The economy

[Bouncer]

Shibby im not sure why you have to insult him to make your point.

says the guy that insults everyone to make a point. don't be a hypocrite you pussy.

[redsquirrel]

I don't see that I am insulting him. I am pointing out that he looks at how everything is suppose to be on paper but lacks the experience in the real world. This is keeping him from seeing or listening to how real life doesn't follow what you put on paper. I will give him the fact that others shouldn't bail out the people who take a risk and fail. But to insinuate that people are stupid for living paycheck to paycheck, as if it was a choice, is way off and that's where his immaturity for judging people for their status in life shows.

Exactly. People who live in glass houses love to throw stones. Chris doesn't really encounter real life struggles because he still lives at home. Right, wrong or indifferent, he can't speak from experience because he has no real world experience.

To touch on your previous point about the roller coaster my life has been the past 6 months- you are exactly right- you can do your best to prepare, but sometimes you just don't know. I was lucky to find a job quickly with benefits that started immediately. I get my last severance check tomorrow. I've paid off some debt & saved what I could, and have done my best to minimize my monthly outgoing. Because guess what- although my new position has six figure potential w/ bonus, I won't see that for 6-8 months; if I'm lucky. That being said- guess what Chris- I WILL be living paycheck to paycheck. I took a $35k PAY CUT. It's called putting yourself on a budget. MAYBE I can save $100 a month, in addition to the $250 we put into our Roth- and that's a BIG maybe. Hopefully, we will get a sizeable tax return since my husband was also out of work for the first 6 months of this year. Well, guess who had to pay the bills, and use up almost all of our savings to make ends meet??? You guessed it. And then before my husband got full time work, I got laid off as well. Before you start judging people because they live paycheck to paycheck, you really need to understand the daily struggles so many families in the US on a daily basis. We got lucky. We got lucky because we don't live beyond our means. Yet we still have some credit card debt because SHIT HAPPENS.

True, our house payment could be a little less. But guess what- we can't sell it, because then we would be selling it for what we owed...AND guess what again- we STILL put 15% down on a $300k house. But, as for the "lack of investment" real estate really is, you need to research that statistic as well. In TEN years, your home typically doubles in value...NOT 20. Most people don't stay in their homes for more than 7 years, and most people don't take out a 20 year mortgage. They take out a 30. The goal being the longer you stay, the more return you get; allowing you to put down even more on the next house; NOT to double your investment.

It's impossible for you to understand much of this just because you are looking at things from the outside in. We do what we have to do to survive. And, since real estate is 100 times better than renting, we do what we need to to get the mortgage paid. It may not be as hot as it was, but it's still one of the smartest investments you can make. As for your shortsighted view of investing in real estate vs the true cost to own, it's completely ludicrous. For maintenance and upkeep, you spend maybe $1000/yr. And that's a really high estimate. Secondly, you get to write off all of your property taxes, mortgage interest, & insurance on your income taxes. Someone please explain to me how that's costing me more because your parallel makes no sense.

[NYCmitch25]

says the guy that insults everyone to make a point. don't be a hypocrite you pussy.

hey fuck you, thats my point i was trying to say it in a nice way. he crys like a bitch whenever i joke around. now he does it and im the hypocrote like my nuts.

[mormonmuscle]

Exactly. People who live in glass houses love to throw stones. Chris doesn't really encounter real life struggles because he still lives at home. Right, wrong or indifferent, he can't speak from experience because he has no real world experience.

To touch on your previous point about the roller coaster my life has been the past 6 months- you are exactly right- you can do your best to prepare, but sometimes you just don't know. I was lucky to find a job quickly with benefits that started immediately. I get my last severance check tomorrow. I've paid off some debt & saved what I could, and have done my best to minimize my monthly outgoing. Because guess what- although my new position has six figure potential w/ bonus, I won't see that for 6-8 months; if I'm lucky. That being said- guess what Chris- I WILL be living paycheck to paycheck. I took a $35k PAY CUT. It's called putting yourself on a budget. MAYBE I can save $100 a month, in addition to the $250 we put into our Roth- and that's a BIG maybe. Hopefully, we will get a sizeable tax return since my husband was also out of work for the first 6 months of this year. Well, guess who had to pay the bills, and use up almost all of our savings to make ends meet??? You guessed it. And then before my husband got full time work, I got laid off as well. Before you start judging people because they live paycheck to paycheck, you really need to understand the daily struggles so many families in the US on a daily basis. We got lucky. We got lucky because we don't live beyond our means. Yet we still have some credit card debt because SHIT HAPPENS.

True, our house payment could be a little less. But guess what- we can't sell it, because then we would be selling it for what we owed...AND guess what again- we STILL put 15% down on a $300k house. But, as for the "lack of investment" real estate really is, you need to research that statistic as well. In TEN years, your home typically doubles in value...NOT 20. Most people don't stay in their homes for more than 7 years, and most people don't take out a 20 year mortgage. They take out a 30. The goal being the longer you stay, the more return you get; allowing you to put down even more on the next house; NOT to double your investment.

It's impossible for you to understand much of this just because you are looking at things from the outside in. We do what we have to do to survive. And, since real estate is 100 times better than renting, we do what we need to to get the mortgage paid. It may not be as hot as it was, but it's still one of the smartest investments you can make. As for your shortsighted view of investing in real estate vs the true cost to own, it's completely ludicrous. For maintenance and upkeep, you spend maybe $1000/yr. And that's a really high estimate. Secondly, you get to write off all of your property taxes, mortgage interest, & insurance on your income taxes. Someone please explain to me how that's costing me more because your parallel makes no sense.

I agree 100% Life happens. My wife and I moved into a house that was easily within our means with no debt, and money saved. 2 months after we moved in I ruptured a disc in my back that took me off work for 4 months. My wife had an emergency C-section and my son was put in the NICU for 3 weeks. To top it off I had to pay to put on new shingles cause of a bad storm that blew off most of my shingles. So in 2 months time I went from no debt except for a house, to $40,000 in medical debt that I had to pay for, (that's after my insurance paid) repairs on my house and a maxed out $2000 credit card that we used so we could eat, while I was off work not making any money. That credit card went over the limit without me realizing it and dropped my credit score over 400 points. My wife and I went from having freedom to not acquiring any kind of debt for 5 years just to make ends meet with a house that I had to keep from foreclosing and vehicles being repossessed. This is by no means near as bad as some people have it, but it's just evidence that you can do what ever you can and still lose everything quickly. Luckily I was able to sell my house, but my family and I are back living with my parents just so we can start over.

[Bouncer]

Dow suffers record point drop as House rejects bailout

Dow suffers record point drop as House rejects bailout | U.S. | Reuters

[NewbieChris]

You are completely out of touch with how real life intervenes and beyond most people best intentions they struggle. You make it sound like people plan to live paycheck to paycheck. Lets talk about me for example. We only have one income right now. Why? Well both my wife and I were in college (this is where we met) working the "plan". My wife and I find out we are having a baby. So what did I do? Well in your eyes I am sure it's stupid, but I stopped going to school and started working full time. This allowed my wife to continue her scholarship in hopes that it makes a better future for our family. She graduated in July but doesn't have a job. We thought she would have work papers by now but doesn't. Still working on that. Now there are some people that didn't plan well enough, but it's all about risk versus reward. There are plenty of ways life intervenes for everyone and you do what you have to. Your immaturity and your inexperience of life really shows through in this thread.

There are always extenuating circumstances, but the reality of the situation is that 95% of our society lives beyond its means. It is a terrible way to run yourself financially. I realize this is close to heart for you, but I'm not attempting to insult you. I know someone whose household income is 600k a year and their retirement fund is their house. That to me is the definition of America. We like to live beyond our means and don't save a penny.

Sit back and think about what I am saying. Can you seriously say that you fundamentally believe that you SHOULD NOT be saving money? If you do, then you are the disillusioned one. I never said that 'shit doesn't happen' and that difficult times call for difficult measures. That is not the reality of the situation for Americans however. We spend on shit we don't need. Oh, man that plasma TV you got is sick, right? Or that new car you just HAD to have was so important. At the end of the day, you don't have shit.

For some people its the house. Man, I never met a society so obsessed by shelter. I'm not saying you live in a shit hole, but there are definitely compromises that can be made.

[NewbieChris]

Exactly. People who live in glass houses love to throw stones. Chris doesn't really encounter real life struggles because he still lives at home. Right, wrong or indifferent, he can't speak from experience because he has no real world experience.

To touch on your previous point about the roller coaster my life has been the past 6 months- you are exactly right- you can do your best to prepare, but sometimes you just don't know. I was lucky to find a job quickly with benefits that started immediately. I get my last severance check tomorrow. I've paid off some debt & saved what I could, and have done my best to minimize my monthly outgoing. Because guess what- although my new position has six figure potential w/ bonus, I won't see that for 6-8 months; if I'm lucky. That being said- guess what Chris- I WILL be living paycheck to paycheck. I took a $35k PAY CUT. It's called putting yourself on a budget. MAYBE I can save $100 a month, in addition to the $250 we put into our Roth- and that's a BIG maybe. Hopefully, we will get a sizeable tax return since my husband was also out of work for the first 6 months of this year. Well, guess who had to pay the bills, and use up almost all of our savings to make ends meet??? You guessed it. And then before my husband got full time work, I got laid off as well. Before you start judging people because they live paycheck to paycheck, you really need to understand the daily struggles so many families in the US on a daily basis. We got lucky. We got lucky because we don't live beyond our means. Yet we still have some credit card debt because SHIT HAPPENS.

True, our house payment could be a little less. But guess what- we can't sell it, because then we would be selling it for what we owed...AND guess what again- we STILL put 15% down on a $300k house. But, as for the "lack of investment" real estate really is, you need to research that statistic as well. In TEN years, your home typically doubles in value...NOT 20. Most people don't stay in their homes for more than 7 years, and most people don't take out a 20 year mortgage. They take out a 30. The goal being the longer you stay, the more return you get; allowing you to put down even more on the next house; NOT to double your investment.

It's impossible for you to understand much of this just because you are looking at things from the outside in. We do what we have to do to survive. And, since real estate is 100 times better than renting, we do what we need to to get the mortgage paid. It may not be as hot as it was, but it's still one of the smartest investments you can make. As for your shortsighted view of investing in real estate vs the true cost to own, it's completely ludicrous. For maintenance and upkeep, you spend maybe $1000/yr. And that's a really high estimate. Secondly, you get to write off all of your property taxes, mortgage interest, & insurance on your income taxes. Someone please explain to me how that's costing me more because your parallel makes no sense.

Hey moody, everything you are describing is what is the opposite of what Living pay check to pay check is. If you weren't saving money, you wouldn't have had any savings to burn through. That being said, the fact that you can still save money and put it into an IRA is called savings. There are 10x more people not saving anything in this country, than there are who save.

To address you home value issue. Barring what you put down, you have to expect that you home must at least double in value to see a return on your investment because of the cost of the money you originally borrowed. Not to mention the upkeep costs of homes. New roof, gutters, windows, water heater, etc. However small, it is still part of your original cost of asset. People so often forget that they have to take out a large sum of money over a long period of time to buy a house. So, in fact when you take out a250k loan, you are paying double that amount back. Is that not true?

Finally there has been research done that if you stay somewhere <5 yrs its better to rent because of the way the market value of your home appreciates. I'd be curious how beneficial writing the interest off of your taxes is v. return on your investment.

Not to mention, I'm curious where you go the 10 yr statistic. Because, even at the height of the housing boom, having lived in the home appx. 10 yrs (1994-2003) in an area where property is at a premium, we didn't see our homes value double...

The thick and thin of it is that we put people in houses that cannot afford them. Maybe you with your fat 6 digit salary can afford it, but the reality of the situation is that many people were given these homes because of moronic legislation and now we have to buy their mortgages.

Its not the 93% of Americans that can pay their mortgage that I am upset with. It is the politicians and brokers that pushed this 7% of mortgages through that I am upset with.

[FrankTheTank55]

I am not saying everyone is so fortunate, but because people don't think about simple things, like SAVING money, I and 5% of the country have to come in swooping to the rescue and pay to support the country. Talk about unfair.

What do you mean by this? Who is the 5% that your talking about?

[babyblues]

The thick and thin of it is that we put people in houses that cannot afford them. Maybe you with your fat 6 digit salary can afford it, but the reality of the situation is that many people were given these homes because of moronic legislation and now we have to buy their mortgages.

Its not the 93% of Americans that can pay their mortgage that I am upset with. It is the politicians and brokers that pushed this 7% of mortgages through that I am upset with.

The problem is that banks were approving loans without any actual property value to back up the increase over the last loan on that property. There were no actual property valuations done, the loans were just approved and speculators were able to buy a house and flip it for a 30% - 40% profit without ever making a payment on that property. That's what is stupid. It's stupid to approve a loan for $400,000 on a house that is only worth $200,000. That means that the poor guy who gets stuck with the loan and actually tries to live in the house and make the payments gets the shaft.

And to add to that, banks who knew these loans were bad, packaged them with other loans and managed to sell them to another bank. Nice. Make stupid decisions and someone else pays for it.

[Shibby]

There are always extenuating circumstances, but the reality of the situation is that 95% of our society lives beyond its means. It is a terrible way to run yourself financially. I realize this is close to heart for you, but I'm not attempting to insult you. I know someone whose household income is 600k a year and their retirement fund is their house. That to me is the definition of America. We like to live beyond our means and don't save a penny.

Sit back and think about what I am saying. Can you seriously say that you fundamentally believe that you SHOULD NOT be saving money? If you do, then you are the disillusioned one. I never said that 'shit doesn't happen' and that difficult times call for difficult measures. That is not the reality of the situation for Americans however. We spend on shit we don't need. Oh, man that plasma TV you got is sick, right? Or that new car you just HAD to have was so important. At the end of the day, you don't have shit.

For some people its the house. Man, I never met a society so obsessed by shelter. I'm not saying you live in a shit hole, but there are definitely compromises that can be made.

Of course it's better to save money. But when you get out into the real world you will see it's so much easier said than done.

[redsquirrel]

Finally there has been research done that if you stay somewhere <5 yrs its better to rent because of the way the market value of your home appreciates. I'd be curious how beneficial writing the interest off of your taxes is v. return on your investment.

Not to mention, I'm curious where you go the 10 yr statistic. Because, even at the height of the housing boom, having lived in the home appx. 10 yrs (1994-2003) in an area where property is at a premium, we didn't see our homes value double...

The thick and thin of it is that we put people in houses that cannot afford them. Maybe you with your fat 6 digit salary can afford it, but the reality of the situation is that many people were given these homes because of moronic legislation and now we have to buy their mortgages.

Its not the 93% of Americans that can pay their mortgage that I am upset with. It is the politicians and brokers that pushed this 7% of mortgages through that I am upset with.

First of all, I am a pregnant female, so if all you get is moody from me, consider yourself lucky.

Secondly, we bought our first house in December of 2003 for $118k. We sold it in the fall of 2005 for $147k. Is that enough of a statistic for you? That's a 25% increase in less than 2 years. True, we did put about $4k into it when we bought it, but that's the return on the investment I'm talking about. Oh, and BTW- I live in the Midwest, so it's definitely not one of the areas that saw record increases.

As for the interest we are able to write off on our taxes, along w/ our property taxes & insurance....Let's see- last year was right around $13k for the mortgage interest deduction, my taxes are $3500/yr, and insurance is $1000....So, that totals, what- $17,500? Please explain to me how renting can offer me that kind of a tax deduction???? Even if it's 5 years. That's actually a farce. You pay the bulk of your mortgage interest in the front of your loan, so you get to write off more in the beginning. Even when we lived in our first house,we were still deducting I think around $6000.

Now, I have a 2 yr old house...so aside from a call to the AC guy for $300, we didn't really have any other expenses. New gutters, siding, & windows are not things that have to be done every year, or every other year, even. THose are things that are done maybe every 15-20 years....So that's really a moot point. In addition, when you upgrade or just maintain your home, it helps increase the equity.

I agree with you that there are some dirty mother F'ers to blame here. But, you still have to assign some responsibility to the consumer. They KNEW what the lender was "stating" their income to be. They KNEW what their payment could adjust to when the time came, yet they took the loan anyway....most of them knowing full and well they would not be able to pay. Don't just blame it on the lenders. I do NOT agree that we as taxpayers need to bail them out after they have made millions. I don't agree w/ the bailout plan as a whole. I do agree that in order for us the economy to survive SOME buyout of the bad debt is required to allow the banks to lend to each other again, let alone consumers. Some business even borrow money to pay salaries to the employeed. True, its sucks asshole that we still have to do it, but it's really the only way the economy can move forward.

Lastly, if you re-read my post, you will see that I do NOT make a 6 figure salary. I'll be lucky to make over what my base salary is over the next 6-8months. That's why I will be living paycheck to paycheck. And, I didn't go and buy a plasma, and while I need a new car, I can't afford one. So, I have to hope that I make enough to afford one, or at least pay for the repairs to my current one. I understand your point about want vs. need....But people need gas and groceries, and incidentals every day- and yet can't afford them, so they pay for it with credit. Sometimes it's not about living beyond your means- it just about living.

[NewbieChris]

Secondly, we bought our first house in December of 2003 for $118k. We sold it in the fall of 2005 for $147k. Is that enough of a statistic for you? That's a 25% increase in less than 2 years. True, we did put about $4k into it when we bought it, but that's the return on the investment I'm talking about. Oh, and BTW- I live in the Midwest, so it's definitely not one of the areas that saw record increases.

Are you saying the height of the boom is a good time to judge how pricing is set?

As for the interest we are able to write off on our taxes, along w/ our property taxes & insurance....Let's see- last year was right around $13k for the mortgage interest deduction, my taxes are $3500/yr, and insurance is $1000....So, that totals, what- $17,500? Please explain to me how renting can offer me that kind of a tax deduction???? Even if it's 5 years. That's actually a farce. You pay the bulk of your mortgage interest in the front of your loan, so you get to write off more in the beginning. Even when we lived in our first house,we were still deducting I think around $6000.

Now, I have a 2 yr old house...so aside from a call to the AC guy for $300, we didn't really have any other expenses. New gutters, siding, & windows are not things that have to be done every year, or every other year, even. THose are things that are done maybe every 15-20 years....So that's really a moot point. In addition, when you upgrade or just maintain your home, it helps increase the equity.

You are not taking into account the real cost of the house. Tax incentives aside. If you had the ability to buy a home outright, are you arguing that would be the wrong idea? You seem to consistently be missing the point that, regardless of being tax exempt the interest you pay on a home = the value of the mortgage you take out.

I agree with you that there are some dirty mother F'ers to blame here. But, you still have to assign some responsibility to the consumer. They KNEW what the lender was "stating" their income to be. They KNEW what their payment could adjust to when the time came, yet they took the loan anyway....most of them knowing full and well they would not be able to pay. Don't just blame it on the lenders. I do NOT agree that we as taxpayers need to bail them out after they have made millions. I don't agree w/ the bailout plan as a whole. I do agree that in order for us the economy to survive SOME buyout of the bad debt is required to allow the banks to lend to each other again, let alone consumers. Some business even borrow money to pay salaries to the employeed. True, its sucks asshole that we still have to do it, but it's really the only way the economy can move forward.

I don't know where I placed all of the blame on the lenders. I certainly don't and if my posts have not portrayed that, I don't know what else to say to you. The bailout plan is fundamentally flawed because, like everything in this country, it relies on debt. It goes back to early W. years and the repeal of pay-go. We were running budget surpluses during the late 90's. We've doubled our national debt 8 years and now we're going to add another 10% on top of that. With McCain and Obama and their bullshit talk about pork and special interests I nearly puked last Friday. We're never going to get ourselves out of debt as a nation with these assholes running the show. WHY THE FUCK COULDN'T cut this 700billion out somewhere else before spending it. That should be a mother fucking stipulation in this fucking ridiculous BUY out.....Not to mention, we are buying an asset at an inflated price that we are not going to see a return one. <---Period, no argument, STATEMENT OF FACT!

Finally, they are adding so much pork to this bailout plan that it will most likely cost us 1.5 trillion dollars. Personally, I would rather let the market shit on banks and let the vast majority of them fail. Its all the fucking bankers that are hording their money, even though the Fed and central banks all over the world are throwing money at them. They should only be lending out this money to banks who promise to lend out the money they get!

Lastly, if you re-read my post, you will see that I do NOT make a 6 figure salary. I'll be lucky to make over what my base salary is over the next 6-8months. That's why I will be living paycheck to paycheck. And, I didn't go and buy a plasma, and while I need a new car, I can't afford one. So, I have to hope that I make enough to afford one, or at least pay for the repairs to my current one. I understand your point about want vs. need....But people need gas and groceries, and incidentals every day- and yet can't afford them, so they pay for it with credit. Sometimes it's not about living beyond your means- it just about living.

I realize that, and I said that multiple times to Shibby. My point is that for MANY, I would say most, Americans its about having the next best thing. The fact that 70% of our GDP is comprised of consumerism should tell you that.

[NewbieChris]

And to add to that, banks who knew these loans were bad, packaged them with other loans and managed to sell them to another bank. Nice. Make stupid decisions and someone else pays for it.

Talk about something that really bites my chops...SOMEHOW S&P and Moodys are still respected....WTF?!?!?!? :drunk: I want some of that juice.

[Mr I]

Everything RS is saying is spot on here

[Bouncer]

they just passed the bailout plan..