Renting FTW !

 

WIN!!!!!!!!!!!!

 

Lending standards went out the window. It was adjustable rate and stated income loans that fueled this mess. Check out the reset schedule.



Sub prime is just getting started and Alt-A is going to take a big hit. Just because someone has good credit does not mean they will continue to make good decisions.

You have to figure it is going to take 6 months to foreclose and get the properties to the banks, making the time to buy in mid to late 2012.

This chart doesn’t even count for the massive amounts of home equity lines that were taken out. It is going to be a mess. As long as you didn’t buy a home in the last 3-4 years or don’t work in the housing/financing industry, you should be ok. Be willing to take pay cuts to keep your job, and do what you can to manage your other debts. (Credit card debt is going to be the next big set of defaults, along with student loan debt)

Just be smart, save and don’t over spend, and you should be able to ride out the recession unscathed.

My Guess (not to be taken as advice):
Housing drops another 40% in the Bay Area, peak to through. To the would be haters, if you don’t believe me, please bust out some data and I will bring mine. I do have several sources to back up the opinion; I’m just too lazy to get it unchallenged.

 

I've been in the UK for the past month or so, and it didn't it hit me how weak the dollar is until everything I bought out here was twice as expensive when converted to dollars. Its insane, the numerical values of prices are the same here, but the actual value is twice as expensive. A coke over here is about 65p, but in dollars that close to $1.40. People over here talk about going on vacations in the US b/c its so cheap to buy merchandise.

On an unrelated topic... I GET TO COME HOME TODAY!!! 11.5 hr flight for me

 

Wall St was definitely part of the problem, but you need to dig a little deeper to find the root cause - the feds messing with the housing market and the money supply. I don't think anyone has laid it out quite as nicely as Ron Paul has:

"Mr. Chairman, our economy finds itself in a precarious state. Oil prices are rising, gold is nearing all-time highs, and the dollar is nearing all-time lows. The root of this crisis, as with past financial and economic crises, results from federal government intervention into the economy, not to anything endemic to the market, nor to the actions of market participants.

The collapse of the housing market has served as a catalyst for the economy's latest bust. For years the federal government has made it one of its prime aims to encourage homeownership among people who otherwise would not be able to afford homes. Various federal mortgage programs through the FHA, Fannie Mae, and Freddie Mac have distorted the normal workings of the housing market.

The implicit government backing of Fannie Mae and Freddie Mac provides investors an incentive to provide funds to Fannie and Freddie that otherwise would have been put to use in other sectors of the economy. It was this flood of investor capital that helped to fuel the housing bubble.

Legislation such as the Zero Downpayment Act and the misnamed American Dream Downpayment Act made it possible for people who could not afford down payments on houses to receive assistance from the federal government, or even to pay no down payment at all, courtesy of the taxpayers. The requirement of a down payment has always helped to ascertain the ability of a buyer to pay off a mortgage. It requires the buyer to show hard work and thrift, the ability to delay present consumption in order to make a larger acquisition in the future.

When this requirement is minimized or eliminated, you introduce a new class of homebuyers, people who are unable to budget and save for the purchase of a home, or who should wait for a few years until they have saved enough to purchase a home. Federal policies have encouraged investors, lenders, and brokers to cater to these people, so it is no surprise that market actors came up with ever more sophisticated means of bringing these people into the real estate market.

Finally, the Federal Reserve's loose monetary policy and lowering of interest rates were a major spur to the housing boom. Low interest rates influence marginal buyers, those who are sitting on the fence, and encourage them to take on a mortgage that they otherwise would not. Even when interest rates are raised, no one expects them to stay high for long, as there is always pressure from politicians and investors to keep rates low, as no one wants the cheap credit to end.

Thinking that interest rates will cycle from low to higher, back to low, lenders begin to offer adjustable rate mortgages, 2/28's, 3/27's, and other sophisticated mortgages that may trap many unsavvy buyers. Buyers go short, lenders go long, and many people have been burned as a result.

It is time that the federal government get out of the housing business. Through our interventionist legislation we have caused the boom and bust, and any attempts at reform that fail to address the causes of our current problem will only sow the seeds for the next bubble."

http://www.lewrockwell.com/paul/paul421.html

And to the OP, I couldn't agree more. Don't we have enough problems to worry about right here at home? Who are we to try and solve the world's problems. I think everyone agrees that the politicians are a bunch of greedy, short-sighted, debt-loving morons. What the American public doesn't want to face up to is the fact that we have a representative form of government. Make sense of those last two sentences and you will go a long way towards understanding why America is in the trouble its in at the moment.

 

Very interesting graph and comments.

A tidbit I got from a broker friend on Monday ...

"Starting June 1 new Credit Score requirements roll out. If your score is below 740 - that is not a typo - you can expect to pay more to get a loan."

Personally I'm continuing on the same path as a few others here; save, save, save and hope to be ready to jump into the housing market when the timing is right. I also checked my credit score this week ... numbers are good

 

I truly hope the economy will get better. My finance and I are getting married in the spring next year.

 

Honestly, what do you expect from a Capitalist society? Do you honestly think the people who have the power to change things will do whats best, or what makes them and their buddies the most money?

All they have to do is ensure the public is poorly educated, and too busy arguing with each other and fighting wars against "terrorists."

 

it will, it always does.

 

sweet ill be looking about then!

 

these gas prices are really starting to suck a phatty cack though

 

The Islamists hated us before and after Iraq bottom line no matter what we do they will still always hate us. They hate our Britney, Paris, our culture as a whole. 9/11 was a unprovoked attack. after the attack i was all for the war and still am but the problem is how its been managed. Our government officials must be held accountable for their actions and face consequences like anyone else who ****s up at a job.

 

would you suggest that we become a socialist nation? which is better in your opinion?

 

I am by no means educated on any of these topics. I find everything you guys say interesting enough to roll around in my head and make me wonder. Putting together ideas of my own on how my life is personally being influenced.
All I can say is that my wrx is costing me pretty ****ing close to $50 a tank filling up off empty. I have already started putting together my first of 2 old steel frame road bicycles. It is scary to me that at one point I had taken into account a full years worth of pay checks to make sure I could afford my car and still live comfortably yet now I have nightmares of selling my car.
I 100% agree that something needs to be done about our economy. Getting extra money on our taxes isn't going to help. The public (IE: me) needs to be educated and then they (IE: us) need to take action to correct it.

 

lets look at Canada and how well their Universal health care coverage is doing. from what i hear it aint all that great alot of people here think we should have universal healthcare but at what cost. canadians have to get on a waiting list to have a surgury done, most have to wait up to like 6 months. everyone has to pay a higher tax rate(not sure how much).
i know alot of us love handouts including myself but handouts arent always good for us.