Is economic collapse possible? Sure, you can't predict the future based on the past, but every single economy on record has collapsed eventually, no matter how strong it had been in the past (Egypt, Greece, Rome, etc.). No matter how well a society is planned, eventually either an unforeseen disaster will strike, or reputable governors will be replaced by corrupt officials that are willing to destabilize the system for personal gain.
If all else fails, you can count on some idiot coming along to screw things up.
Take for example Hotel Rwanda. Yes, it's dramatized in the movie, but it is largely a true story. In the worst possible of circumstances, one guy did the best he could.
I read his biography. To be fair, he pulled through because he was incredibly connected. No doubt many people just as brave and determined as Mr. Rusesabagina lost their lives.
I think hope is all well and good. However, I also think that it needs to be mixed with some pessimism. That's how you make the best plans.
. . . corrupt officials that are willing to destabilize the system for personal gain.
I'm not naming names, but this is one of my main reasons for being so worried right now.
Even if there is a real reason to be worried, worrying won't help. Just do everything within your power to make things the best they can be, and whatever happens happens.
Even if there is a real reason to be worried, worrying won't help. Just do everything within your power to make things the best they can be, and whatever happens happens.
Oh, for the love of . . .
Hey, they're the ones that came up with the idea of achievements. Now do you care?
Hey, they're the ones that came up with the idea of achievements.Nowdo you care?
If you worry about things that are beyond your control, then you will always be depressed whether or not the economy is. There's no point in being upset about the moon orbiting the earth. There's nothing you can ever do about it.
I meant "worry" in a sort of rhetorical sense. The people in charge are currently an active area of concern to me, but I don't get depressed about it. Also, the fact that they are in charge is not at all like the moon orbiting the earth. There are things that we can do. I'm engaged in more than one avenue of tryng to institute change in the roster of people in charge, hopefully for the better.
Jeez. On the one hand you have no mercy for anyone who has ever made a bad decision and on the other you seem to think that there is nothing that can be done and that no one is in control.
Jeez. On the one hand you have no mercy for anyone who has ever made a bad decision and on the other you seem to think that there is nothing that can be done and that no one is in control.
Some things you can control, and some things you can't. The things you can control, you must grab onto with all your might, and force them to go your way. Everything else, just let it be, accept it, and move on. Exactly which things are under your control, and to what degree, is a matter that is debatable.
Even if there is a real reason to be worried, worrying won't help.
It's possible to be in a bad situation and not know what to do. Knowing that a solution is possible, but you don't know what it is could be reason to worry. It's also possible that your best plan of action could have low chances of success, or known collateral damage (cancer chemotherapy for example).
I think it is valid to worry when the outcome is unsure.
Do you have enough cash to buy your cheap house? Credit is going to be harder to come by. Where are you keeping that cash? In your mattress? What happens if your bank fails?
If FDIC fails in addition to my bank, then the nation's already fucked and I'll just leave, making it all a moot point.
From the article:
"Regulators are bracing for well over 100 bank failures in the next 12 to 24 months, with concentrations in Rust Belt states like Michigan and Ohio, and the states that are suffering severe housing-market problems like California, Florida, and Georgia," said Jaret Seiberg, Washington policy analyst for financial-services firm Stanford Group.
If many banks fail, the FDIC might just fail as well. This administration hasn't had a good record of agency preparedness . . .
My credit is good enough to weather all but a total economic collapse. I'm confident that I can get a mortgage.
That's nice for you. Others might not be so fortunate. Those others, whether you want to admit it or not, are going to affect the state of the economy and quite possibly pull you down with them.
I'll bet you said that to Kermit the Frog during The Muppet Movie too: "Don't worry about that guy trying to cut off your legs. That would be alarmist. Only crazy frogs worry about their legs being cut off by a guy who . . . said he wants to cut their legs off . . . it doesn't matter, it's still crazy. Anyone who is concerned with anything not directly related to pokeballs is crazy."
Real Estate is a high risk market. Like the stock market, you only gain or loss money when you sell.
So what if you are upside down on your mortgage, unless you are planning to sell your house why should you care? If that house was worth $500K to you when you bought it who cares if someone else is only willing to pay $450K for it?
In the long run Real Estate values always go up. It just sucks to be the one who buys right before a bubble bursts. A little bit of financial planning can fix that problem. So can a quick class on how the laws of supply and demand work.
Are American house prices as ridiculous as they are here?
Depends where you are.
One bedroom apartments in trendy areas of New York City can fetch millions of dollars.
I live in a small 2 bedroom house that I could sell for $250K easy. I could turn that around and buy a house four times its size in another state for the same price.
There is a four family house a quarter mile from where I work selling for $40K. Yeah, it's in a crap area of town. A mile away from that area of town is the good area where the same house would sell for $400K.
Real Estate is all about supply, demand and desire. If two people want the same house the price can go way up.
Real Estate is a high risk market. Like the stock market, you only gain or loss money when you sell.
So what if you are upside down on your mortgage, unless you are planning to sell your house why should you care?
It's pretty arrogant to think you'll never have to leave that house. What if you get divorced? What if you get hurt on the job or if you lose your job because the rest of the economy is tanking just as bad as the housing market and you can't pay the mortgage? What if your company wants to transfer you to another city and you don't have the skills or the education to get a job in your area that will enable you to pay that mortgage? You'll need to unload that house then. Just try doing it if you owe more on the house than it's worth.
What if you die and your spouse doesn't want to live in that house any longer? What if your spouse dies? What if both of you die and now your kids have an asset that's worth less than its mortgage? You think you could fix the situation by refinancing? If you can find someone willing to do it, you'll have some major tax implications.
What about your insurance rates? Do you think those rates will be unaffected if you let the house get upside down? Well, I guess you would let the insurance lapse because you'd be sure nothing would happen. Just try to rebuild your house if if it burns or is damaged by flood or hurricane.
What if other houses in your subdivision go upside down and people move, taking a loss? Then you have a bunch of abandoned houses in your subdivision that eventually end up being rented to dodgy rental types. Then the value of your house goes down even more, it's harder than ever to leave, and you're living in a combat zone of competing gang turfs and meth labs.
What if you need a second mortgage? People need second mortgages all the time because of medical emergencies, sending the kid to college, bailing the kid out of jail, and so forth. Kiss that option goodbye if the house is upside down. What if you want to use the house as collateral for a car loan? Forget it. In fact, take a stiff drink before you look at your credit rating if you own an upside down house.
So yeah, I think you should care if you owe more on your house than it's worth.
If that house was worth $500K to you when you bought it who cares if someone else is only willing to pay $450K for it?
You're paying the bank $500K for a $450K asset. You've just lost $50K, plus interest. If you don't care about that, you're duller than I thought.
In the long run Real Estate values always go up. It just sucks to be the one who buys right before a bubble bursts. A little bit of financial planning can fix that problem. So can a quick class on how the laws of supply and demand work.
Most people will be affected by this downturn in the short run. They can't afford to wait out the long term.
Children, this "law of supply and demand" crap is something else like the "Oh, I was joking" defense that the conservatives like to pull. If they can't understand how to articulate an economic argument they say, "Oh, you don't understand the law of supply and demand", like they're some sort of economic genius. In reality, they don't know what they're talking about.
Well, people in my country went to save money from dollars to euros. And I think as long as you have a united family or someone to relay one you can on anything. You know what is interesting, the great depression was not really Herbert Hoover's fault but alas since it happened during his time in office almost everyone blamed him. I wonder if people would blame Bush for this? .... Oh, Bush you depress me
If they can't afford to wait out the housing market then they should not be buying houses they can not afford in the first place.
All of your "what if" statements can be answered by saying, "if you can't afford the house don't buy it." The only possible exception is if you and your spouse die. Even in that case you should have some form of life insurance to take care of things after you are dead.
The law of supply and demand is not crap. High demand and low supply equals high price.
Even if you are paying the bank back for a $500K loan when the asset is appraised at a lower value you still paid the price you felt the house was worth when you purchased it. If you couldn't afford the house at $500K you can't afford it at $450K.
I'll bet you said that to Kermit the Frog duringThe Muppet Movietoo: "Don't worry about that guy trying to cut off your legs. That would be alarmist. Only crazy frogs worry about their legs being cut off by a guy who . . . said he wants to cut their legs off . . . it doesn't matter, it's still crazy."
Every time I read one of your crazy, alarmist posts I sing, "I Hope That Somethin' Better Comes Along."
The law of supply and demand is not crap. High demand and low supply equals high price.
I didn't say that was crap. I said you yelling "you don't know about supply and demand" or "you need to take a class in supply and demand" when you don't know what you're talking about is crap. Anyway, the housing crunch doesn't have as much to do with supply and demand as it does with the vicious cycle of mortgagors defaulting on loans and mortgagees responding by tightening credit.
All of your "what if" statements can be answered by saying, "if you can't afford the house don't buy it." The only possible exception is if you and your spouse die. Even in that case you should have some form of life insurance to take care of things after you are dead.
Well then, I guess these people were all in desperate need of your sage advice. Maybe you should open up a financial planning office. You could print up little business cards that say, "You don't understand the law of supply and demand as well as I do."
Also, you're arguing out of both sides of your mouth. You initially said "Why should anyone care if they owe more on their house than it's worth?", and then when I told you, you said, "Well, they couldn't afford it anyway."
Even if you are paying the bank back for a $500K loan when the asset is appraised at a lower value you still paid the price you felt the house was worth when you purchased it. If you couldn't afford the house at $500K you can't afford it at $450K.
Affording the initial cost isn't the problem so much as losing the difference, plus interest.
I'll bet you said that to Kermit the Frog duringThe Muppet Movietoo: "Don't worry about that guy trying to cut off your legs. That would be alarmist. Only crazy frogs worry about their legs being cut off by a guy who . . . said he wants to cut their legs off . . . it doesn't matter, it's still crazy."
Every time I read one of your crazy, alarmist posts I sing, "I Hope That Somethin' Better Comes Along."
Yeah, and what happened to those stupid muppets? They all felt the cold hand of Jim Henson up their bums. So . . . stop singing that stupid song or some guy is gonna stick his hand up your bum.
You'll think "crazy alarmist" until someone says something abot WoW and then you'll get all hot and bothered. Seriously, the world could be ending and you people would be like, "Meh", but if someone says something about WoW, there's hell to pay.
Thus the fundamental problem. If you can't afford to wait out the long term, you had no business buying a house in the first place.
Of course buying a house is a long term investment, but that's not quite what we're talking about. Even If a person can easily afford a house, that doesn't mean that same person can afford a substantial loss on its value over the long term, especially if the loss is such as to make the house upside down. I defy you to find a person who is not already super wealthy that can afford to keep an upside down house for the long term. It's so bad, even Congress is trying to do something about it, including revising some of their stupid 2005 bankruptcy changes.
Even if I spot you that this is a valid point, it doesn't really matter now because the damage is done and we're beginning the slide. Economic indicators are pointing towards a return of stagflation. If this article is right, it won't matter how insulated you think you are, how many times you sing a Muppet Movie song, or whether you think the messenger is a crazy alarmist. You'll be affected just like the rest of us.
Well, people in my country went to save money from dollars to euros.
Comments
If all else fails, you can count on some idiot coming along to screw things up.
I think hope is all well and good. However, I also think that it needs to be mixed with some pessimism. That's how you make the best plans.
Hey, they're the ones that came up with the idea of achievements. Now do you care?
Jeez. On the one hand you have no mercy for anyone who has ever made a bad decision and on the other you seem to think that there is nothing that can be done and that no one is in control.
I think it is valid to worry when the outcome is unsure.
If FDIC fails in addition to my bank, then the nation's already fucked and I'll just leave, making it all a moot point.
So what if you are upside down on your mortgage, unless you are planning to sell your house why should you care? If that house was worth $500K to you when you bought it who cares if someone else is only willing to pay $450K for it?
In the long run Real Estate values always go up. It just sucks to be the one who buys right before a bubble bursts. A little bit of financial planning can fix that problem. So can a quick class on how the laws of supply and demand work.
One bedroom apartments in trendy areas of New York City can fetch millions of dollars.
I live in a small 2 bedroom house that I could sell for $250K easy. I could turn that around and buy a house four times its size in another state for the same price.
There is a four family house a quarter mile from where I work selling for $40K. Yeah, it's in a crap area of town. A mile away from that area of town is the good area where the same house would sell for $400K.
Real Estate is all about supply, demand and desire. If two people want the same house the price can go way up.
What if you die and your spouse doesn't want to live in that house any longer? What if your spouse dies? What if both of you die and now your kids have an asset that's worth less than its mortgage? You think you could fix the situation by refinancing? If you can find someone willing to do it, you'll have some major tax implications.
What about your insurance rates? Do you think those rates will be unaffected if you let the house get upside down? Well, I guess you would let the insurance lapse because you'd be sure nothing would happen. Just try to rebuild your house if if it burns or is damaged by flood or hurricane.
What if other houses in your subdivision go upside down and people move, taking a loss? Then you have a bunch of abandoned houses in your subdivision that eventually end up being rented to dodgy rental types. Then the value of your house goes down even more, it's harder than ever to leave, and you're living in a combat zone of competing gang turfs and meth labs.
What if you need a second mortgage? People need second mortgages all the time because of medical emergencies, sending the kid to college, bailing the kid out of jail, and so forth. Kiss that option goodbye if the house is upside down. What if you want to use the house as collateral for a car loan? Forget it. In fact, take a stiff drink before you look at your credit rating if you own an upside down house.
So yeah, I think you should care if you owe more on your house than it's worth. You're paying the bank $500K for a $450K asset. You've just lost $50K, plus interest. If you don't care about that, you're duller than I thought. Most people will be affected by this downturn in the short run. They can't afford to wait out the long term.
Children, this "law of supply and demand" crap is something else like the "Oh, I was joking" defense that the conservatives like to pull. If they can't understand how to articulate an economic argument they say, "Oh, you don't understand the law of supply and demand", like they're some sort of economic genius. In reality, they don't know what they're talking about.
You know what is interesting, the great depression was not really Herbert Hoover's fault but alas since it happened during his time in office almost everyone blamed him. I wonder if people would blame Bush for this? ....
Oh, Bush you depress me
All of your "what if" statements can be answered by saying, "if you can't afford the house don't buy it." The only possible exception is if you and your spouse die. Even in that case you should have some form of life insurance to take care of things after you are dead.
The law of supply and demand is not crap. High demand and low supply equals high price.
Even if you are paying the bank back for a $500K loan when the asset is appraised at a lower value you still paid the price you felt the house was worth when you purchased it. If you couldn't afford the house at $500K you can't afford it at $450K.
Also, you're arguing out of both sides of your mouth. You initially said "Why should anyone care if they owe more on their house than it's worth?", and then when I told you, you said, "Well, they couldn't afford it anyway." Affording the initial cost isn't the problem so much as losing the difference, plus interest. Yeah, and what happened to those stupid muppets? They all felt the cold hand of Jim Henson up their bums. So . . . stop singing that stupid song or some guy is gonna stick his hand up your bum.
You'll think "crazy alarmist" until someone says something abot WoW and then you'll get all hot and bothered. Seriously, the world could be ending and you people would be like, "Meh", but if someone says something about WoW, there's hell to pay.
Even if I spot you that this is a valid point, it doesn't really matter now because the damage is done and we're beginning the slide. Economic indicators are pointing towards a return of stagflation. If this article is right, it won't matter how insulated you think you are, how many times you sing a Muppet Movie song, or whether you think the messenger is a crazy alarmist. You'll be affected just like the rest of us. Merchants here are beginning to prefer euros.