Economy Concern

[DoryJM]

I think we can all agree that it was greed on the part of the bankers and also the folks who thought that they could get these loans and either a) sell the houses and get rich quick (we all know how that happens); or would suddenly be able to live and make their ridiculously high mortgage payments.

I don't know if any of you have ever heard of Dave Ramsey, but he makes the most sense of all in this time of crisis, in my honorable opinion. I started listening to him two years ago, followed his plan, and became debt free, except for our house. Then I bought my Millennium and my husband started his business. Even so, we're not living on credit cards and we pay our mortgage and our bills every month.

Dave Ramsey has come up with an alternative plan that will cost the tax payers 50 billion, not 700 billion, and could actually work to better our nation. If you're interested in reading about it, this is the website: http://www.daveramsey.com/etc/fed_bailout/index.html

Okay...I'm stepping away from the soapbox:D

[jeri]

I agree 100% with all of you talking about the credit situation. People who have mortages far more than what they can afford and owe lots in credit card debt. I'm thankful I don't have those debts--if I can't pay for it I simply don't buy it. I paid cash for my machine and right now am just quilting a bit part time.

I work for a large mutual fund company as a customer service rep. Since I've been listening to people over the past few months with the declining market I do believe that people are cutting back on the luxury items especially those who are retired and count on their investments to supplement their pensions and social security.

The past 2 weeks have hit a lot of people's retirement account pretty hard and even before then with the market down approx 30% for the year those who have had a very comfortable retirement were feeling the decrease. Having quilts quilted is a luxury and think unless the economy does improve quilting will take a bigger hit than it has.

jeri

[jeri]

Dory--I agree about Dave Ramsey. I work during his radio show now so can't listen and have no clue what his b"bail out" plan is but definately agree with his debt free strategy. jeri

[Robin]

Shana,

I'll remember not to tick you off. Yikes! But, I so agree with you, even though I used to do real estate loans at my last place of employment (for 19 years)! Our bank didn't make stupid loans like that, we were very conservative. I remember seeing the ads for those interest only loans and sub prime mortgages and thinking "How can the banks offer that?" and also I said (out loud, I might add) "What are the kids thinking that go for these loans" They are thinking I can have a fancy house right now, never mind that my parents had to work many years to acquire what these kids want right now. I think there is blame on the bank's part and the part of the borrower, after all, they have a brain or I think they do, they can say "No, that would be a dumb thing to do, go into a home loan with nothing down and pay interest only, hoping that the home will appreciate enough in value to be able to sell it some day." You know what I get tired of is people and banks not taking responsibility for their own stupid actions! And then the responsible ones, like us have to take the hit in the end. Not fair! There I have said it, now where's my chocolate, I need to calm down.

I'm going to go watch the twins game and chill out. I watched Fox News last news and got completely depressed..."Go Minnesota Twins!!!"

Take care,

Robin

[Mary Beth]

We call him "Uncle Dave" at our house...Jen (my DD) swears by him. Since they have been in a financal bind since Jen was pregnant and couldn't work. Now she read/listens/eats/breathes Dave Ramsey and tells me..."You know what Uncle Dave says..."

[jenward]

My little brother turned us on to Dave Ramseys plan early this year. Thankfully!! I only work 12 hours a week (otherwise I'm the stay at home mom), but to make that happen my DH works at UPS full time and then did side construction/remodeling on the side. We got on Dave Ramseys plan and paid off our biggest debt's in about 5 months with money we would have just blown and wondered where it went. We changed our habits and lifestyle, looking back, it is such a good thing. There are no remodeling side jobs right now because people are scared and we wouldn't have been ok in our current financial situation. When my brother first told us about the Dave Ramsey plan I thought he was nuts! We bought the Total Money Makeover and it made sense. We aren't living above our means, just staying a float.

P.S. You can listen to Dave Ramseys show online at Dave Rasey.com. You can listen to the live show or the archives.

Jen

[DoryJM]

I do like Dave Ramsey and he's helped us to really think about some of the spending we do. Doesn't always make us NOT spend, but at least we go into it with open eyes...or should I say, an open pocketbook;)

I just really like his common sense approach. A guy I work with is borrowing the book from me because his wife thinks credit cards are a tool... He wants to read it and then invite us over for a glass of wine and to talk about the plan. Not sure I even want to go there:o

[Gator]

I hope there's an answer somewhere. I work with young sailors everyday who are having massive problems with credit. Their answer to a lot of their problems is pay one credit card bill with another credit card!! You don't even want me to talk about "pay day loans". Some of these kids are thousands of dollars in debt but they have new Hummers, BMWs, the latest cell phones, etc. Our branch of Navy Relief has handed out a million dollars in help this year. There are those that are smart, live in barracks, drive modest cars and put their money in what we call TSP, but they're the minority. I worry about the sailors with/without families that decide to get out of the military and go out into the world after having their medical, dental, insurance, housing monies given to them. They've also had credit thrown at them like candy because the business know they can get their money (allotments/garnishments). Somehow we need to teach the younger generation not to follow today's trends.

[Quilting Heidi]

Connie,

Unfortunately it isn't just the military young that are so far in CC debt! Kids get those cards given to them and nobody sits down and explains to them what it means when you only make minimum payments and how long it will take you to pay it off. Very sad. I work at a university and some of the students are money smart (they are all smart, it is an engineering school) but most don't have common sense! I always put my mom hat on if I notice a kid spending too much or living high on the hog and saying they'll take care of it when they graduate and get out of school. I did the same thing with my kids from the time they were old enough to understand what money was. I still remember the day I told the kids we couldn't go to McDonalds for dinner and their answer was "Go to the bank and get some." LOL our lesson began then. We went to the bank and opened up savings accounts and started with $5 each. Then everytime they wanted something I would say, "Go to the bank and get some money." LOL They still remember that. I remember that they used to teach this kind of thing in my HS and they no longer do. Sad I think. Of all the skills you need in life to succeed it is how to survive and live within your means. I think it should be a requirement for graduation!

[DB]

Heidi, I have to ask. What engineering school are you at? I just spent yesterday in Troy with my son touring Rensselaer. I will absolutely kick myself it that's where you are and I didn't stop into say hello. We did the 3 hour drive, visited, and turned around and drove back. Long day.

Dianne

[PamelaA]

I do use my credit cards. I don't carry a lot of money on me and find it handier to pay with a credit card. However, I understand that each time I use it I am really spending money and at the end of each month I pay the entire bill. I make use of the on line ability to track my account too so that I know what I can afford and what I can't. I know that I am one of those people that the credit card companies don't like but the system works for me. When I was growing up money was tight and I learned that I couldn't always get everything every one else had. It meant budgeting and saving. I don't see the younger generation learning those lessons.

When I went to get a mortgage loan I figured out what I could comfortably pay each month and therefore what my limit I could spend. When I was signing papers the lender told me that they would have approved a much larger loan. I told him no that I knew what I was comfortable with and no more. It doesn't surprise me that the interest only loans are blowing up in both the lender's and the borrower's faces. I am retired and worry about my portfolio each day. At least JJ (my milli) is paid for and I have a lot of stash!

Pamela

[Susanri]

Have you seen some of the CEOs salaries some as high as 75 million a year!!!!! even when the Bank was not making a profit!! and we have beg for mercy and give back money if we stitch out of line!! can't wait for those crooks to go to jail if Martha can do 4 months for 40 grand those ceo's should get life they knew what they were doing!!

[Bonnie]

Originally posted by DB

Heidi, I have to ask. What engineering school are you at? I just spent yesterday in Troy with my son touring Rensselaer. I will absolutely kick myself it that's where you are and I didn't stop into say hello. We did the 3 hour drive, visited, and turned around and drove back. Long day.

Dianne

Start kicking Dianne...that's exactly where she is at.....

[Quilting Heidi]

Dianne,

Start kicking yourself!!!!! I work in the big ugly white building with the port holes! I work for a Research center that specialized in Robotics. If it makes you feel better I was working from home yesterday but then you could have come to my studio! Let me know if you come back to Troy. Did RPI make the short list?

[DB]

I can't believe it!!! Why couldn't some one start this thread a week ago.? We did stop in one building (one of many) that had a track on the ground in one of the class rooms that was use to test remote control cars. Is that the building you work in? You need to hang a quilt outside your door. That, I would have spotted and bee lined over to in a no time. Yes RPI has made the short list. Honestly, is this a party school or do the kids actually work? Dianne

[Quilting Heidi]

Dianne,

OK so all schools are party schools but I have to say that Rensselaer requires their students to perform! They have worked very hard to make first year successful and have lots of programs in place to help them along the way. I don't know where the remote control cars are, its a big campus and lots to do with robots. I'll ask my boss if they have them in our building. We don't have them in our research center. We're just over the foot bridge and the only white brick building on campus. I do have quilts hanging in my office and the main suite. LOL you just didn't look hard enough! If you come back let me know! What area of engineering is your son interested in?

[chickenscratch]

Okay, I have to get in on this conversation . We are one of those families trapped in that mortgage mess.

When we bought our house 4 years ago we were financial stable. In the last two years we have had one problem after another, and now it is a struggle to pay the bills.

The crazy thing is that the house payment is the ONE bill we have made sure is paid every month, on time; and we can't qualify for any of the housing refinancing because we haven't ever had problems paying the house payment. How stupid is that?

[QuiltsbyNini]

Teresa, it looks like we are in the same boat! We bought or home 6 years ago, thought we were 'downsizing'. Then we added 3 more people to our household and completed the basement with a two bedroom apartment for my mother. I was working full time in the insurance industry making much more than my husband (who is in law enforcement). My hubby also has his own business on the side. Although we had two kids in college, we were doing great. All bills were paid on time and in full. We both drove new cars, and could basically go out and pay cash for anything we wanted.

Then the bottom fell out! My mother was killed in a car wreck and my youngest (then 3 year old) was severly injured requiring a 2 month stay in intensive care. I lost my good paying job because I had to stay at the hospital all the time. Now, three years later, our monthly pay has been cut in half. My husband has to work many extra hours to make ends meet. My new car is gone, replaced with a much more 'reasonable' car that is about half the price of my 'new' car. I am now a stay at home mom who also homeschools a 7 year old and an 8year old.

While it has been difficult, we have always managed to make the house payment. We figure we have to have a place to sleep... everything else can wait in line. Unfortunately, we do have a bit of CC debt. We don't have the thousands that a lot of people have, but we do have more than I am comfortable with. I have two student loans that I took out that we can't pay for. ( I paid the first year for each kid, and then they paid the rest)

It really gets my goat, that people that tried to spend like there is no tomorrow now expect me to bail them out! For the past three years, we have had financial problems, but we have managed to barely keep our head above the water...and I never once expected anyone to bail me out! Now, because we have never been late on our house payment, we don't qualify for any of the assistance that is being offered...

Because my two youngest are not yet adopted, I get to go to the local DFACS office twice a year for our review. I am appaled at what I see waiting in the waiting room for assistance! I see more BMWs and sports cars in the parking lot than I see at the Malls! People need to get their priorities straight!

Sorry this is so long... my soapbox is getting a bit too used today!

Nini

[PattyJo]

Just a bit of a different spin on the economy - this year at Innovations, there were very few venders. I'm thinking that there are a lot of people in the industry that are hurting because we aren't buying as much as we have been. And the cost to get from their home to these shows has increased sooo much with the gas issues. I don't know what the attendance was this year compaired to previous years, but it seemed like less people, but hard to know. Anyway, just some more thoughts. :cool:

[kennan100]

I noticed this last week that the price of gas has started dropping. It's down about $1 a gallon as of Friday. It was up to 3.89 a gallon before Ike. That's the last time I filled up. I filled up again Friday for 2.89 a gallon. That drop has happened in the last week since the bailout. Last I heard oil was down to 70.00 a barrel. I believe a lot of this is because of the stock market. Now I'm watching real estate also. There is a house for sale across the street from me that was built in the mid 70's. The detached garage has been converted to an apartment for the lady's mother. (Anyone hear the word "studio"?). I looked it up online and they are asking 179K. Now the aprtment has turquoise countertops, and the main house has avacado green countertops and the sinks in the kitchen and baths are also avacado green, the living room has dark paneling. So you can pretty much guess that this house has not been touched since it was built. 10 years ago this house would have sold for 80K. My boss bought a similar house 6 years ago, in the same town, for 110K. This economy has been so artificially inflated over the last 6 years it's just unreal, so it was bound to come down because the public just does not have bottomless pockets. It had to reach a point and just topple under it's own weight. I think we are going to start seeing a lot of things begin to come down again, including saleries for some of these executives.

[MarieBrewer]

I've often wondered what kind of a panic the financial planners/brokers/agents are in. As our 401K has dropped 50%, his/her commission has been cut in half. I'm just one person and they are living off of many people's money. Fewer trips, fewer golf outings, cheaper car perhaps? I think we should start in high school teaching kids the Dave Ramsey method. He's right, live like no one else now, and no one else will live like you in the future.

[Grammie]

It's like we are saying "THE BANK MADE ME DO IT" Please........So what ever happened to personal responsibility. True the lenders have given out loans they shouldn't have but what about all those people financing sums of money they KNOW they cannot afford. They are part of the problem also. My husband and I were approved for over $600,000 and my GOD we couldn't afford that. I don't care what the lenders say or the numbers say. Believe me we financed pocket change compared to what we were told we could finance.

At one time people were complaining that lenders were not giving families a chance to get a home financed so when they did they went WAY too far. Now people are mad because they financed people that should not have been financed in the first place for the amounts that received.

Smart financial advisors have been saying for years that a FIXED rate is the way to go and yet people continue to finance homes at low interest rates with no money down and still they they will be able to refiance after the first year. If you cannot put any money down on a home in the beginning why think you would be able to in a year. People have gotten too big for their budgets and are living way beyond their means. This is a real problem. What about all those OVERPRICED appraisals out there. Personal finances are the responsiblity of the borrower not the lenders and politicians.

Taking Personal responsibility is a must if people really want change. The market will correct itself in time I believe. Buckle down and get to saving. Pay off credit cards and educate your families and children that it's time to a RESPONSIBLE family and let everyone participate in the change. Teenagers DO not need NEW CARS and a allowance every week. The workers in this country are the solution. We do have some power over the market if we all do our part despite the idiots we put in office who aren't doing the jobs the american people expect of them. We have to do our part. We just keep electing them and OVER PAYING them and they do nothing. Remember they HAVE Health Insurance and YOU PAY for it and STILL REELECT them ever year. There shouldn't even BE CAREER POLITICIANS. They know the American People will continue to do without while they have it all. That doesn't make any kind of sense to me at all. Take charge......

"Like my grand daddy would say "You can lead a horse to water but you can't make him drink"

[gable428]

Grammie Tammie, my husband and I had this very conversation last night. He was blaming the banks and I said what about the people?! People need to learn to budget and live within their means and stop trying to keep up with the Joneses. My sister and her husband are into keeping with the Joneses and believe, me, I would not want to be in their shoes. And speaking of credit cards and educating our children, boy have I tried that! My 23 year old went crazy with the credit cards and collection agencies were calling the house constantly. I did something stupid by paying off her debt and guess what? Six months later, the collection agencies are calling again! I bailed her out once, I will not do it again.

[quiltmonkey]

OK Let me ask you all this question:

If the banks CHOSE NOT TO LOAN money on the OVERINFLATED homes then the OVERINFLATED homes would not sell and therefore, the asking prices on these OVERINFLATED homes would drop. Correct? But, instead, the banks were greedy and wanted to make hay so they found ways to sell these OVERINFLATED homes to consumers by providing tantilizing schemes like low interest ARMs and no down payments to consumers who in all reality COULD NOT AFFORD TO BUY these OVERINFLATED homes in the first place!!! :mad: It's like sending 20 kids into the candy store and telling them they can take as much candy as they want for free, but oh by the way...remember that some day you will have to pay for that candy!!! Do you think the kids are thinking about the "someday I have to pay for this candy?" or do you think these kids are thinking "yippeee! I get to eat all this candy for free right now how cool is that! Let's pig out!!!" I think it's the latter. Now these kids are getting hit with reality. They all have these giant piles of candy to eat, and they've been eating the giant pile of candy for years, and now their teeth are rotting out, they can't pay the dentist bills and now the candy store wants its money, too. But the sad thing is the kids never thought about the "someday gotta pay the candy store" because they were having too much fun partying and eating candy.

Getting back to my main point: If the banks didn't give loans out to buyers for the OVERINFLATED homes then these homes would remain their "real" value and people wouldn't be paying the OVERINFLATED prices. If the banks had morals and fundamental rules, and these banks abided by standard basic guidelines for consumers, we wouldn't have 3 bedroom 2 bath homes in southern california selling for a million dollars.

If the banks CHOSE NOT TO haphazardly hand out a gazillion credit cards with outrageous finance rates to everyone and their dog on this planet without any regard to the consumer spending and paying off these credit cards ...It is outrageous and it has gone to madness, I tell you! madness!

Earthquakes. We all feel the little tremors every once in a while, and then eventually, the big earthquake happens. Well, this is the big earthquake, folks. Hang on tight. We'll surely have some aftershocks from the big earthquake. Hopefully the market will readjust itself from the big fat overinflatedness it allowed itself to get into. It's gonna be a rough ride but eventually things will settle back to "normal" again (I hope!) And sure as heck paying a million dollars for a modest 3 bedroom family home is not normal.

I agree: it takes two to tango, and the banks are to blame, but also the consumers who allowed themselves to live in the moment without really thinking about the huge debt they were getting themselves into. I hope we all get back to the basics again. There is too much "stuff" out there to buy that is not necessary but we all want to have this stuff, so we buy it on credit cards. Remember George Carlin's joke about "stuff" it is too funny. He's right. How much "stuff" to we really need?

We need accountability. Banks to be accountable for their actions, and consumers to be accountable for their actions. Responsibilty and accountability are fundamental and unfortunately our society has thrown responsibility and accountability out the window in order to have "stuff" we can't really afford and don't really need. So sad.

The comments about not qualifying for assistance with the home financing because you pay your mortgage on time. Well, what about folks like me? I am responsible (I have always have been conservative with my money) and I pay my mortgage on time, too, but I am not in the fiancial mess with an ARM. When we refinanced a few years ago to add on to our home, we qualified for a $500,000 fixed rate loan. What? No thanks, I don't want that type of mortgage over my head. We only took out a $100,000 home equity loan to remodel the house we've lived in since 1994 (which was almost paid for when we refinanced). I have a 6% fixed rate mortgage on a 15 year loan and I pay my bills- which is a mortgage and a car loan; that's all I have for debt. I have some money set aside in savings in case I need it. My husband and I have (or shall I say we used to have) over $500,000 in 401K investments and pensions. Now that's pretty much gone after the stock market took a dive; more dives to come, I'm sure.

I trusted these people with managing my investments. However, I was not told that the foxes were watching the hen houses and now look at what happened? I know some day the stock market will bounce back, but when? Just gotta hold on tight to that surf board with all 10 fingers and ride the wave. Hopefully we will all survive this giant wave without crashing into the rocks. What makes me angry is I am responsible with my money and I have saved and I have invested and I am careful with my money. I have zero credit card debt. Now I've lost a lot of my savings in 401K and pension because of greediness that was not my own doing. Is there something for me so I can qualify for a bailout for that loss? I don't think so. I, along with other folks who chose not to go to that candy store, are innocent victims in this mess. Guess what? I get to bail out those who had their fun in the candy store. And the greedy candy store owners (the banks) that used "creative accounting" to move the fake money around...hiding it in sneaky ways hoping they could go on forever undetected with their devious schemes and that the bottom would not fall out... And, now I have to buy all those bankrupted candy stores, too, when I never wanted to buy a candy store in the first place. And, I never got to have any terrific experiences rolling around on top of a giant pile of candy, yet me-- I have to pay for the candy that someone else gobbled up in a festive string of all night parties.

So, when the candy stores and those who took candy from those stores-- when the banks all file for bankruptcy because they no longer can hide the fake money with creative accounting; and the consumers ---when can't pay their insurmountable debts caused by years of careless decadence and an excessive lifestyle of rolling around on top of a gigantic pile of candy ... well, I ask you... who ends up paying for this candy and candy stores? Someone has to pay for it down the road. The tax payers.

Oh goodie! This sure is fun.

I hope after the dust settles and the investigations start into the root causes of this horrible gigantic greedy mess is done and those who did these unethical things with our money are thrown in jail and laws and regulations for responsibility and accountability are established so this never happens again.

This is what I want my banks to look like in the future: They have no ARMs but it do have STRONG LEGS to stand on!

[DB]

Shana, Amen. Like you I have always been responsible with my my dept. When my husband and I bought our home 15 years ago we bought a home that was only a fraction of what the bank said we could afford. I have mega mansions going up around me with families of 3-4 people living in them. Why? Do they really need all that space. Or is it just greed? I drive a car that is 9 years old. It still drives well and as long as it does I figure why take on a car payment. I have had people say "when are you going to get a new car?" I live by the mottos "If it's not broke don't fix it" and "make do." I have a 32" tv. Plenty big. Would a 50" plus plasma screen be nice. Sure it would. Do I need it? No. Now we have people who lived way above their means with no thought of how they were going to pay for it, and now they want others to pick up the tab.

This week I lost thousands from my 401k. Money that I had taken out of my paycheck every week. I'm a single parent, having lost my husband to cancer a couple of years ago, raising three boys on my own. I have to wonder which greedy CEO, in which mansion in Greenwich, Ct is out golfing on my savings. It absolutely galls me how much these guys get paid and how huge their severance packages are. What have they done to earn any of it? Absolutely nothing.

Next year I send my oldest off to college. I can't even think about the financing. The student loan arena is such a mess.

The greed in this country is just out of control. Unfortunately it looks like all of are going to be stuck paying the bill.

Dianne