I think the root cause was people taking on loans they couldn't afford to repay. This involves greed on the part of both the lender AND the borrower. What's really sad is that the 97% or so who ARE paying their mortgages as they agreed to are getting punished for the irresponsible actions of a few.
I love this article. Thank you for sharing your wonderful ideas!
I agree with you on exploring different types of cuisine. I'm actually experimenting with Indian cooking right now and a lot of their recipes are vegetarian, healthful, inexpensive, and most of all, very tasty.
...I will say that I never like the idea of massive, sweeping laws being put into effect with little or no time to analyse them. This bailout package is another case in point. "Do it by Thursday or we're screwed" is serious pressure, but not enough time to discuss the finer points of the proposal. I think Congress should forget about taking their vacation and worry about what's at stake here. This is the future of the country we're talking about.
The events of the last week have a familiar odor. A crisis that needs immediate action, fear mongering, and a demand for new sweeping powers for the executive branch of our goverment. The result being the citizens giving up their rights to the checks and balances laid out in our constitution. Smells like Iraq. Smells like the Patriot Act.
I heard on NPR that only 3% of mortgages are in foreclosure which is higher than normal but still such a small part of the whole market. It seems to me that if people bought houses they could afford rather than listening to government and banks telling them they would give them money which they really couldn't afford. On top of that people used any equity as their bank. Spending money is the patriotic thing to do. The government doesn't maintain a balanced budget so why should the people. The biggest issue to me is too much attention on consumerism and not enough of debt reduction or savings. Someone said yesterday that it is easy to spend other people's money (loans and credit?) but spending your own is much harder. The average American can't just print money when they run out. When will people realize that stuff is not the name of the game? When will people realize that buying a home larger than they can afford is not the way? Not only will you have to pay that mortgage but you will have to pay all the associated costs with a larger home like higher heating/cooling costs, higher taxes, not to mention the need to fill the empty house with new furniture.
The best way to save money is not to spend it on every fad that the fashion industry shoves at you. Develop your own style and forget what some stick on a runway looks like. I refuse to buy clothes that require dry cleaning or ironing (saving money and time and the environment). I dress for comfort not seasonal style. I don't buy new clothes unless I need them (not because some idiot on a television show tells me chartreuse is the new black). Fashion is a business. They want you to buy, buy, buy so that they get money, money, money. Then they change the game in a couple of months so they get more money, money, money, and you're left with some ugly clothes that you can't wear because they are "out of season." The fashion industry doesn't care about you. It's too bad women don't wake up to that fact. Take an honest look at yourself. Don't let the clothes wear you. Dress classic, dress smart, dress for comfort, and be yourself instead of trying to chase after the nonsense of "Sex and the City" (remember, those women don't have real jobs or real lives). It's not that hard to save money on clothes if you use common sense.
I don't have a lot of money to invest, but I have been buying shares into some mutual funds every time the market drops significantly. Today, I actually have about $100 profit, which is outperforming most of Wall Street. My 'plan' is to just try to break even, while acquiring more shares for the next few years until the economy recovers.
I started with ING Direct's Smallcap indexed, and Real Estate funds, because you can start them with $100 and an automatic investment plan. It seems to me that indexed smallcap funds are doing better in general than largecap or midcap funds.
Easy credit hides the fact that prices are rising faster than my salary. I experienced a rude awakening when I finally noticed that the same standard of living I have had for years was piling up unsustainable debt. That's the reason I turned to financial blogs like Wise Bread.
Medical expenses not withstanding, I do my best to pay as I go, but the debt is still there (although slowly shrinking), and I use that as my personal barometer for inflation. Inflation is much worse than than the government reports.
I judge the economy by counting the empty stores for rent that I pass while I'm driving. Another one bit the dust yesterday. Small businesses are an endangered species, and with the upheaval in the financial sector, unemployment has got to be pretty damn bad.
I don't need the government to tell me how the economy is, I live it every day.
The government should take over houses once they default, but allow the occupant to stay, as a renter, paying market-rate rent. "Create some jobs." LOL. Hey, we can do it now - we're going to own a lot of these bad mortgages.
So obvious, but I tell you I racked up this summer at a thrift store run by doctor's wives at my local medical college-which is tip #1-not all thrift stores are the same, you might find some ritzier cast-offs in different zip codes.
Anyway, I got oodles of cool winter clothing when it was broiling out for under a dollar. No one wanted to buy sweaters then, so they were giving them away. I'm talking $1 for a cashmere sweater.
I buy all my clothes from thrift stores. It takes work to hunt out the treasures but half my wardrobe is designer stuff and I've never spent more than $8 for any item. It's almost guaranteed at any time the most expensive thing I'm wearing is my shoes.
But... I think the people in charge (by which I mean the Fed and the gang) realize this. I think they realize that a less traumatic way of making housing affordable again (and solving this mess) is to increase people's income (nominal income that is).
If the government inherits the current accumulated debt, it can decide to make as little return (interest + principal) on it as it likes. It can then increase the money supply dramatically (creating $100B and giving it out, then creating up to $700B and giving that out too), pushing up inflation.
The result is on a nominal basis, eventually incomes will have a more acceptable ratio to the cost of housing - solving the dilemma you describe. The problem is inflation...but at this point that must seem like a better problem than a sudden collapse in the price of houses (and many other assets).
This is just food for thought... but if you're right, the government isn't necessarily crazy, they're just going about rectifying the situation another way. (I disagree with this approach as well, but from a bank's point of view, it would be more desirable).
Blame too much regulation in the form of Sarbanes-Oxley. The requirement that banks "mark to market" their mortgage backed securities directly precipitated the liquidity crisis. As the value of their balance sheets went down, their need for capital went up, and their ability to make new loans was cut off.
We are in the midst of a complex problem, created over years by politicians of both parties. There is no one "root cause"; rather we have reached a point of systemic failure.
after 8 years of Republicans in the White House, it's still the fault of the Democrats. Is there no accountability here at all? After Enron, couldn't Bush have looked into the practices of Merryl Lynch and other investment banks? I'm sure some fault lies with Dems, but to put this problem entirely at the feet of Clinton, and now the Democratic Congress (who have only been in power for the last 2 of those 8 years) seems like a blinkered way to look at the problem.
It's not people not paying their bills. It's perfectly ordinary for some fraction of borrowers to be unable to pay back the money they borrow--that's happened since the invention of money. (And it would be a non-issue if the house prices hadn't been driven up too high--the lenders could just foreclose, sell the house, and get their money back.)
It's also not greed. People are about as greedy now as they've always been.
If you want to back up to the root cause of housing prices being driven too high, there's a bunch of culprits. Lack of regulation and bad lending practices are a big part of it, as is the Fed panicking after the dotcom bubble and lowering interest rates too low (and keeping them there too long).
The exotic derivatives aren't exactly a cause, but they are a big part of what's making the real problem so damaging and so hard to fix. They magnify the damage, spread it around, and let it hide in corners where it can pop out at you after you think it's already been cleaned up.
I'm a Massage Therapist,
I work for a day spa that does not offer insurance and i need to find a desent
insurance company. Does anyone have some good recommendations for me and also the cost?
I think the root cause was people taking on loans they couldn't afford to repay. This involves greed on the part of both the lender AND the borrower. What's really sad is that the 97% or so who ARE paying their mortgages as they agreed to are getting punished for the irresponsible actions of a few.
Cheers,
Ken
Thanks for all the research on this one, Julie!
I love this article. Thank you for sharing your wonderful ideas!
I agree with you on exploring different types of cuisine. I'm actually experimenting with Indian cooking right now and a lot of their recipes are vegetarian, healthful, inexpensive, and most of all, very tasty.
...I will say that I never like the idea of massive, sweeping laws being put into effect with little or no time to analyse them. This bailout package is another case in point. "Do it by Thursday or we're screwed" is serious pressure, but not enough time to discuss the finer points of the proposal. I think Congress should forget about taking their vacation and worry about what's at stake here. This is the future of the country we're talking about.
The events of the last week have a familiar odor. A crisis that needs immediate action, fear mongering, and a demand for new sweeping powers for the executive branch of our goverment. The result being the citizens giving up their rights to the checks and balances laid out in our constitution. Smells like Iraq. Smells like the Patriot Act.
I heard on NPR that only 3% of mortgages are in foreclosure which is higher than normal but still such a small part of the whole market. It seems to me that if people bought houses they could afford rather than listening to government and banks telling them they would give them money which they really couldn't afford. On top of that people used any equity as their bank. Spending money is the patriotic thing to do. The government doesn't maintain a balanced budget so why should the people. The biggest issue to me is too much attention on consumerism and not enough of debt reduction or savings. Someone said yesterday that it is easy to spend other people's money (loans and credit?) but spending your own is much harder. The average American can't just print money when they run out. When will people realize that stuff is not the name of the game? When will people realize that buying a home larger than they can afford is not the way? Not only will you have to pay that mortgage but you will have to pay all the associated costs with a larger home like higher heating/cooling costs, higher taxes, not to mention the need to fill the empty house with new furniture.
Excellent ideas, Dianne especially. My idea:
Shop like the men. Buy classic stuff. Buy in multiples. Mix and match.
bank also the early the gain the allot of the kind the effect of the public
all banks took lot of some gain but public opion and to the anlayis to the factness
The best way to save money is not to spend it on every fad that the fashion industry shoves at you. Develop your own style and forget what some stick on a runway looks like. I refuse to buy clothes that require dry cleaning or ironing (saving money and time and the environment). I dress for comfort not seasonal style. I don't buy new clothes unless I need them (not because some idiot on a television show tells me chartreuse is the new black). Fashion is a business. They want you to buy, buy, buy so that they get money, money, money. Then they change the game in a couple of months so they get more money, money, money, and you're left with some ugly clothes that you can't wear because they are "out of season." The fashion industry doesn't care about you. It's too bad women don't wake up to that fact. Take an honest look at yourself. Don't let the clothes wear you. Dress classic, dress smart, dress for comfort, and be yourself instead of trying to chase after the nonsense of "Sex and the City" (remember, those women don't have real jobs or real lives). It's not that hard to save money on clothes if you use common sense.
farm loan waiver saying that the banks balance sheet would be affected otherwise.
The reimbursement for the Rs.71,000 crore
The `Indian Bank` Association IBA has made a strong use for an early division on payment of interest on reimbursement that Government would make for
very wonder full article so insert of the all of them to read very thankyou
I don't have a lot of money to invest, but I have been buying shares into some mutual funds every time the market drops significantly. Today, I actually have about $100 profit, which is outperforming most of Wall Street. My 'plan' is to just try to break even, while acquiring more shares for the next few years until the economy recovers.
I started with ING Direct's Smallcap indexed, and Real Estate funds, because you can start them with $100 and an automatic investment plan. It seems to me that indexed smallcap funds are doing better in general than largecap or midcap funds.
Easy credit hides the fact that prices are rising faster than my salary. I experienced a rude awakening when I finally noticed that the same standard of living I have had for years was piling up unsustainable debt. That's the reason I turned to financial blogs like Wise Bread.
Medical expenses not withstanding, I do my best to pay as I go, but the debt is still there (although slowly shrinking), and I use that as my personal barometer for inflation. Inflation is much worse than than the government reports.
I judge the economy by counting the empty stores for rent that I pass while I'm driving. Another one bit the dust yesterday. Small businesses are an endangered species, and with the upheaval in the financial sector, unemployment has got to be pretty damn bad.
I don't need the government to tell me how the economy is, I live it every day.
The government should take over houses once they default, but allow the occupant to stay, as a renter, paying market-rate rent. "Create some jobs." LOL. Hey, we can do it now - we're going to own a lot of these bad mortgages.
This is indeed a great program, and a wonderful way for Meijer to build goodwill.
So obvious, but I tell you I racked up this summer at a thrift store run by doctor's wives at my local medical college-which is tip #1-not all thrift stores are the same, you might find some ritzier cast-offs in different zip codes.
Anyway, I got oodles of cool winter clothing when it was broiling out for under a dollar. No one wanted to buy sweaters then, so they were giving them away. I'm talking $1 for a cashmere sweater.
I buy all my clothes from thrift stores. It takes work to hunt out the treasures but half my wardrobe is designer stuff and I've never spent more than $8 for any item. It's almost guaranteed at any time the most expensive thing I'm wearing is my shoes.
Great article, and in short, I agree.
But... I think the people in charge (by which I mean the Fed and the gang) realize this. I think they realize that a less traumatic way of making housing affordable again (and solving this mess) is to increase people's income (nominal income that is).
If the government inherits the current accumulated debt, it can decide to make as little return (interest + principal) on it as it likes. It can then increase the money supply dramatically (creating $100B and giving it out, then creating up to $700B and giving that out too), pushing up inflation.
The result is on a nominal basis, eventually incomes will have a more acceptable ratio to the cost of housing - solving the dilemma you describe. The problem is inflation...but at this point that must seem like a better problem than a sudden collapse in the price of houses (and many other assets).
This is just food for thought... but if you're right, the government isn't necessarily crazy, they're just going about rectifying the situation another way. (I disagree with this approach as well, but from a bank's point of view, it would be more desirable).
the greed of BANKS and RICH did this.... and now they will pay!
http://www.finance-maker.com/fanny-mae-lehman-brothers-aig-and-freddie-mac/
also had something similar to say. All i can say for the next 5 years HOLD ON!
Blame too much regulation in the form of Sarbanes-Oxley. The requirement that banks "mark to market" their mortgage backed securities directly precipitated the liquidity crisis. As the value of their balance sheets went down, their need for capital went up, and their ability to make new loans was cut off.
We are in the midst of a complex problem, created over years by politicians of both parties. There is no one "root cause"; rather we have reached a point of systemic failure.
after 8 years of Republicans in the White House, it's still the fault of the Democrats. Is there no accountability here at all? After Enron, couldn't Bush have looked into the practices of Merryl Lynch and other investment banks? I'm sure some fault lies with Dems, but to put this problem entirely at the feet of Clinton, and now the Democratic Congress (who have only been in power for the last 2 of those 8 years) seems like a blinkered way to look at the problem.
It's not people not paying their bills. It's perfectly ordinary for some fraction of borrowers to be unable to pay back the money they borrow--that's happened since the invention of money. (And it would be a non-issue if the house prices hadn't been driven up too high--the lenders could just foreclose, sell the house, and get their money back.)
It's also not greed. People are about as greedy now as they've always been.
If you want to back up to the root cause of housing prices being driven too high, there's a bunch of culprits. Lack of regulation and bad lending practices are a big part of it, as is the Fed panicking after the dotcom bubble and lowering interest rates too low (and keeping them there too long).
The exotic derivatives aren't exactly a cause, but they are a big part of what's making the real problem so damaging and so hard to fix. They magnify the damage, spread it around, and let it hide in corners where it can pop out at you after you think it's already been cleaned up.
I'm a Massage Therapist,
I work for a day spa that does not offer insurance and i need to find a desent
insurance company. Does anyone have some good recommendations for me and also the cost?
Thankyou Donna Norgel, CMT