Sponsor Message:
Non Aviation Forum
My Starred Topics | Profile | New Topic | Forum Index | Help | Search 
Americans’ Wealth Dropped 40 Percent  
User currently offlineKen777 From United States of America, joined Mar 2004, 8047 posts, RR: 8
Posted (1 year 10 months 2 weeks 3 days 5 hours ago) and read 2085 times:

From the WaPo:

Quote:

The net worth of the American family has fallen to its lowest level in two decades, according to government data released Monday, driven by a more than 40 percent drop in their stakes in their homes.

The Federal Reserve’s detailed survey of consumer finances showed families’ median wealth plunged from $126,400 in 2007 to $77,300 in 2010 — a 39 percent decline. That put them on par with median wealth in 1992
.
http://www.washingtonpost.com/busine...6/11/gJQAlIsCVV_story.html?hpid=z1

Another comment in the article:

Quote:

underscore the depth of the wounds of the Great Recession and how far many families remain from healing

Anyone looking for miracle cures today or in the near future will be disappointed.

46 replies: All unread, showing first 25:
 
User currently offlineMaverick623 From United States of America, joined Nov 2006, 5445 posts, RR: 6
Reply 1, posted (1 year 10 months 2 weeks 3 days 5 hours ago) and read 2062 times:

You simply cannot trust this article, as it does not contain any useful data, an draws erroneous conclusions.

For example, the Post says that the drop in house prices is mostly responsible, which just doesn't pass the smell test. How many families owned homes in 2007, compared to 2010?

Or, better yet, when a house is foreclosed on, the debt is wiped out. If the home is currently worth, say, $70K, and you owe $180K, and it gets foreclosed: guess what? You're wealth has just been increased because the net gain is $110K.



"PHX is Phoenix, PDX is the other city" -777Way
User currently offlineArrow From Canada, joined Jun 2002, 2675 posts, RR: 2
Reply 2, posted (1 year 10 months 2 weeks 3 days 3 hours ago) and read 1994 times:
Support Airliners.net - become a First Class Member!

Quoting Maverick623 (Reply 1):
You simply cannot trust this article, as it does not contain any useful data, an draws erroneous conclusions.

All it does is outline a report from the Federal Reserve. Unless it has reporting errors in it (and maybe it does, I'm not going to go looking for them) what is the issue? And when you say it draws "erroneous conclusions" are you referring to the article's conclusions, or the report's conclusions.

Quoting Maverick623 (Reply 1):
For example, the Post says that the drop in house prices is mostly responsible, which just doesn't pass the smell test. How many families owned homes in 2007, compared to 2010?

Go back and read the article. All it does is document the horrific crash in real estate values and calculate how that impacted net worth of "middle class" Americans -- a significant number of whom own homes. The difference in home ownership between 2007 and 2010 wouldn't likely affect the conclusion. To put it more bluntly -- the value of a home has traditionally been the biggest chunk of any family's net worth. If that value crashes -- as it it did -- then the impact on that family's net worth will be catastrophic -- like mayb e as high as 40%.

Quoting Maverick623 (Reply 1):
Or, better yet, when a house is foreclosed on, the debt is wiped out. If the home is currently worth, say, $70K, and you owe $180K, and it gets foreclosed: guess what? You're wealth has just been increased because the net gain is $110K.

Very funny. The fact that whoever this poor sucker is likely started out the ownership position with a piece of equity (which is the first piece that disappears in a declining market) means he/she lost his/her shirt. You might want to consider this cat's ability to ever finance another home on any terms, once he's been through a foreclosure.

I'm not sure what you point was in all that.

[Edited 2012-06-11 14:45:08]


Never let the facts get in the way of a good story.
User currently offlinecasinterest From United States of America, joined Feb 2005, 4158 posts, RR: 2
Reply 3, posted (1 year 10 months 2 weeks 3 days 3 hours ago) and read 1987 times:

Quoting Maverick623 (Reply 1):
For example, the Post says that the drop in house prices is mostly responsible, which just doesn't pass the smell test. How many families owned homes in 2007, compared to 2010?

Or, better yet, when a house is foreclosed on, the debt is wiped out. If the home is currently worth, say, $70K, and you owe $180K, and it gets foreclosed: guess what? You're wealth has just been increased because the net gain is $110K

the smell test isn't in play here. The issue surrounds net worth, and between 2007 and 2010 there was a massive crash in net worth. Ask all those with underwater mortgages.

However Net Worth does not play into a total picture of the economy, as many folks have homes that they never used as collateral to go on spending sprees in 2003 to 2007, so the drop in net worth means nothing.




Quoting Ken777 (Thread starter):
Anyone looking for miracle cures today or in the near future will be disappointed.

This may or may not be true, but the net worth doc doesn't paint a fully accurate measure as Maverick623 pointed out.

Currently here in Raleigh, NC, builders are going nuts, and the housing market is moving again. Mostly because all the 20-30 somethings that never owned are finally buying because interest rates have made it cheaper to buy than rent.

I think the housing market is coming around. Not as fast and robust as some would like, but it is at least movement.



Older than I just was ,and younger than I will soo be.
User currently offlineKen777 From United States of America, joined Mar 2004, 8047 posts, RR: 8
Reply 4, posted (1 year 10 months 2 weeks 3 days 3 hours ago) and read 1969 times:

Quoting Maverick623 (Reply 1):
You simply cannot trust this article

I don't think you have to be a rocket scientist to believe this article.

Quoting Maverick623 (Reply 1):
You simply cannot trust this article
http://federalreserve.gov/pubs/bulletin/default.htm

That's the link to the FED.

Quoting Maverick623 (Reply 1):
as it does not contain any useful data,

This is the opening paragraph from that link:

Quote:

The Federal Reserve Board's Survey of Consumer Finances for 2010 provides insights into changes in family income and net worth since the 2007 survey. The survey shows that, over the 2007–10 period, the median value of real (inflation-adjusted) family income before taxes fell 7.7 percent, while mean income fell more sharply, an 11.1 percent decline. Both median and mean net worth decreased even more dramatically than income over this period, though the relative movements in the median and the mean are reversed; the median fell 38.8 percent, and the mean fell 14.7 percent. This article reviews these and other changes in the financial condition of U.S. families, including developments in assets, liabilities, and debt payments.

And there is the PDF link if you really want more.

Quoting Maverick623 (Reply 1):
which just doesn't pass the smell test.

It does. My house is paid off and, at my age, I look at the home in terms of generating cash if I down size. With the value of the house lowered that asset is worth less in my retirement. That is what stinks.

Quoting Maverick623 (Reply 1):
the debt is wiped out

But is it wiped out? If the lender believes you can pay on the loss they can go after you.

Quoting Maverick623 (Reply 1):
You're wealth has just been increased because the net gain is $110K.

And guess what - if they bank doesn't go after that $110K they will issue a 1099 for the full $110K and the IRS will take over collection efforts.


User currently offlinedfwrevolution From United States of America, joined Jan 2010, 915 posts, RR: 51
Reply 5, posted (1 year 10 months 2 weeks 3 days ago) and read 1883 times:

Quoting Ken777 (Reply 4):
It does. My house is paid off and, at my age, I look at the home in terms of generating cash if I down size. With the value of the house lowered that asset is worth less in my retirement. That is what stinks.

It would be great if there were assets that continuously appreciate in value without any risk. That's not life.

Quoting Ken777 (Reply 4):
And guess what - if they bank doesn't go after that $110K they will issue a 1099 for the full $110K and the IRS will take over collection efforts.

The IRS does not perform collection. They tax the forgiven debt as normal income, which for the average American households is a rate of ~15%. In this scenario, that would be a tax settlement of $16.5K. And if the debt was discharged in bankruptcy, it is not taxable at all.


User currently offlineprebennorholm From Denmark, joined Mar 2000, 6297 posts, RR: 54
Reply 6, posted (1 year 10 months 2 weeks 2 days 22 hours ago) and read 1832 times:

Quoting Ken777 (Thread starter):
...wealth plunged from $126,400 in 2007 to $77,300 in 2010 — a 39 percent decline.

Fact is that the difference - $50k more in 2007 - was just vapor money mostly due to vastly overpriced homes. Nobody should hope for such a bubble to come back any time soon.

Sure if you sold your house in 2007, and moved into a tent, then you could have cashed in the $50k. (But the poor guy, who bought your house might have defaulted long time ago).

Vapor money isn't the same as wealth. Only with some luck can an individual convert his vapor money into real wealth, while some other individual(s) suffer identical loss.

A significant part of the 2007-vapor-money was also pension saving invested in overpriced stocks.

Some of it was just plain faulty data. Remember that in 2007 one certain Mr. Madoff was in fact considered solvent!!!



Always keep your number of landings equal to your number of take-offs, Preben Norholm
User currently offlineKen777 From United States of America, joined Mar 2004, 8047 posts, RR: 8
Reply 7, posted (1 year 10 months 2 weeks 2 days 22 hours ago) and read 1806 times:

Quoting casinterest (Reply 3):
However Net Worth does not play into a total picture of the economy, as many folks have homes that they never used as collateral to go on spending sprees in 2003 to 2007, so the drop in net worth means nothing.

I consider the impact on Net Worth on our house has is very important for long term retirement protection.

Reductions in the valuation of homes isn't new. In the mid-80s home values in oil patch were cut in half for far too many. Cheap oil and the attack on the oil industry during the Reagan Years rally hurt prices.

Deflation then and deflation again during the Bush/Cheney Years.

Quoting dfwrevolution (Reply 5):
It would be great if there were assets that continuously appreciate in value without any risk. That's not life.

Especially during GOP Administrations. For Oil Patch you are talking about the Reagan and Bush II Years.

So, basically over the past third of a century we have had deflation of home values of every other GOP Administration.

Quoting dfwrevolution (Reply 5):
The IRS does not perform collection.

They do perform collection on the income noted in a 1099.

While some may file bankruptcy they are then in a pit for 7 years. The banks can continue to go after them as the last GOP Administration changed the Bk Laws to make the banks happy. That means the banks can keep going after you, even if it is at a reduced rate.

Quoting prebennorholm (Reply 6):
Fact is that the difference - $50k more in 2007 - was just vapor money mostly due to vastly overpriced homes.

It depends on where you bought and the price you paid. Then toss in the ability of the home owner to pay that mortgage.

Not all markets were ripped off by the games the financial sector played during Bush II. And some of those markets are still reasonably stable.

I do see significant future risk, however, with the next GOP Administration who starts cutting spending. That will mean significant job cuts and people who, all of a sudden, cannot pay a reasonable mortgage payment. Payments that previously had been both affordable & responsible.

Quoting prebennorholm (Reply 6):
Vapor money isn't the same as wealth.

The value of traditional real-estate has been pretty solid for many - even if Bush-Cheney failed to maintain a normal market.

We are in our third home (that we "owned") and we experienced reasonable growth in value in all three. But we bought homes we could pay for. Fortunately I wasn't dependent on any intelligent leadership from Bush/Cheney to make my mortgage payments.


User currently offlinePPVRA From Brazil, joined Nov 2004, 8876 posts, RR: 40
Reply 8, posted (1 year 10 months 2 weeks 2 days 21 hours ago) and read 1788 times:

It was all phony wealth to begin with, that's why it's called a bubble. Comparing to 2007 without looking further back at what happened is just picking at data to make a big splash in the news.

As for 1992, the timing is correct - by 1992 Greenspan had already driven the Fed's fund rate extremely (too) low:




"If goods do not cross borders, soldiers will" - Frederic Bastiat
User currently offlineRevelation From United States of America, joined Feb 2005, 11962 posts, RR: 25
Reply 9, posted (1 year 10 months 2 weeks 2 days 21 hours ago) and read 1784 times:

Quoting Arrow (Reply 2):
To put it more bluntly -- the value of a home has traditionally been the biggest chunk of any family's net worth. If that value crashes -- as it it did -- then the impact on that family's net worth will be catastrophic -- like mayb e as high as 40%.

If you start the clock in 2007 and stop it in 2010 then one can see that, but to do so is unrealistic.

Quoting prebennorholm (Reply 6):
Fact is that the difference - $50k more in 2007 - was just vapor money mostly due to vastly overpriced homes. Nobody should hope for such a bubble to come back any time soon.

Indeed, the chosen time line was the before and the after of the bubble.

Quoting Ken777 (Reply 7):
I consider the impact on Net Worth on our house has is very important for long term retirement protection.

Then I hope you are considering more than a three year window.

Also one does have to wonder about the long term investment value of a house these days.

For your house to be worth more later in life, the younger people had better be doing well enough to buy it off you at the kind of premium you want.

Personally, in these days of greed, dreadful parenting, dreadful education standards and rampant outsourcing, I have a hard time seeing how that will happen.

But there's not much I can do about it...



Inspiration, move me brightly!
User currently offlinezhiao From United States of America, joined Jan 2011, 380 posts, RR: 0
Reply 10, posted (1 year 10 months 2 weeks 2 days 20 hours ago) and read 1777 times:
Support Airliners.net - become a First Class Member!

What does retirement have to do with it? That's only pertinent to people who planned to downsize and pocket the rest. This can still be achieved because all housing prices are lower.

User currently offlinecasinterest From United States of America, joined Feb 2005, 4158 posts, RR: 2
Reply 11, posted (1 year 10 months 2 weeks 2 days 10 hours ago) and read 1674 times:

Quoting Ken777 (Reply 7):
I consider the impact on Net Worth on our house has is very important for long term retirement protection.

Reductions in the valuation of homes isn't new. In the mid-80s home values in oil patch were cut in half for far too many. Cheap oil and the attack on the oil industry during the Reagan Years rally hurt prices.

Deflation then and deflation again during the Bush/Cheney Years

But your key point is " protection" .
The house is where you are choosing to live, and if you have to sell it or reverse mortgage it for protection, then the net worth affects you. Especially if you are basing it off of the highly inflated 2007 numbers.

For some kids just out of college in the last 5 years, they have no net worth tied up in housing yet. Their introduction into the housing market will help bouy and support the housing market going forward. Will homes appreciate like they did in the past? Probably not. but they still have land, and they still take labor and materials to build and repair. The housing market went through a heavy readjustment, and it was a painful one from 2007 through now. Some areas are starting to recover, others are continuing to suffer. however with the interest rates as low as they are, a lot of the younger renters are starting to move heavily into home/condo purchase.



Older than I just was ,and younger than I will soo be.
User currently offlinewindy95 From United States of America, joined Dec 2008, 2690 posts, RR: 8
Reply 12, posted (1 year 10 months 2 weeks 2 days 10 hours ago) and read 1667 times:

Quoting casinterest (Reply 3):
This may or may not be true, but the net worth doc doesn't paint a fully accurate measure as Maverick623 pointed out.

Currently here in Raleigh, NC, builders are going nuts, and the housing market is moving again. Mostly because all the 20-30 somethings that never owned are finally buying because interest rates have made it cheaper to buy than rent.

I think the housing market is coming around. Not as fast and robust as some would like, but it is at least movement

You also have people who do have the spare cash or purcasing power buying second homes here in Florida. We also have investor's buying homes and renting them out now which is helping find the bottom here. Rental properties are doing very well right now since people are afraid to take the plunge.

Quoting prebennorholm (Reply 6):
Fact is that the difference - $50k more in 2007 - was just vapor money mostly due to vastly overpriced homes. Nobody should hope for such a bubble to come back any time soon.

Correct

Quoting PPVRA (Reply 8):
It was all phony wealth to begin with, that's why it's called a bubble.

Correct

Quoting casinterest (Reply 11):

For some kids just out of college in the last 5 years, they have no net worth tied up in housing yet. Their introduction into the housing market will help bouy and support the housing market going forward

Yes it will

Quoting casinterest (Reply 11):
Will homes appreciate like they did in the past? Probably not.

I hope not. A nice steady pace this time.



OMG-Obama Must Go
User currently offlineRevelation From United States of America, joined Feb 2005, 11962 posts, RR: 25
Reply 13, posted (1 year 10 months 2 weeks 2 days 8 hours ago) and read 1631 times:

Quoting zhiao (Reply 10):
What does retirement have to do with it? That's only pertinent to people who planned to downsize and pocket the rest.

And that set of people is pretty large. In times past, it was most of the middle class.

Quoting zhiao (Reply 10):
This can still be achieved because all housing prices are lower.

Not if you lost your home in the GFC. Yes, there are lots of reasons why that happened, but indeed it did happen to many.

Quoting casinterest (Reply 11):
For some kids just out of college in the last 5 years, they have no net worth tied up in housing yet. Their introduction into the housing market will help bouy and support the housing market going forward.

Just heard a report on the way in that Massachusetts housing sales are up for the 15th month in a row, FWIW.

I just closed on my re-fi yesterday. The incredibly low interest rates on 15 year notes made it feasible for me to convert from a 30 year note.



Inspiration, move me brightly!
User currently offlineEricR From United States of America, joined Jul 2010, 1812 posts, RR: 1
Reply 14, posted (1 year 10 months 2 weeks 2 days 7 hours ago) and read 1587 times:

Quoting Ken777 (Reply 7):
So, basically over the past third of a century we have had deflation of home values of every other GOP Administration.


Please explain why/how you believe the crash in home values is related to the GOP administration.

Before you get into details, let me say that the crash in home values was attributed to loose lending practices by banks AND the banks wager on home values steadily increasing at a rate of about 6% per year indefinitely combined with low default projections on high risk mortgages. The crash had nothing to do with any policy or bill passed by the Bush administration.

Also, please note that the Glass Steagall Act (the act that separated commercial banks from investment activities) was repealed under the Clinton administration in 1999. Had this act not been repealed, banks would not have been allowed to perform risky investment activities that contributed to the crash such as betting on home mortgages & betting on derivatives. The risky bets and loose lending practices ultimately resulted in the financial crash and subsequent bailout of banks such as BofA, JP Morgan, Citigroup, etc.

If you are going to blame this on the GOP, then you have to blame the dot-com bust in 2000 on Clinton, and JP Morgan's recent $5 billion trading loss on Obama.

If you are forming your opinions based on news reports from liberal media outlets such as CNN and MSNBC, then you are being mislead. Unfortunately, CNN and MSNBC are just as biased to the left as FOX is to the right.


User currently offlinezhiao From United States of America, joined Jan 2011, 380 posts, RR: 0
Reply 15, posted (1 year 10 months 2 weeks 2 days 4 hours ago) and read 1527 times:
Support Airliners.net - become a First Class Member!

Quoting Revelation (Reply 13):
And that set of people is pretty large. In times past, it was most of the middle class.

But if we were to classify such as "income" it would be very small, even in times past. Only about 4% of the housing stock is sold on avg. 70% of such are people who move to bigger and normally more expensive homes. Do the math, say the avg home value is $200,000: *.04 *.30= $2400 per HH. And of this $2400, at most only half is kept as cash I would say.


User currently offlineMir From United States of America, joined Jan 2004, 21129 posts, RR: 56
Reply 16, posted (1 year 10 months 2 weeks 2 days 4 hours ago) and read 1519 times:

Quoting EricR (Reply 14):
Please explain why/how you believe the crash in home values is related to the GOP administration.

The Bush Administration's desire to get as many people as they could into their own home, and policies they enacted to help make it happen, are well-documented. They're not the only party at fault, but they certainly share the blame.

-Mir



7 billion, one nation, imagination...it's a beautiful day
User currently offlinemt99 From United States of America, joined May 1999, 6546 posts, RR: 6
Reply 17, posted (1 year 10 months 2 weeks 2 days 4 hours ago) and read 1512 times:
Support Airliners.net - become a First Class Member!

Quoting PPVRA (Reply 8):
It was all phony wealth to begin with, that's why it's called a bubble.

And Banks lent against that phony wealth - right? What does that say about the banks?



Step into my office, baby
User currently offlineEricR From United States of America, joined Jul 2010, 1812 posts, RR: 1
Reply 18, posted (1 year 10 months 2 weeks 2 days 3 hours ago) and read 1493 times:

Quoting Mir (Reply 16):
The Bush Administration's desire to get as many people as they could into their own home, and policies they enacted to help make it happen, are well-documented. They're not the only party at fault, but they certainly share the blame.


There is nothing wrong with an administration's desire to get as many people in a home as possible. This desire transcends all political parties, it is not associated with one party or the other. Even the Obama administration wants more people to own homes, hence the $7,000 one time buyer credit and all of their plans to keep homeowners in their homes.

The manner in which the banks allowed for this practice, and most importantly - their risky bets on high risk mortgages and crazy assumption that home prices would increase indefinitely at a 6% rate - was the primary driver.

Interestingly enough, the Clinton administration was the administration that started "The National Homeownership Strategy: Partners in the American Dream”. This plan set the foundation that would ultimately set in place the trend to get every family into a home. Below is the link from HUD.

http://www.huduser.org/publications/txt/hdbrf2.txt

You could arguably blame the Bush Administration for continuing this plan, but any administration would have continued this plan because the domino affect had yet to take place. No one could have envisioned the amount of risk the banks would eventually take on. Not only did the banks lend to higher risk borrowers, but they also double downed by assuming they would never default and home prices would always continue to rise.

Let's also not forget the public's role in exacerbating the issue. Everyone wanted to make money and people bought second and third homes in hopes that the appreciation would never stop. When the prices began to drop, these people just walked away from their rental properties, thus accelerating the issue. You did not need a very big income to get a 2nd and 3rd mortgage in those days, so in essence, the average person could get a second home.

It is fascinating to see how so many people in the financial industry were so foolish to make these type of assumptions / decisions. These are basic fundamentals that are taught in undergrad finance, yet everyone ignored them. It is a great case study in human behavior.


User currently offlineKen777 From United States of America, joined Mar 2004, 8047 posts, RR: 8
Reply 19, posted (1 year 10 months 2 weeks 2 days 3 hours ago) and read 1487 times:

Quoting Revelation (Reply 9):
If you start the clock in 2007 and stop it in 2010 then one can see that, but to do so is unrealistic.

That is the timing because the study is done every 3 years. Next one will be 2010 - 2012, regardless of the economic events in the middle.

Quoting Revelation (Reply 9):
Indeed, the chosen time line was the before and the after of the bubble.

The timeline was not chosen, it was a regular 3 year study/.

Quoting Revelation (Reply 9):
Then I hope you are considering more than a three year window.

1985 - Today, and counting.

Quoting Revelation (Reply 9):
Also one does have to wonder about the long term investment value of a house these days.

Some would prefer to be renters their entire life. Not my cup of tea because with a paid off house I know my monthly cost is insurance + taxes + maintenance.

I also know that if you buy to sell you will be better off. That means paying attention to the location, design, location, space, and location.

Did I mention Location is important?

Quoting Revelation (Reply 9):
For your house to be worth more later in life, the younger people had better be doing well enough to buy it off you at the kind of premium you want

Look around. Kids graduated from university this year in various fields from Finance and Accounting to Engineering, Medicine and Law. Harvard and Stanford will not close down because of a lack of qualified students. Neither will Oklahoma, Texas and LSU.

Quoting Revelation (Reply 9):
I have a hard time seeing how that will happen.

Fortunately we bought in an excellent location. Teachers and plumbers won't be buying the house because the location has pushed the price out of their reach. The neighbors are pretty successful in a wide range of fields.

Quoting zhiao (Reply 10):

What does retirement have to do with it? That's only pertinent to people who planned to downsize and pocket the rest.

Depending on how you use the rooms I own a 3 to 5 bedroom house. I simply don't need that much room any more, nor do I need a half an acre, even in a prime location.

That means I can down size and have additional funds for retirement. I considered that carefully when we bought the house in 1985.

But you don't have to wait for retirement to use the profits on a house. Funds for college for kids is one valid use. Moving to a larger house is another.

Basically it is location and buy to sell.

Quoting casinterest (Reply 11):
But your key point is " protection" .

My house has delivered far more protection than I would have had in renting.

Quoting casinterest (Reply 11):
Especially if you are basing it off of the highly inflated 2007 numbers.

I base it off of 1985 values.

Quoting casinterest (Reply 11):
For some kids just out of college in the last 5 years, they have no net worth tied up in housing yet.

Those kids should be laughing as home values are down and interest rates a WAY down. Clearly a time to drive an old, cheap car and put the money into a down payment.

The only dark cloud I see on the horizon will be a change in the tax laws by the conservatives that kills the interest and proper tax deduction. Look for Willard & Bain to deliver that shaft.

Quoting EricR (Reply 14):
Please explain why/how you believe the crash in home values is related to the GOP administration.

Both happened during strong Republican Administrations. First was oil patch and the second was national.]

Not difficult to understand.

Quoting windy95 (Reply 12):
You also have people who do have the spare cash or purcasing power buying second homes here in Florida.

There you go. The Willard Way. Bain & Buddies will make big money, just like Willard talked about.

Quoting windy95 (Reply 12):
Rental properties are doing very well right now since people are afraid to take the plunge.

And a lot of people will not be able to buy now, or in the future, because their job was destroyed in The Great Recession.

They may get a job that pays less, but their hope for another home is in the pits.

Quoting EricR (Reply 14):
The crash had nothing to do with any policy or bill passed by the Bush administration.

The lack of effective oversight of the markets is one factor for the crash. Bush let his god buddies go wild and Obama was left to work on cleaning up the mess.

Maybe we can add in the Guns & Butter & Cake of the Bush Years. Going to war on the credit card. Stuff like that. Personally I believe that the lack of oversight & enforcement of regulations was the major factor.

Quoting EricR (Reply 14):
Also, please note that the Glass Steagall Act (the act that separated commercial banks from investment activities) was repealed under the Clinton administration in 1999.

The driving force for that repeal was that arrogant guy with a Texas PhD. Bald SOB who was simply wrong. I'll think of his name later - been spending years trying to forget him!

Quoting EricR (Reply 14):
If you are forming your opinions based on news reports from liberal media outlets such as CNN and MSNBC, then you are being mislead.

MSNBC does look left, but they also have some intelligent people.

Dylan Ratigan, former Global Managing Editor for Corporate Finance at Bloomberg, presents some intelligent comments.

Rachel Maddow has a sense of humor, and a brain. I bought her book after seeing it on Steve Schmidt's bookshelf. The gal went to Stanford and Oxford, where she earned a PhD.

Chris Mathews? Just turned him on and Mike Steele & Reagan's son are on. A balanced conversation that would be above Hannity's head.

CNN also has balance - more than MSNBC. There are talking healed from both the right and the left and they are able to have pretty open discussions.

I can tune into any of the above MSNBC shows and be comfortable, just like CNN. I can't take 5 minutes of FOX, or Rush. Haven't tuned into the, in years.


User currently offlinecasinterest From United States of America, joined Feb 2005, 4158 posts, RR: 2
Reply 20, posted (1 year 10 months 2 weeks 2 days 3 hours ago) and read 1480 times:

Quoting windy95 (Reply 12):
I hope not. A nice steady pace this time.

I expect some minor bumps of wild exhuberance. Some homes are way undervalued.

Quoting Revelation (Reply 13):
Just heard a report on the way in that Massachusetts housing sales are up for the 15th month in a row, FWIW.

I just closed on my re-fi yesterday. The incredibly low interest rates on 15 year notes made it feasible for me to convert from a 30 year note.

I have heard of a lot of folks doing that. The rates on a 30 year are lower than I ever imagined, and it is helping me make a move up .

Quoting Ken777 (Reply 19):
Look around. Kids graduated from university this year in various fields from Finance and Accounting to Engineering, Medicine and Law. Harvard and Stanford will not close down because of a lack of qualified students. Neither will Oklahoma, Texas and LSU.

Of course they did, but you also need Joe the plumber and Larry the Cable guy purchasing as well.
Some of those homes in certain areas got far outside of what blue collar workers could afford.

Quoting Ken777 (Reply 19):
That means I can down size and have additional funds for retirement. I considered that carefully when we bought the house in 1985.

But you don't have to wait for retirement to use the profits on a house. Funds for college for kids is one valid use. Moving to a larger house is another.

I am doing the latter.

Quoting Ken777 (Reply 19):
My house has delivered far more protection than I would have had in renting.

I agree with this, Renting is money tossed away. my Mortgage on a 4 bedroom home will be less than a rent quote I got on a 2 bedroom apartment.

Quoting Ken777 (Reply 19):
I base it off of 1985 values.

Then you are doing fine.

Quoting Ken777 (Reply 19):
Those kids should be laughing as home values are down and interest rates a WAY down. Clearly a time to drive an old, cheap car and put the money into a down payment.

The only dark cloud I see on the horizon will be a change in the tax laws by the conservatives that kills the interest and proper tax deduction. Look for Willard & Bain to deliver that shaft.

They won't deliver a cut on this one. this will be a political hot potatoe that is fun to toss around, but no one will bite without a clear plan forward.



Older than I just was ,and younger than I will soo be.
User currently offlineEricR From United States of America, joined Jul 2010, 1812 posts, RR: 1
Reply 21, posted (1 year 10 months 2 weeks 2 days 3 hours ago) and read 1469 times:

Quoting Ken777 (Reply 19):
Texas PhD. Bald SOB who was simply wrong


Tell us how you truly feel about him

Quoting Ken777 (Reply 19):
Quoting EricR (Reply 14):
The crash had nothing to do with any policy or bill passed by the Bush administration.

The lack of effective oversight of the markets is one factor for the crash. Bush let his god buddies go wild and Obama was left to work on cleaning up the mess.


Well, as I mentioned in the reply just prior to your post (you may not have read it in time), the Clinton adminstration layed the foundation of one home for every family. There is a link to the HUD document.

The oversight you say in occurred in the Bush years would have happened under any administration because there had been no indication of issues related to risky bank practices until it was too late.

Administrations (Rep or Dem) do not have that kind of insight until it is often too late hence the reason why I used the dot-com bust and JP Morgan's recent trading loss as examples of other financial issues that occurred under democratic administrations.

Nevertheless, laying blame soly on the GOP is simply not accurate. There were many factors including that caused this calamity including:
1. The risky business practices of financial institutions
2. Repeal of Glass-Steagall
3. Greed of the average person buying multiple houses to make more money and then walking away from these properties when prices collapsed
4. Clinton administration for laying the foundation of one home for every family
5. Continuation of this policy by the Bush Administration

Quoting Ken777 (Reply 19):
MSNBC does look left, but they also have some intelligent people.

Dylan Ratigan, former Global Managing Editor for Corporate Finance at Bloomberg, presents some intelligent comments.

Rachel Maddow has a sense of humor, and a brain. I bought her book after seeing it on Steve Schmidt's bookshelf. The gal went to Stanford and Oxford, where she earned a PhD.

Chris Mathews? Just turned him on and Mike Steele & Reagan's son are on. A balanced conversation that would be above Hannity's head.

I'll agree on Dylan - however - the rest can go the way of the dinosaur.


User currently offlineRevelation From United States of America, joined Feb 2005, 11962 posts, RR: 25
Reply 22, posted (1 year 10 months 2 weeks 2 days 2 hours ago) and read 1456 times:

Quoting Ken777 (Reply 19):
Not my cup of tea because with a paid off house I know my monthly cost is insurance + taxes + maintenance.

Indeed, but as you say, some prefer mobility and to let others worry about the maintenance.

Quoting Ken777 (Reply 19):
Look around. Kids graduated from university this year in various fields from Finance and Accounting to Engineering, Medicine and Law. Harvard and Stanford will not close down because of a lack of qualified students. Neither will Oklahoma, Texas and LSU.

If that's who will be buying in your neighborhood, then you are all set, but I don't think that's the rule, it's the exception.

Quoting casinterest (Reply 20):
Quoting Revelation (Reply 13):
I just closed on my re-fi yesterday. The incredibly low interest rates on 15 year notes made it feasible for me to convert from a 30 year note.

I have heard of a lot of folks doing that. The rates on a 30 year are lower than I ever imagined, and it is helping me make a move up .

I'm joining Ken's club - the 15 year mark is about when I can collect social security, presuming it is still there, presuming they haven't jacked up the retirement age to 88.

Quoting EricR (Reply 21):
Greed of the average person buying multiple houses to make more money and then walking away from these properties when prices collapsed

I think that too is the exception rather than the rule.

Surely a lot of that was going on, but clearly not a lot compared to all the folks who simply could not afford their homes (and the rest of their lifestyles) yet were still given mortgages by the banks.



Inspiration, move me brightly!
User currently offlinewindy95 From United States of America, joined Dec 2008, 2690 posts, RR: 8
Reply 23, posted (1 year 10 months 2 weeks 2 days 2 hours ago) and read 1442 times:

Quoting Ken777 (Reply 19):
There you go. The Willard Way. Bain & Buddies will make big money, just like Willard talked about.

No I am talking about middle class people like me who is looking for a second home to eventually retire to. And many of my fellow middle class friends are buying homes and turning them into rental properties in the hopes of being the next Willard or Donald. But nice try though.



OMG-Obama Must Go
User currently offlineMaverick623 From United States of America, joined Nov 2006, 5445 posts, RR: 6
Reply 24, posted (1 year 10 months 2 weeks 2 days 1 hour ago) and read 1438 times:

Quoting EricR (Reply 18):
No one could have envisioned the amount of risk the banks would eventually take on.

  

They didn't envision it because they were paid not to.

Quoting casinterest (Reply 20):
Renting is money tossed away.

The only difference between renting and mortgaging is who is responsible for the maintenance work and property taxes.



"PHX is Phoenix, PDX is the other city" -777Way
25 PPVRA : It says FANNIE MAE and FREDDIE MAC.
26 mt99 : That does not take any responsibility of what happened away from the banks..
27 PPVRA : The banks SHARE responsibility with the government for what happened. With that said, the banks are still merely pawns of the "economic planners" in
28 windy95 : Or from the people who signed for the loan's.
29 Post contains images Ken777 : There have been various programs over the years. The 235 program was the big one when I was getting a starter home. And, of course, the GI Bill has d
30 mt99 : Is that why they get bailed out? GWB's government.. right? Or the people who misrepresented the loans that they were signing.
31 windy95 : Or the Realtor's who worked with the lender's, or the Speculator's trying to make it big and of course the borrower who was trying to buy more than t
32 Revelation : IMHO the bulk of the blame goes to the bankers. They are the ones who have the job of protecting their institutions. Surely the government has given
33 mt99 : Shh - don't say those things. Everyone know that the as soon as one President takes over EVERYTHING that happens from that moment on is their complet
34 Post contains images casinterest : I rarely bother with a spell checker Not planning to run for office either. Haven't had to yet {Knock on Wood} true enough, but the biggest issue I s
35 Revelation : As the old joke goes, if you owe the bank $50k you have a problem, if you owe the bank $500k the bank has a problem.
36 bhill : Brooksley Born Excoriates Alan Greenspan: “You Failed” By: David Dayen Wednesday April 7, 2010 8:44 am Tweet232 At today’s Financial Crisis Inqu
37 PPVRA : The main economic planners are the Fed, which under Greenspan goes back to 1987. So every government that re-appointed him and every congress that re
38 seb146 : One issue that was brought up this afternoon on "liberal" talk radio is: FOX "news" is spouting off how this happened over the past three years when,
39 DeltaMD90 : This out of the blue race baiting is totally uncalled for, detracts from the topic at hand, and adds nothing to the conversation! Just as bad as call
40 Mir : Except when they fail to do anything about the prevalence of too-good-to-be-true credit because it would conflict with their own narrative about the
41 Post contains images Ken777 : That is where the game was. Promises of inflation to cover the part you couldn't afford so you could refinance to a low fixed interest rate and live
42 DeltaMD90 : His comment has no relevance to the discussion... it's just flamebait. There are plenty of valid points to argue without pulling the race card (since
43 ModernArt : Conveniently forgetting that the Democrats regained control of both the House and Senate after the autumn 2006 elections.
44 Post contains links Ken777 : James Carville has an interesting approach to evaluating the loss of 40% of wealth - this time he considers what would be happening if it was the rich
45 EricR : I tend to disagree with this point of view. The rich cannot make significant gains in wealth without a thriving middle class. Therefore, when I hear
46 zhiao : Actually, the rich saw their incomes fall more than the middle class during the recession, because of huge capital losses.
Top Of Page
Forum Index

This topic is archived and can not be replied to any more.

Printer friendly format

Similar topics:More similar topics...
Over 40 Dead In Fire Storm In Israel posted Thu Dec 2 2010 12:52:19 by avi
Super Bowl 40 Ref Apologies! posted Sat Aug 7 2010 14:58:06 by AirframeAS
Mel Gibson Dropped By His Talent Agency posted Sat Jul 10 2010 02:26:01 by Aaron747
"Redistribution Of Wealth" posted Thu Mar 25 2010 16:39:07 by fr8mech
The Most Famous Road Crossing - 40 Years On posted Sat Aug 8 2009 10:10:46 by GDB
Malaysian Pupil Forced To Smoke 40 Cigarettes posted Thu Aug 6 2009 07:11:31 by RussianJet
58 Percent Of GOP Not Sure/Doubt Obama Born In US posted Tue Aug 4 2009 12:27:32 by OzGlobal
Pew Poll: 6 Percent Of Scientists Are Republican posted Fri Jul 10 2009 08:31:23 by Yellowstone
CNN 20 To 40 People Taken Hostage posted Fri Apr 3 2009 10:13:38 by WarRI1
Saudis Order 40 Lashes For Elderly Woman posted Mon Mar 9 2009 06:08:06 by Dtwclipper