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There is Something Scary Going on In This Country


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#1 katsmom

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Posted 02 May 2008 - 08:20 AM

I was reading about the rate of foreclosures in this country yesterday. I have a friend who is an economist, and she said we've been in a recession for a while- it just didn't happen. The price of gas is flirting with $4 a gallon. The price of heating oil isn't going down, either. So many jobs in America have been shipped overseas to places in Asia and to Mexico, that the only jobs that are left are in the services sector. What the...
I went to the pizzeria last night to get my boys a medium pizza. The price on the wall says $8.00. The girl at the cash register says,"11.70, please. Our prices have gone up. "What, 50% ?" I say.
Another reason for me to be scared- my husband is a salesman. When the economy tanks, so does his income. Does this mean he is going to become more abusive as his income declines? I think we all know the answer to that. How many other women and children are going to be abused or even killed because of the economy and a president who obviously doesn't have a clue?

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#2 habitual dieter

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Posted 02 May 2008 - 08:26 AM

Hi katsmom.

The same is happening here in the UK.

Petrol has gone uo to over 5 a gallon, which is over $10.

Ther price of food has risen drastically and more and more people are losing their homes through foreclosure...

Seems to be the same the world over.

Joanne

#3 GirlyGirl

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Posted 02 May 2008 - 08:38 AM

It is scary, and I don't know what's going to happen...

I know that I plan to sell my house (and my vacation house) asap --due to our divorce--and severely downsize my life so I have a lot of savings in the bank. I plan to rent a small place for the next four years using interest on my savings to offset this. I'm paying down all my debts to nothing after selling my properties and tightening my belt!

At some point in the future I may decide to buy property and build, or buy a small home again. But for now I'm being really careful with my money as we all should. It sure is scary though.

GG

#4 AuslanGirl

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Posted 02 May 2008 - 09:32 AM

Australia is going through a nasty time as well!

Fuel prices are skyrocketing and people are NOT happy about it. Being able to buy a home of your own...well, that's now a pipe dream bse the interest rates keep going up, and people are having their homes taken away from them or having to sell them really cheaply so as to get out of the high prices they are paying when the rates go up.

Not only that, food is sky high as well.

At the moment, it's like the only people who are doing just fine are the rich fat cats-esp the politicians!!

With 5 kids to feed (as well as our unofficial 6th child), we barely manage to put food on the table...it's always a struggle, and bills are hard to deal with also. I can't work bse of my back, and not many people want to hire a Deaf lady who hasn't worked for 16 years or so. But, I know there are people out there who are struggling worse than we are, so I guess we are blessed to have a roof over our heads that we won't lose and is quite cheap rent for this day and age.

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#5 Merry-go-round

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Posted 02 May 2008 - 09:54 AM

At the moment, it's like the only people who are doing just fine are the rich fat cats-esp the politicians!!


Thing is, you know the economy is REALLY in trouble when the politicians vote themselves a pay CUT. Can you believe it, the Florida Legislature is planning on doing so... Tells me America is in a world of trouble, that does...

#6 katsmom

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Posted 02 May 2008 - 10:46 AM

Wow. I just read on MSN that Jose Canseco's $2.5 million house is in foreclosure, also. And that guy made MILLIONS in his career.

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#7 hysteria_625

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Posted 02 May 2008 - 10:46 AM

the politicians vote themselves a pay CUT. Can you believe it, the Florida Legislature is planning on doing so... Tells me America is in a world of trouble, that does...


Holy-Moley :huh:

wow, I've been keeping on top of this situation for over 2 years now b/c Troll's work comes from *almost* 100% new home constuction. I had not heard this yet - but I also know FL/CA were the 2 states hit hardest by foreclosure/risky mortgages.

Would not have believed it looking around our neighborhood though - about 3 months ago, almost 1 out of every 3 houses in our neighborhood was either a) in foreclosure B) abandoned or c) up for auction! I will say, in these last 3 months, someone has started doing something w/ most of these homes, b/c people are living in them/taking care of them again. There are still a few abandoned ones though & they are a blight on our neighborhood (tall grass, no home maintainance, risk of squatters/crime/meth labs/etc...)

We live near Washington DC - which is suppose to be "recession proof" - hhmmmph!
Maybe recession proof, but NOT depression proof.

Sorry - I am a HUGE pessimist when it comes to the economy.

The rich have decimated the middle class

I heard on the news this am, most of the 100,000+ job losses being reported for April are coming from manufacturing (the BACKBONE of any economy) and retail. How are we suppose to come out of this downturn when there are no job paying a living wage? I think the figure is over 65% of jobs now are in the service sector - well, if no one can afford to go shopping all the time at (your favorite store here) they lose profit & start laying off - and where are those folks going to go for jobs?

I'm in a similar situation - I deal with payroll/tax issues. I provide a service to my company and my company relies on consumers to be able to purchase the product. If they are no longer able to turn a profit with the product, job losses insue...kind of scary!

Also, some people are thinking - 'well, we haven't had another "Black Monday"', so everything must be OK...don't think b/c the stock market continues to sky rocket, everything is happy roses - the stock market has detached from the REAL economy, mainly b/c of pension plans (like your 401K). Every day, millions are being poured into the stock market from our pay checks. Granted, those in dire straits are starting to pull back and not contribute - so IMVHO, the losses on Wall Street will be gradual as opposed to a 1000+ loss on the Dow one afternoon. It can't happen anymore, anyway, b/c of all the 'safety nets' they put in place.

Not that this isn't a global issue, as pointed out by Auslan & HD, but again, IMVHO, until we find the next 'big' thing (alternative energy???) we're kind of in a heap o' doo-doo.

#8 GotTheTeeShirt

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Posted 02 May 2008 - 11:02 AM

I know this isn't what anyone wants to hear right now, but then again...ignoring the facts will lead to repeating the problem again and again.

So here I go <ahem, stepping up on soapbox>

The foreclosure crisis didn't happen in a vacuum and it wasn't greedy/corrupt politicians who "did it to us". It was caused by poor impulse control, irresponsible financial control and lack of maturity. When you make X amount per year, have nearly maxxed your credit cards and have almost nothing in your savings and investment accounts and no money for a downpayment on a home, you have NO business deciding that you can afford a home with a mortgage payment that is more than one half of your monthly income!

Sadly, that's the majority of America these days. We've been raised with credit cards and "buy now, pay later" mentality and we all think that owning a home is a sign of having "made it" as adults. Oh and here's a good one for ya. How many times have you heard that a owning your own home is a "smart investment"??? NOT!!!

You don't "own" your home for 30 years! You simply are renting it from your mortgage lender AND agreeing to pay for the taxes, water, sewer, upkeep, insurance and maintenance on it. A house with a mortgage in is NOT an investment! It is an expense. So put it in the correct category when you do your finances.

So what do you do when you really really want a house, but have lousy credit and don't earn enough to pay for a straight 15-30 year fixed rate mortgage? You do what millions of americans did in the last 10 years. You shop around till you find a mortgage lender willing to give you a creative mortgage and willing to ignore your bad FICO score.

Only thing is...those creative mortgage's come with huge drawbacks. The low low interest rate only lasts for a couple years and when the time is up you have to make a big fat lump sum payment and then start paying back the mortgage at a much higher interest rate ....AND you can no longer pay just the interest...you HAVE to pay some of the principle too.

And yes, I will agree with everyone else that it was irresponsible on the part of the mortgage brokers to offer these loans when they knew darned well that a lot of people were going to be in serious trouble when the time came to bump up the payments. BUT...but but but...blaming it ALL on the brokers is a lot like a kid saying to his mom "But Jimmy SAID it would be ok if we went over to the neighbor's house and played with the stuff in his garage. And I believed him Mom!"

It is the personal responsibility of every adult to handle their finances, arm themselves with knowledge, to reasonably weigh their options and to make mature and informed choices for themselves and their family.

So what started the whole landslide wasn't George Bush. He wasn't the mortgage broker handing out mortgages like candy to any kid who lined up and lied on their application about their credit and ability to pay. Yep, he started a war that is costing us billions. He honestly felt that it was a necessary step in order to keep this country safe from men who have made it their personal goal to wipe all infidel countries off the face of the earth. Whether or not he chose the right country to start that war with is open to debate...we will never know that because we will never know what the outcome would have been had he chosen not to go to Iraq. Hindsight isn't 20/20 in this case...it's just a guess. Unless someone has a crystal ball that is? LOL

Oil prices are outrageously high in this country compared to what we are used to paying. Somehow we've managed to ignore what the rest of the world pays for gas and just happily trotted around, buying bigger and bigger gas hogs and SUV's and assuming that our gas prices would remain low. Funny thing though. Gas prices started rising several years ago. Anyone with a little common sense saw it coming and they certainly had plenty of time to go buy more fuel efficient cars.

I mean really...does ANYONE actually "need" to drive a Hummer or an Escalade? Nope!

So here's the reality. We've behaved irresponsibly with our finances and immaturely with our "needs vs. wants". We're greedy. We want it all and we don't want to think about how we're going to pay for it. (This paintbrush does NOT apply to everyone...if you've been mature and responsible and live within your budget...it does NOT apply to you!)

The time to take action to safeguard your future is now. You can see the trends and you know it's going to get worse before it gets better. So grab a pencil and paper and figure out how best to cut costs, live within a reasonable budget, etc.

Who was it here who said that they are selling their home and putting that money in savings and then paying rent out of the interest earned? Bravo!!! It's smart, it's sensible and it's mature. And yep, that person will likely "lose money" on the sale price of the house. In other words, they won't get as much equity out of it as they would have 2-3 years ago. But that's life....prices never remain stagnant...they either rise or fall...you can count on that.

So find a way to pay down credit cards...decide that you don't "have" to have a big screen HDTV, learn to make cheap casseroles, etc. It's not fun, it's not easy but it is what has to be done in order to weather bad times. Our parents did it in the 70's AND in the 40's. Our grandparents did it in the 20's and 30's. Our great great grandparents did it during and after the civil war.

Ohhhhh, almost forgot. About the bad times economy. That's one of those historic things yanno. The economy never ever just continues to rise and get better and better. It ALWAYS has downward periods of recession. That's how it resets itself. Expect it and plan for it...not just this time around, but in another 10-15 years and another 10-15 years after that.


<stepping off of soapbox now>

Carry on,
Tee

#9 Mimzy

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Posted 02 May 2008 - 11:13 AM

Wow, Tee!

Well said.

Thank you for being a voice of truth and reason!

We may not like to hear it....but you told truth.

Knowing and acting on truth can save our lives.

I'm grateful for your wisdom!!!

Pixidust
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#10 Merry-go-round

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Posted 02 May 2008 - 11:55 AM

Hi Tee -

I'm not going to disagree with you, the whole mortgage industry has done quite a bit of its share to screw up our economy. Reverse mortgages, lending to folks who have questionable credit. Also, credit card companies and automobile salesmen that lend to people with questionable credit... Sure, folks who want stuff they can't afford are a major factor, but I think the folks doing the lending should have known better - it's their business to know better. I guess they're crying, too though, since some of them are going belly up or being bought out, through their financial errors. And that's just making the downward spiral worse...

There are other things too, though, not just greedy bankers and keep-up-with-the-joneses borrowers.

A several trillion dollar debt can't really be good for any economy...

Oil prices topping $115 a barrel and closing in on (or hitting) $4 a gallon don't help either.

Sending huge chunks of our jobs overseas would be another factor. We're getting our steel from Japan, our sweaters from Mexico, wonky kill-you-if-you-take-them pharmaceutical ingredients from China. A global economy is all very well and good, but it doesn't seem to help the folks at home.

And those same corporations are figuring out marvelous loopholes to help them keep from paying their taxes to America, too. And those greedy politicians who "didn't do this to us"? Are helping them keep their loopholes...

We should start seeing our "economic stimulus rebate checks" in the mail next week... (ummm.... where exactly is that money coming from? Oh, yeah, our grand kids) Watcha gonna do with that? I'd love to stick it into savings, but I doubt that's where it'll end up. I think the Saudis will get mine... at the gas pump.




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