Help the Economy, drive a car with good mileage

[MGC]

Having been alive through many a recession, the current economic downturn is nothing compared to past recessions. Want an example of a really bad recession? Check out the recession in the early 70's after the OPEC embargo and 4X price increase of oil. And as far as discussing the economy and politics I don't see that relationship in this thread....MGC

[Stephanie]

Having been alive through many a recession, the current economic downturn is nothing compared to past recessions. Want an example of a really bad recession? Check out the recession in the early 70's after the OPEC embargo and 4X price increase of oil. And as far as discussing the economy and politics I don't see that relationship in this thread....MGC

I remember all of the stories, the long lines at the gas station where you had to pay a minimum just to get gas. I remember the gas stations that were closed as well. I was a preteen back then so I couldn't really appreciate the impact that it had on my parents. I agree that this is nothing like that one nor were some of the more recent recessions, thank God! It still hurts though, but I believe we'll get through this one as well.

[DanKellFla]

Funny, so far, the recession hasn't officially begun. Of course we will get through it. But I think this one will be different because of the housing and credit situation. Three doors down from me is a beautiful house that is going to be foreclosed on soon. That litterally, 'hits close to home.' I don't remember that happening so widely in the 70s, or any other time. Also, we are in a more globalized economy, and who know how that will affect everything? It is like the old Chinese curse, "May you live in interesting times." Right now, things are very interesting. BLECH!!!

[Stephanie]

Each recession begins for different reasons as well as their recoveries.

You're right, we're not "officially" in a recession, but we usually don't know we're in one until the measuring stick of 2 consecutive quarters with reduced or negative growth shows it. I would bet a dollar (all I can afford ) that we are in one, but if not, then it's pretty close.

[mf_dolphin]

Let's all remember that the "housing" situation can be attributed to one All-American condition, greed. With the housing market booming, lenders came up with a way to loan money to people, and I mean 100's of thousands of people, who wouldn't have normally qualified. Some of these sub-prime lenders turned around and sold these mortages to other greedy people who were salivatng on the coming higher interest rates. That's the main reason we now have so many homes being foreclosed on pure and simple. You want to guess who's going to end up paying the price????

[Stephanie]

Capitalism at it's finest! You're so right Marshall!

[JonathanBelles]

Capitalism at it's finest! You're so right Marshall!

I had a chuckle out of that too. kudos marshall.

[MGC]

Greed is the instrument that drives capitalism.....MGC

[gtalum]

We need a bigger change than just more fuel efficient cars. We need to develop non-fossil-fuel energy production and more efficient modes of transportation all around. In a lot of ways, the low price of oil throughout the 20th century (with a brief exception in the 1970's and early 1980's) has made us too dependent on a limited resource.

Further, the rising cost of oil in the US has more to do with the falling dollar than with any inherent cost increase in oil production. The Fed's attempt to bail out irresponsible lenders and borrowers is driving inflation to higher and higher levels. I only hope it doesn't become untenable.

[Stephanie]

Greed is the instrument that drives capitalism.....MGC

Yep.

[southerngale]

Let's all remember that the "housing" situation can be attributed to one All-American condition, greed. With the housing market booming, lenders came up with a way to loan money to people, and I mean 100's of thousands of people, who wouldn't have normally qualified. Some of these sub-prime lenders turned around and sold these mortages to other greedy people who were salivatng on the coming higher interest rates. That's the main reason we now have so many homes being foreclosed on pure and simple. You want to guess who's going to end up paying the price????

And I'm already paying for MY house, the inexpensive home that I could afford at the time. I don't want to pay for someone else's house because they bought one they couldn't afford. I've been living in this one for nearly 9 years, and am finally able to buy a nicer, bigger house, and have been searching for one. Personal responsibility, guys.

Btw, my economic situation has steadily improved the last several years. I'm certainly not rolling in dough, but we're doing just fine, as are most people I know.

[DanKellFla]

Greed has many forms. I have some properties that I bought as long term investments that I am going to lose. There really is nothing I can do about it. Everything was going along smootly and then my tennants started to disappear mid-lease and rents started to drop. (They were going to find places with lower rents) Then, there was no equity in the house to keep me going... falling behind in the payments etc... I had $40K in emergency funds just for this reason, but that disappeared pretty quick. If I ever collect the money that I am owed, it will be too late for me to keep my properties. I wasn't aiming for a positive cash flow, just enough to cover the expenses. I didn't need a positive cash flow, I have my job for that. Now, I am screwed. I even went to see a bankruptcy attorney. He made a very interesting comment. He said that of the dozen or so people he sees everyday, I was the only on that had tennants. All the others were just flipping.

And yes, you are right. We are all going to end up paying the price. But what choice do we have? Once property taxes go down due to housing valued going down, it will impact the services that municipalities will offer. And then property values go down more because neighborhoods decay. Etc. Etc.... There is no way to escape. Personally, as an investor, I am not qualified for any bailout of any kind. It is a really messed up situation that was fueled by greed from the CEOs of the banks to the speculators, including me.

[CajunMama]

Dan, i wish i could wave a magic wand and make all your troubles disappear. I hope that some miracle will come along and everything will be alright for you.

[Stephanie]

And I'm already paying for MY house, the inexpensive home that I could afford at the time. I don't want to pay for someone else's house because they bought one they couldn't afford. I've been living in this one for nearly 9 years, and am finally able to buy a nicer, bigger house, and have been searching for one. Personal responsibility, guys.

Btw, my economic situation has steadily improved the last several years. I'm certainly not rolling in dough, but we're doing just fine, as are most people I know.

You hit the nail on the head there, Kelly. I wonder how some people thought they were going to come up with the additional money to pay for the mortgage when it ballooned. Some just don't care and worry about it later and live for the day.

Then again, there are people that just don't get basic budgetting and finance and they, unfortunately, are the ones the greedy mortgage companies love to get their hands on. Actually, I think that the mortgage companies should be held equally responsible.

If I wasn't about to be laid off and took a $10,000 pay cut for my new job during the past year, I'd be feeling a bit better about where I'm at. I travel 100 miles a day for work, so the gas price fluctuations give me indigestion. I'm not saving as much for my 401k as I used to and the savings I had in some mutual funds dwindled substantially. I know that my grocery bills are higher and so is the gas bill to heat my house. I was at least smart enough to get my credit card debt down to a reasonable amount over the past several years. However, any large expense that may come forward will be another debt for me. I'm not out there shopping like I used to, taking a last minute trip to the mall, etc. I'm watching every penny like a hawk.

Dan - I'm so sorry that you are in the position you are in. The comment by the attorney is rather scary.

[DanKellFla]

Dan, i wish i could wave a magic wand and make all your troubles disappear. I hope that some miracle will come along and everything will be alright for you.

Mama, that thought helps. But, I maintain a positive attitude along with being relieved that I live in Florida, a debtor friendly state. There is a reason why Florida is the scum bag capital of the country. You can get away with a lot of not so nice things with the penalty of very bad credit.
At least I can make my house payments, I know a lot of people who can't even do that.

Stephanie, there will be some CEOs that will be going to jail, along with some mortgage brokers, home appraisers, etc... There was a lot of financial mumbo jumbo that drove this market and a lot of innocent people are going to pay.