loan, if finding a job is difficult, you will simply have to rent a house...simple as that.

zapper1998
01-28-2008, 02:15 PM
Oh well, the Defiect is at how many BILLIONS now, ...



Billions? Heh .. that's a good one. We hit the $5 Trillion mark in December of last year.

But as for a check .... Hmmmm I'm not sure what my wife will do with it, but I'll ask and let you know! :cry:

Oooppssyyy I ment "Trillions", what after trillions any way, ????


"In this country, nobody owns anything"
thats a Quote from some Gov Official, can't remember who said that....

Michael

Steamthrower
01-28-2008, 02:40 PM
the last few months (waiting for the new Beta) i been learning a lot on the NT forums, and most important of all things i learned has been that you Americans arent living in that different world as you think.
our goverments work in ways that have far, far more similiarities than differences.
our taxes are nearly the same (about 2% difference between me and IMI), our rights and priviligies are the same, laws the same...we call our goverment social democratic, while your goverment is like a twin brother to it.

You're probably pretty right. Semantics is the only thing that differentiates us. We're as socialistic as the next. Right on, Pete.

amath
01-28-2008, 03:09 PM
Pete

What is your debt in Norway?
This is what concerns me in the USA mostly.
If our government can't contol spending and our debt keeps increasing
what happens next. Has our debt to gross national product ever been this high?

War debt seems to be eating us alive also. Can we really afford to fight on that many fronts?

Id rather see individuals pay for national health rather than buisnesses. Every body have a stake in this instead of burdening small buis. ect.
I would rather pay for this than wars. Bolster United Nations to take action on runaway countries.

I think both sides are to blame equally on the housing issue. I think we all have to work together to fix this. This being government,banking and individuals. It is a big problem that needs imediate attention. New guidelines need to be written. Building booms seem to last about 10 years max.
This one has been going 15 years without a correction. Could this be part of the problem?

I do think this will turn around. It will take a couple of years to start on the upside though.

just some thoughts Al

Lightwolf
01-28-2008, 03:19 PM
Pete

What is your debt in Norway?

Lol... none. Norway is one of the richest countries in the world. The only problem Norway has is how to invest the surplus for the future...

(Hint: don't lend it to other countries ;) )

Cheers,
Mike

Lightwolf
01-28-2008, 03:24 PM
No external debt - public debt is around 44.8% of GDP.

Cheers,
Mike