| # | Author | Message |
51
| MPierce
Tue 12/2/2008 3:59p | >> People may not be broke, but they are now in position where they have to live within their means. A large swath of this country hasn't done that for 2 decades. <<
That's the problem with reality setting in. That half a million dollar home the mortgage company said you could afford doesn't seem like such a good idea now. |
52
| Sport Goofy
Tue 12/2/2008 3:59p | << They are scared because the media is telling them that they will be broke. Which for a very small percentage of the population will be absolutely true. But for most people it is not. >>
2 years ago, there were commentators saying that subprime mortgages and real estate in general was such a small percentage of the overall economy that it couldn't possibly have a major impact. Guess they were wrong. Whenever someone tells me that something is "too small to have an impact," I usually expect it to have an impact. |
53
| Sport Goofy
Tue 12/2/2008 4:01p | << That half a million dollar home the mortgage company said you could afford doesn't seem like such a good idea now. >>
Especially if you bought it for a half a million dollars and it's only worth $300,000 now. |
54
| RoadTrip
Tue 12/2/2008 4:06p | <<2 years ago, there were commentators saying that subprime mortgages and real estate in general was such a small percentage of the overall economy that it couldn't possibly have a major impact. Guess they were wrong. Whenever someone tells me that something is "too small to have an impact," I usually expect it to have an impact.>>
Again, it really shouldn't have. The subprimes are a very large percentage of the homes presently on the market, but a very small percentage of most lending portfolios. The reason they've been eating it is they are forced to write down the value behind of ALL their loans, even the ones where people have always paid on time and always will.
|
55
| A Happy Haunt
Tue 12/2/2008 4:57p | I was reading in The Sunday paper most American Households have $10,000 in credit card debt!!! OMG!! |
56
| MPierce
Tue 12/2/2008 5:05p | >> I was reading in The Sunday paper most American Households have $10,000 in credit card debt!!! OMG!! <<
I have an aquaitance that had $70,000 of credit card debt. What do you think his chances of climbing out of that hole were. |
57
| A Happy Haunt
Tue 12/2/2008 5:08p | I have NONE!!! I have a Disney Visa that gives me 6months no interest on a Disney Vaca!! WHAT AM I DOING AT HOME!! |
58
| MPierce
Tue 12/2/2008 5:21p | ^^^ Same here on both accounts, and I was just thinking the same thing after Spirit told me the count on January bookings. |
59
| A Happy Haunt
Tue 12/2/2008 5:33p | I don't want to go in January..To cold for Kali River :( |
60
| fkurucz
Tue 12/2/2008 7:22p | <<People ARE NOT BROKE.>>
Wanna bet?
Millions (several millions) of households have negative equity in their houses (in many cases in the 6 figure range). Millions more have been foreclosed.
The government is spending trillions to prop up the economy.
Wages have not been keeping pace with inflation.
We have a negative savings rate.
The average 401(k) balance is less than $30,000 (good luck retiring on that).
People aren't just scared. They have suddenly realized that they have been living wildly beyond their means, and are now realizing that all that money they borrowed to live that way will have to be paid back (with interest too).
Sure, some people are doing OK. You yourself admitted that you would never use a HELOC to buy anything. Unfortunately, tens of millions decided otherwise. Did you ever stop to wonder how so many households with 5 figure incomes could afford his and hers luxury cars?
The epitome of all this was a commercial for some lender (I forget who, maybe it was countrywide) where a guy named Stanley tells you about his wonderful house, cars, vacations, club memberships, etc. He pauses and says: I'm up to my eyeballs in debt. Somebody help me".
And of course the answer is to refi the house and roll all the existing consumer debt into it.
Millions upon millions were doing this. But no more. |
