Financial Meltdown

[sunshyne]

I'm living ON the tracks and waiting for the train.

[Biff]

I just want to say that I love Plungie's avatar.

You don't remember the "Year Without a Santa Claus(1974)"? It's the Heat Miser. I tried to get Queenie to be the "Snow Miser" but you know royalty....

I know it. We went to school with a guy named Glenn Schmidt that had flaming red hair and we'd sing it to him all the time.

[hotzester]

Sorry dude, I don't know why I thought you were from GR. I will take pics and post them. I have been here since 1990, and have yet to find anywhere else where the haves/have nots are so obviously defined. It gives true meaning to the phrase," the other side of the tracks."

You must've sensed my West Michigan lineage. lol

My deal is (and this is something I touched on in another thread, for those of you keeping score), there ARE haves and have nots. No one can deny that. But if you're in the have nots, and you want to be one of the haves...go do it. Go work another job, live in a s-hole of an apartment to keep your costs down while you're saving.

My wife and I started out living with her parents for a year, then in an apartment for three, then we spent two years in a fixer-upper of a house that we literally put blood, sweat and tears into while we renovated it, then sold it, and now live in the neighborhood we want to live in. It's not impossible. Hell if I can do it, ANYONE can figure it out. lol

[fetusfacedwindbag]

Sorry dude, I don't know why I thought you were from GR. I will take pics and post them. I have been here since 1990, and have yet to find anywhere else where the haves/have nots are so obviously defined. It gives true meaning to the phrase," the other side of the tracks."

You must've sensed my West Michigan lineage. lol

My deal is (and this is something I touched on in another thread, for those of you keeping score), there ARE haves and have nots. No one can deny that. But if you're in the have nots, and you want to be one of the haves...go do it. Go work another job, live in a s-hole of an apartment to keep your costs down while you're saving.

My wife and I started out living with her parents for a year, then in an apartment for three, then we spent two years in a fixer-upper of a house that we literally put blood, sweat and tears into while we renovated it, then sold it, and now live in the neighborhood we want to live in. It's not impossible. Hell if I can do it, ANYONE can figure it out. lol

The only problem I have with this statement is still the "ignorant". You are obviously an intelligent guy. Whether you've had higher education or not, you are knowledgeable and wordly. There are many people in the nation that don't know that they don't know certain things. They heard, "buy for less than you can rent", and they ran with that. Predatory lenders fed off of those people. Yes, they are VERY responsible for their actions, but when you signed up for your mortgage, did you read and understand the entire 400 page document? (YOU probably did, but you get my drift I bet) Most people just sign the dotted line and trust that people are honest and wouldn't decieve them when allowing them to sign up for a large, tricky, in depth contract. There were a lot of lenders that sold ARMs like a mortgage that COULD possibly go down but PROBABLY wouldn't. At the time, the Fed was cutting rates at every turn, and it looked (to the average non economic minded Joe) that rates would (maybe) never go down because the housing market was so wonderful. I truly believe that this is a double edged sword that you can't pin on one side or the other, and I don't know how anyone could EVER say that it was ONLY the idiots' who signed up for the things faults.

PS - ARMs were also developed as a short term financial instrument for banks to grab a quick buck while allowing a consumer to either A. transition into homeownership or B. own a home/ property long enough to resell it. It wasn't only developed to get people who normally couldn't afford a house into one.

OK I gotta go. Can't wait to see what you guys say. I wrote this quickly and didn't proofread, so don't judge my grammar or misspoken concepts if there are any.... I'm sure there are.

[lurkingfinger]

I bought a house on an ARM loan that was fixed for five years. I'm in my fourth year and hoping to sell it for a profit after turning it into a fairly nice home...unlike the dump it was when I bought it. Major renovations were done. Now the market is bad though, so maybe I'll just break even or at least just make enough profit to cover the costs of buying again. Have to do something before the adjustable rate kicks in though. I can see how many got screwed. That bank was willing to give me double what I asked for with no credit at all. Luckily I didn't take it.

[redsox]

There is enough blame for everybody.

[hotzester]

Actually, no - I didn't read every letter of the closing documents. My attorney, however, represented me in the legal aspects of the sales/purchases, and he did his job, all the while not knowing that we were thinking "Holy balls he looks like Tom Brokaw."

ARMs are good, if you know how to use them. Don't know how to use them? Well then you haven't done your research. For our first house, the mortgage lender actually required that we take a little test thing. They sent us a nice little package of information, and then they called us and quizzed us. If we hadn't done our "homework", they would've insisted upon more education as clients. Fortunately, we're both nerds and we studied the hell out of it.

Point being, yes, there are predatory lenders. But it is up to you, as the borrower, to do your own research (ignorant or not, you owe it to yourself to make sure you have some clue what you are doing). You've gotta go into things with a healthy dose of skepticism. Look at banks the same way you (should) look at casinos and insurance companies - if YOU are the one who is going to "cash out", how do they pay for their elaborate corporate headquarters?

If you can't figure out how a bank/lender can afford such a posh pad to run their business out of, then you don't understand how the industry works, and you obviously have more reading to do.

Also, this still isn't society's fault.

[cuppie]

I wouldn't dare say that ARMs are ever good. ARMs are what got this country into the mess that we're in. People hopped on board with ARMs because they bought into the whole, "everybody deserves a house" and "creative financing" took shape in the form of the ARM. Then all of the sudden the mortgage rate goes from $400 to over $1500 a month and people got screwed.

It's still not societies fault though. Sure people want to get a house because that's what they're led to believe they need to achieve the American dream. I would say the only purchase you make that is influenced by society is your car. You could own a $400,000 house and people wouldn't think anything of it if you drive a Pinto. If you drive a Lexus (or Cadillac or BMW or Mercedes) and have an apartment people think you've got a ton of money.

[hotzester]

No, ARMs do have their place. They're good if rates are high and on the brink of declining. They're good if your business is real estate investing, and you're going to flip the property in a reasonably quick timeframe. There are circumstances when an ARM can benefit you, but like anything, you've got to be smart about it and take not just a risk, but a CALCULATED risk.

If you carry a 30 year ARM for more than a few years, you're going to get screwed. No ifs, ands or buts.

[daredevil1]

Don't even get me started on student loans. Between my boyfriend and I our student loans cost about 1.5x our rent.

The bf likes to tie up his savings in the stock market, mine are in a high-interest savings account. While he'll earn more in the long run (maybe), his funds won't be readily available if he needed them immediately.

At first I thought that said "the bf likes to tie me up." Oops.

[redsox]

I figured Id just post this here, since it is another comment on financial talk.

According to the court filings Mark Cuban was told before he received the information, that he was going to receive insider knowledge, so if that was true...

Yes, he would have to just sit there and wait for the anouncement to be made, regardless if he was going to lose some money, thats the chance he took by agreeing to be told it.

Although since, he is saying he will be cleared of wrongdoing, he must have another story, although selling your entire position, as largest single shareholder, hours before negative news, he must have a whopper of a story.

[sunshyne]

What do you guys think about the auto manufacturer "bail out"?

Do you think The US is headed down the same slippery slope as Iceland, just slipping slower?

Have any of you heard of Gerald Celente, and his predictions for the US of what will happen by 2012?

[hotzester]

I disagree with the bailout of any private institution by the government. Government isn't capable of running anything efficiently, first of all. Secondly, it's not government's responsibility to ensure the success of any company or group of companies.

The only thing I've heard about Gerald Celente was the mention of it on the show the other day.