Is the economy really that bad?

[Mahnahmahnah]

When we first moved out to Vegas, it was during the boom. People where buying up real estate there and flipping/ sitting on it. The prices of the homes jumped for ex. from say $195k to $275 in a matter of months. The appraisers had to go along with these inflated amounts or nobody would be able to buy a house there. Meanwhile, the people who where not selling decided to cash in on that and take out loans. This all has to do with greed and if you look how bad the mortgage situation is take a look at CA and NV, they are at the top. As I saw it, it was all CA people buying up houses in LV during that boom. Some where buying not one but two houses to sit on or flip. And then once the dust settled in LV they all started talking about how AZ and FL where the next places to buy up real estate.

Buying real estate as investments are for people who can actually afford it. Unfortunatley everyone wanted to 'get in on the deal' and this is another reason why the mortgage crises is so bad IMO.

 

[BriarfoxinWA]

Good. I read an article about foreclosures and all of the people in the article had terrible credit and could not get a car loan, but could get a mortgage. They all thought, "Well if the bank says I can afford it, I guess I can."

Personally I think your going to see it go far in the other direction. Its going to get harder and harder to get any kind of loan even if you do have good credit. Probably not a bad thing though.

 

[Aisling]

You mean John McCain this morning on Good Morning America?

http://abcnews.go.com/gma

I didn't mean McCain, but I just read through your link, and found it interesting, especially this: "blamed "the old-boy network and the corruption in Washington" for the strains facing American families."

Hmmm, I don't know what to say, except that I always thought Republicans were in favor of less government/more personal responsibility.

And I thought Democrats were in favor of more government/more handouts.

Thanks for the link.

 

[arminnie]

Also quite possible that everyones 401k's...are $1 balance in the next week, and we have no controll over this.

Not mine - I sold a few weeks ago and am sitting on cash to reinvest now at a much lower price. I did this right before dot com crash too.

edited to add - I am not clairvoyant - I've just personally been bit by "bubbles" in the past. If it looks too good to be real it won't last.

Truth: For every bubble there is a bust. But conversely for every bust there is a recovery eventually.

 

[perdidobay]

Hmmm, I don't know what to say, except that I always thought Republicans were in favor of less government/more personal responsibility.

And I thought Democrats were in favor of more government/more handouts.

Thanks for the link.

Actually, the Libertarian Party is the only one in favor of less government/ more personal responsibility.

 

[Aisling]

Actually, the Libertarian Party is the only one in favor of less government/ more personal responsibility.

That's true, and that's why my 22 year old son is basically wasting his vote on Ron Paul.

 

[Quiksilvr]

The law firm I work for is on pace to have a record year. Everyone is busy and most of our clients pay their bills.

To those who wish more regulation, I ask if you really understand what that entails? Most of the legal work I do is regulatory in nature, and with increased regulation comes increased costs. Most of my tasks exist because of regulation, and I bill out at several hundred dollars an hour. I work for big companies who sell things to you, so those regulatory compliance costs are being passed right on to you when you make purchases. Increased regulation is great for me because it gives me more work.

Some regulation will offer you more protection, but if regulations aren't drafted expertly they just create more problems than they solve. "Reactive" legislation and regulation always has holes in it because of the way it comes into being, and those holes are exploited by lawyers and their clients. You don't just aim "Regulation" at a problem and launch it like a missile. It has to be very carefully created, monitored, and enforced.

 

[sahd2one]

Link please to where a Democrat ever said that. Just because you write it on a BB doesn't mean the rest of us have to believe it.

Sigh...

Here you go:

http://www.ibdeditorials.com/IBDArticles.aspx?id=306370789279709

But it was the Clinton administration, obsessed with multiculturalism, that dictated where mortgage lenders could lend, and originally helped create the market for the high-risk subprime loans now infecting like a retrovirus the balance sheets of many of Wall Street's most revered institutions.\

Tough new regulations forced lenders into high-risk areas where they had no choice but to lower lending standards to make the loans that sound business practices had previously guarded against making. It was either that or face stiff government penalties.

The untold story in this whole national crisis is that President Clinton put on steroids the Community Redevelopment Act, a well-intended Carter-era law designed to encourage minority homeownership. And in so doing, he helped create the market for the risky subprime loans that he and Democrats now decry as not only greedy but "predatory."

Does a little history put it into perspective?

 

[beachblanket]

Sigh...

Here you go:

http://www.ibdeditorials.com/IBDArticles.aspx?id=306370789279709

Does a little history put it into perspective?

Excellent history lesson which you will never hear on CBS, MSNBC or CNN. They are too busy focusing on their hypoctritical sexist Palin hatefest.

 

[Island_Lauri]

Sigh...

Here you go:

http://www.ibdeditorials.com/IBDArticles.aspx?id=306370789279709

Does a little history put it into perspective?

"obsessed with multiculturalism"

"minority homeownership"


Really??? Multiculturalism and minority homeownership are to blame for the subprime mortgage crisis!!!

That certainly puts things into perspective....

 

[Island_Lauri]

Excellent history lesson which you will never hear on CBS, MSNBC or CNN. They are too busy focusing on their Palin hatefest.

History Lesson? Propaganda is more like it.


Please get a clue:

The Fuel That Fed The Subprime Meltdown

The Path to a Crisis
Was this the case of one group or one company falling asleep at the wheel? Is this the result of too little oversight, too much greed, or simply not enough understanding? As is often the case when financial markets go awry, the answer is likely "all the above"

Remember, the market we are watching today is a byproduct of the market of six years ago. Rewind back to late 2001, when fear of global terror attacks after Sept. 11 roiled an already-struggling economy, one that was just beginning to come out of the recession induced by the tech bubble of the late 1990s. (For related reading, see The Greatest Market Crashes and When Fear And Greed Take Over.)

In response, during 2001, the Federal Reserve began cutting rates dramatically, and the fed funds rate arrived at 1% in 2003, which in central banking parlance is essentially zero. The goal of a low federal funds rate is to expand the money supply and encourage borrowing, which should spur spending and investing. The idea that spending was "patriotic" was widely propagated and everyone - from the White House down to the local parent-teacher association - encouraged us to buy, buy, buy.

It worked, and the economy began to steadily expand in 2002.


http://www.investopedia.com/articles/07/subprime-overview.asp?viewall=1

 

[Laugh O. Grams]

"obsessed with multiculturalism"

"minority homeownership"


Really??? Multiculturalism and minority homeownership are to blame for the subprime mortgage crisis!!!

That certainly puts things into perspective....

Sickening...

 

[sahd2one]

History Lesson? Propaganda is more like it.


Please get a clue:

Oh please. Do a little history first before you start blaming one administration over another.

Companies would lend to whomever for whatever. Then it was hot potato time. Loans were bundled and sold off to investors in collateralized debt obligations (CDO), structured investment vehicles (SIV) and other arcane mechanizations Wall Street developed to shift the risk.

In the midst of the excitement, companies decided to keep some of the loans for themselves in the hopes of making real money. They started actually borrowing money to buy more of these debts.

With so much easy money flying around, investors turned to the ultimate "can't lose" investment -- real estate. That's how the real estate bubble began. But when the music stopped and property values started declining, all these bets started falling apart. And that's what we're dealing with now.

 

[LuvDuke]

"obsessed with multiculturalism"

"minority homeownership"


Really??? Multiculturalism and minority homeownership are to blame for the subprime mortgage crisis!!!

That certainly puts things into perspective....

You beat me to it.