...a rising probability of a 'catastrophic' financial and economic outcome. (1 Viewer)

[Goatman Saint]

Neither 100 percent morgages nor home equity loans are terrible in and of themselves. The lack of discipline of morgage lenders is a huge one. I know of people who make about $30,000 and got creative financing to get them into 300,000 homes. Whose fault is that? Another big problem is people wanting their mcmansions when a normal sized house will do. Do you really need those cherry cupboards, granite counters and marble flooring with floor heaters?

 

[efil4stnias]

Neither 100 percent morgages nor home equity loans are terrible in and of themselves. The lack of discipline of morgage lenders is a huge one. I know of people who make about $30,000 and got creative financing to get them into 300,000 homes. Whose fault is that? Another big problem is people wanting their mcmansions when a normal sized house will do. Do you really need those cherry cupboards, granite counters and marble flooring with floor heaters?

+1...

 

[SWJJ]

1. The US is still way, way ahead of everyone economically. We account for like 90% of the world's service exports and like over 50% of the world's goods exports. Not sure on the latter, but pretty sure on the former.

2. The dollar falling isn't necessarily a bad thing. It wasn't too long ago that everyone yelled "stop outsourcing jobs." Some still yell it. Now we're a little more competitive in the world market and businesses should/are producing more to sell overseas.

3. GDP is doing fine, which is pretty much the ultimate measure of an economy. When that starts to shrink heavily, then worry. Until then, buy American-- it's cheaper.

The rate of growth of our GDP has been shrinking more and more over the last 15 years or so. the GDP is only expected to increase this year by .3 %... Thats very close to stagnate.

Meanwhile China India Britian and Germany's growth rates of thier GDP's are increasing I believe in the order I listed (though Gremany may be growing faster than Britain)

Are we in immediate trouble? No, but the comforts and lifestyles that Americans have become accustom to will soon dissappear for multiple generations.

We will be in SERIOUS trouble in the next 30 years when all the boomers are no longer in the work force, and we have to provide medicade, and medicare for 10's of millions of people that were once privately insured.

If we wait until the GDP begins to shrink, and even wait until it begins to shrink heavily, it will be far too late.

 

[rob021275]

Neither 100 percent morgages nor home equity loans are terrible in and of themselves. The lack of discipline of morgage lenders is a huge one. I know of people who make about $30,000 and got creative financing to get them into 300,000 homes. Whose fault is that? Another big problem is people wanting their mcmansions when a normal sized house will do. Do you really need those cherry cupboards, granite counters and marble flooring with floor heaters?

HUD has been far too lax in policing what lenders have been doing.

If I am a lender, I've got nothing to lose if my "investment" is guaranteed by a government bailout via a post-foreclosure purchase of my over-priced and equity-lacking real estate.

Some of the blame needs to fall on the borrowers, however. Not enough emphasis/respect is given to how bad credit can ruin your life. Common sense should dictate that if you are going to walk away from something you have no intention of paying for, just give the property to the lender. It will at least save you some of the liability of the attorney's fees/filing costs of foreclosure (which are usually 10% or more of the note).

 

[SWJJ]

An undiscussed future for housing is when 80 million babyboomer start selling thier homes to move into assisted living facilities. Obviously not all 80+ mill will be moving out and selling very soon, but this will effect the housing market strongly starting around 2015 when the oldest of the boomers near 70 years of age....

 

[blackadder]

The rate of growth of our GDP has been shrinking more and more over the last 15 years or so. the GDP is only expected to increase this year by .3 %... Thats very close to stagnate.

Meanwhile China India Britian and Germany's growth rates of thier GDP's are increasing I believe in the order I listed (though Gremany may be growing faster than Britain)

Are we in immediate trouble? No, but the comforts and lifestyles that Americans have become accustom to will soon dissappear for multiple generations.

We will be in SERIOUS trouble in the next 30 years when all the boomers are no longer in the work force, and we have to provide medicade, and medicare for 10's of millions of people that were once privately insured.

If we wait until the GDP begins to shrink, and even wait until it begins to shrink heavily, it will be far too late.

That's part of the reason they're bringing the illegal immigrants -- to increase the count of worker bees who pay taxes.

The bottom line is that a significant portion of the "comforts and lifestyles" we've grown accustomed to have been financed by debt and underpinned by abuse of the position of the US dollar as the world's reserve unit.

We've lived beyond our means for a long time. We are going to be swamped by baby boomer retirement costs and ongoing Iraq expenditures in 5-10 years.

If we enter a prolonged period of sluggishness like Japan went through at the same time these expenses come due then we will see some interesting things, like our borrow-and-spend politicans actually having to deal with limits.

 

[TDH]

I expect a stagnant stock market for a generation or so while the baby boomers withdraw to fund their retirement and before their kids hit their prime earning years. I bet this was the real reason why they tried to partially privatize social security. The stock market is a beast that needs to be constantly fed increasing amounts of money to give an appearance of growth if real growth isn't happening.