I reckon I'd have to live in a commune and let someone else do the skinning :o
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I reckon I'd have to live in a commune and let someone else do the skinning :o
Again, I want to add some perspective here relating to the original question.
In the last 30 years, 3,006 banks failed in America. Of course, the failures were clustered about the late 80's and early 90's. The median bank size in that period (not indexed for inflation) was about $56million. Big failures were rare...and will also be rare today. The failures then were caused by three primary things:
- fraud in the early 80's by a Tennessee banker named Jake Butcher
- the oil crash of the late 80's affecting Texas banks
- the real estate crash and recession caused by Desert Storm and the credit crunch.
But, the banking industry survived and came out stronger from the experience.
We may have a recession (depending on how you define that), we will have more bank failures, and we will have uncertainty.
BUT, we have a lot going right and there's no need for panic.
Back to a prediction that I made in a previous thread, our current circumstances, what I anticipate gov't policy response to our current situation, will breed a renewal of inflation pressures unlike what we've seen in nearly 30 years. If we can get out of the business of policing the world, balance the budget, and become productive again, then we have hope.
Finally, there are plenty of ways for people with more than $100,000 to have more FDIC insurance without having to spread it out over several banks. For instance, retire account deposits are insured for $250,000 (a fact that many people don't know....) and there are ways to title accounts that increase the effective amount of insurance coverage
Dear Mr. Silver,
Thank you for your link. It doesn't do me any good though.
Is this reasoning more or less accurate as to Wachovia's stock price activity today.
Wall street estimates had Wachovia to lose around $2-2.5 Billion for this quarter. Their earning came out with stated loss in excess of $8.0 Billion. A far cry from the expected. Also they've cut their divident down to 5cents (right move) and their stock jumped around 28% on the news.
So is my assumption correct to say that Wachovia decided to bundle their loss (write-downs) into shortest time span so as to not have a negative report for too many quarters. Meaning they decided to lump the losses together and limit the bad reporting to one or two quarter(s) so that subsequent quarter reports would look good. Reporting going forward then would make it look like Wachovia is over their financial trouble. And this aggressive move makes it a darling on wall street? 28% gain one day is one of the biggest I've ever seen. I just don't have the time to read the 10k reports.
And what about reports of federal regulators making un-announced visit to Wachovia headquarters. Or is this false information?
And what is the difference between Wachovia and WaMu. Besides Mooney threatening a downgrade of WaMu. WaMu reported a loss of only $3Billion or so. And their stock price is in a range where I don't want to touch all that much.
Your thoughts as a banker is of great interest to me.
Thank you,
Smilingcat
The link simply shows that there is a way for normal people to achieve greater than $100,000 in FDIC insurance just in how they title their accounts.
I'll PM some responses to your other questions.
Gotta agree with Mr. Silver on this. Yes, it's an adjustment, but things were so far out of whack the other way for a while...remember? Did we get so comfy we thought that was normal? Shame on us!
See, that's why I had to hang onto my old Joy when I bought the new one (with a lot more vegetarian and ethnic recipes). They deleted the game recipes... and the bartender's guide. ;)Quote:
Originally Posted by tulip
I betcha skinning a squirrel isn't too different from skinning a catfish though. Except for the legs :D
We're a few weeks ahead of you (we already closed) but our situations are really similar. We could have bought a much bigger house that was further from work but we decided that a smaller/less expensive house that is bikeable/walkable to work, groceries, shopping was a truly sensible choice. It's nice to know that if the economy crashes and burns we'll be able to afford our little house and can leave our cars parked as long as necessary.Quote:
Originally Posted by tulip
The new trend in house purchases is toward smaller and more reasonable sized home and away from McMansions. I think this is a wonderful trend. My house is 1600sq feet. It's a beach bugalow built in 1939. 2 bedroom/1bath...with detached garage. if you've got two small cars it will fit but not todays midsized cars.
Well heck growing up in Utah, with many of my friends coming from a rather large family (6 or more kids), they seemed to have managed just fine with 3bedroom one bath or one-and-half bath sized house. typical square footage was around 1600 sq. feet. And if you grew up in a house with over 2,000 sq feet that was a luxury. BTW, I did ask my friends about the bathroom situation in the morning... My friends said forget about makeup in the bathroom! or doing your hair! 10min/kid and its still one solid hour of bathroom usage in the morning.
smilingcat
I'm several years behind both of you. I chose a small place near public transportation options, it was waaaaaay the heck below market value of similar units at the time. Messy, cluttered, crowded, unpainted ... the sellers had done nothing to stage the joint. Their agent was a moron not to tell them what to do (at least de'clutter, fix, clean and paint).
So here I am. :D
:::sigh::: I missed the housing bubble. I coulda done this remodel and sold the joint for over twice what I paid. Silly me. I did back to back to back to back CA AIDS rides, recovered my health and fitness, met Knott :D :) and had some great rides. No regrets.
Meanwhile to my peers/coworkers who chose bigger places in Vacaville, Sacto, Modesto ... with matching huge commutes .... I <3 my tiny 1.5 miles to BART condo.
I think people will always want to live in CA, the housing market will recover slightly somehow at some time. All I need is one person or family who's learned the lesson of living closer to work/transit.
I will have to check out that book (I think it's a book Animal, Mineral, Vegetable?) about water. For a while there, people were paying more per gallon than they were for gas. I think we have probably passed that. I think of that too, that water is often wasted as much as anything. We have water restrictions here in Mass where I am and I think I'm the only one that follows it. I thought that the other people had wells but no, they just don't care.
A few years ago, we hit a housing kaboom in Tahoe. If you had dirt, they would try and build on it. I won't go into the whole TRPA thing, but basically, there weren't many buildable lots so they ...made everything buildable. Building building everywhere. I couldn't understand who was buying these HUGE houses...we finally cornered a real estate agent at the local watering hole and she explained the 'no interest second' that people were taking out on their primary residence and then, either they were just figuring they would sell it in a few years because of the market (people were bidding over the asking price!) or they would just refi it or something before it came 'due' (ie they had to pay more on it or the interest went up). We didn't really get it. You would never really 'own' your house? on just paying interest only? What was going on...and like I said "this can't keep going".
And I guess that's what happened there. My house doubled in value of course, but no one is up for buying anything. There are people just loading up their furniture and shutting the lights out. It's crazy. My friend is telling me her neighbor is raffling off his house that he just HAD TO BUILD and ruin the lot with no intention of living in it. He just wanted to make $$$. So now there is a big ugly house with no one that wants it.
I remember back in the 90s when I bought my first house, they dug up everything on you, wanted all kinds of info, and it was much tougher. When I bought my current house in 2000, I think I just produced a w2 and tax statements for two years. It was over before I knew it.
To me, just that overconsumption was what made me realize this couldn't keep going on. It was like ....debt obesity? Or just waste?? And the more we build and build these huge malls on farmland, makes it less and less likely we will be farming anything on it? Has anyone else noticed that? Someone was reading me a list of stores that will be closing 'underperforming' stores. All I know is that there is a couple of stores that are under construction near me in Mass that aren't even going to open. What a waste...
We experienced the same thing. I remember my friends moaning about having bounced a check in college and how it was coming back to haunt her when she bought her house in 92!Quote:
Originally Posted by TahoeDirtGirl
We bought our first home in 2003 and we basically just signed a piece of paper...it was SO easy even though the price was kind of a stretch for us. Same thing in 2004 when we bought in NC.
We just closed on a house here in OR last month. VERY different experience. We are actually now buying a house that is very much well, well below our means and yet we had to dot every single 'i' and cross every single 't' on the paperwork. They even questioned the dates on a transfer of our downpayment. It left one bank on the 22nd and got credited at the second bank on the 21st (due to a midnight transfer and a difference of time zones) and THIS held up our approval! They wanted a 'reason' for it and proof!! All in all, in some ways the extra scrutiny felt totally unnecessary and yet it made us feel like the industry was finally getting back to the way it SHOULD have been all along.
Same here, we transferred $900 from a tiny credit union account to our checking account to help with our closing costs and they wanted print outs and a letter from the credit union saying this happened. They said "we need to know that it wasn't a gift". I'm glad we didn't just bring some money from home and deposit it.Quote:
Originally Posted by GLC1968
I had that same issue when I was buying a house in the 90s. They were trying to figure out if I borrowed money from someone to cover the closing costs. I remember asking when we were purchasing our house in 2000 if they needed a statement of my accounts and they just took the first one and never bothered looking at it again.
There was a very very interesting program on, either MSNBC or PBS (I only get 5 channels, it had to be one of those!) about what happened with the mortgage industry. They showed a speech by Bush where he wanted to see more low income people own their own homes, and so, the mortgage industry began doing 'reverse redlining' where 30 years earlier they had drawn these red lines around undesirable neighborhoods where they didn't want to fund. Now they were going in those lines and funding housing within those lines, but with not the best ideas, such as interest only loans. I wasn't aware of that, my anecdotal experience was with the upper middle class that were just spending out of control and just way over extended on loans and mortgages. I have yet to see any type of information where they compare the salaries of those going up for foreclosures. Is it what they were talking about on this program or is it the upper middle class and their McMansions? I would like to see some kind of demographic on it, I guess I haven't looked hard enough.
It was sad to see people that were really stuck, they had already put money into their houses and soon realized that their payments were going through the roof. I know that everyone should be paying attention and understand the terms and conditions of their loans, but on the other hand, what were these banks thinking? Couldn't they figure out that people weren't going to pay double their payment? That's the part I don't get. Or was it just the fact that the people that were doing left the mortgage business as soon as they made a scad of cash?
I keep reading this thread with a certain amount of horror. As a grad student with essentially nothing, the recession is scary enough. Seeing the word depression kinda blows my mind. As a history student, I've always hoped knowledge of the past actually does keep the same mistakes from being repeated (at the very least, the huge, devastating ones). I've done a little reading for the past couple of days (thanks for that article today Salsabike!) and I don't think we're headed for a depression. We do have a lot of work to do and I think many many people just got comfortable with all the things they could get over the past years.
When I graduate next year I'm terrified I won't be able to find a job, or I'll be laid off once I get one like one of my friends just experienced. I've already started looking. I'm reading more and more about how to keep my personal finances in check and stay out of debt. I watch some of my friends use their credit cards like there is free money on them. I know they don't make enough money to support the lifestyles they lead and wonder how much debt they have already gotten into. I'm trying to learn from others' examples, but it's hard when so many people still seem crazy irresponsible.
I think weathering a recession, even if it is a long and difficult recession, is part of the economic cycle. I'm ok with that. It's happened before and it will happen again. Hopefully, the issues this one is dredging up will actually lead to some change.
Besides, I don't really want to have to sleep in a tent on a commune and learn how to skin squirrels. . .but if I have to I better go find a copy of the Joy of Cooking from the 70s.
I saw a clip about something similar on The Daily Show. Jon had Richard Bitner on the show. He wrote a book called Confessions of a Subprime Lender and was talking about how the whole situation might have worked out if the government had regulated the subprime mortgages/lenders. And that when you let businesses regulate situations like that it just becomes one big casino.Quote:
Originally Posted by TahoeDirtGirl
Wow. My in laws gave us a pretty big amount of money for a deposit on our house when we bought in 2004. First it wasn't in our account, then it was. No questions were ever asked. I never really thought much of it, but it sounds like that would raise some eyebrows now.
Usually you have to show bank account info for three months prior to your purchase. That's how it's always been for me in my three house purchases. Otherwise it's considered a gift and is treated differently.Quote:
Originally Posted by maillotpois
Unless you could show where it came from (in our case, the sale of our previous home).Quote:
Originally Posted by tulip
When we purchased our first home, we used money received as wedding gifts towards the downpayment. We had to sign paperwork stating that it was from gifts and the largest of the givers had to write a letter as well. This was in 2003 - but we also had no home purchase history and I had very little career related job work (I was just out of my masters program and only employed for a few weeks). Plus, that home was a stretch for us, financially. In retrospect, I still can't believe how easy it was...even with all the things that now would be considered marks against us. And that was only 5 years ago!
When we bought our first house in 1986, they wanted copies of our college diplomas...
We didn't even attend our graduation, but they wanted copies of our diplomas:rolleyes:
Maybe it was just easier for us because our lender is our bank (Wells Fargo). Cut out a step, perhaps.
I'm a middle-aged single parent who has never owned a house.
I doubt I'd ever be able to buy one, either, cuz just this year I finally started making money at a REAL job and now I make too much to qualify for the downpayment grants our city gives single parents to help them buy their first home!
Of course, when I *did* qualify, I wasn't making enough to actually be able to afford the monthly mortgage payement, regardless of having a grant for the downpayment or not.
boogers.
And as the mortgage crisis comes to fruition, I'll be shoved right out of a mortgage through any bank. And my rent will continue to rise as people can no longer get loans to buy houses so demand for rentals goes up, and I'll never be able to save the $$ for a downpayment unless I start living in my car. (my rent for my apartment has gone up $300/month over the last 4 years)
I bet you can find a first-time home buyers loan out there somewhere.
It's sure a great time to buy a house. :rolleyes: Do you think it could simultaneously be a buyers AND a sellers market? ;)
I'll tell you a funny story, when I got my loan and closed the house sI had to fill out all the forms and jump through hoops including verification of employment. At the antique store I work for that's done by a fax. You wanna know that I work there? HR sends a fax.
The bank insisted, said other employees always gave her a toll free number and a pin code and she called to verify employment.
Trek: No, HR sends you a fax.
Bank: What about the toll free number and pin code?
Trek: That's to verify that I USED to work here, like to check a resume or references.
Bank: But everyone else gave me an 800 number and....
Trek: Was it this? 800-EX-EMPLOY and this pin code
Bank: Yes, they always gave that one
Trek: That's the number to verify that I used to be, no longer am, was, ex employed, fired, retired otherwise no longer there ....
Bank: Oh.
Trek: You've been HAD :o
She thanked me and of course I got a fixed loan.
As a student of history, I've become resigned to the fact that many people don't pay attention to history and make short-sighted decisions. Mistakes get repeated and we wonder why no one saw it coming; when things go well, we take more credit than we deserve.Quote:
Originally Posted by firenze11
I've also had the experience of coming out of school during a downcycle. If you're resourceful and flexible, you'll find a way to pay the bills and pay down any school debt. The first job (first few jobs?) might not be the ideal fit for what you went to school for, but even in the best of times it can take a while to find a long-term professional "home."
I think the current situation is really painful for people who are finding they are not able to meet their expenses as planned . . . I work with a woman who has been watching her investments lose value just as she's getting ready to send her daughter to college, and it's going to take a lot more of her savings than she would have expected a year or two ago.
If you have very little, then you have very little to lose. This could be a good time to start doing some long-term planning.
DH and I have talked a lot about how comfortable our life is right now -- we don't live extravagantly but we can definitely find ways to economize -- and on top of that we can make do with a lot less. There's a lot of comfort in knowing that we've done it before as starving 20-somethings with liberal arts degrees, and we could do it again if push comes to shove.
Our region is known for rice production and an Anheuser-Busch uses rice in the production of their goods.
In our local news last week, Anheuser-Busch was purchased by a Belgium company. What was disconcerting about this was the US dollar was too weak to defend the company against the Belgium buyout. This is what causes me to really think about our state of affairs. What if China steps up to the plate next? Saudi Arabia? What if Muslims get a foot hold on our soil and gains economic control while eroding our democracy?
WHOA THERE, NELLY! You are treading on dangerous ground with that one. I suggest that the moderators nip this in the bud.Quote:
Originally Posted by sundial
Or at least Zen should bring out her most heat-resistant mitts.
Yep, let's calm down. This is not about religion, race or country of origin etc. And I don't see what anyones religion has to do with democracy :confused:
There have been Muslims in America for a looooooong time, paying taxes, building companies and in public service. We're a diverse country .... and discussion group :)
And as for ruining democracy ... what's functionally left of the Bill of Rights nowadays anyway? According to my "disappearing civil liberties mug" (http://www.uncommongoods.com/item/item.jsp?itemId=13857) the NRA has managed to keep the 2nd amendment intact, and the 3rd still holds (no billetting of soldiers within the US). Property expropriation still requires compensation, and I haven't seen any cases of double indemnity yet. But the rest pretty much went down the drain in the "Patriot" Act. It may be like in the Middle Ages, that we have to count on the Muslims to archive all our old scientific and political knowledge until we lighten up enough to ask for it back. ;)
I do have concerns that other countries - having nothing to do with their religion - might already have economic roots. Yes, the foreigners getting the big beer company says something.
This means there might be even tougher times, tyrannies, nuclear war... I'm going to do my darndest regardless to keep my morals from being swallowed by my fear or anybody else's.
We have nothing to fear but fear itself. Fear drives people to be willing to support horrible things like wars and terrorism... and finding a way to categorize other peoples as something threatening and evil to justify the harm done to them.
Einstein said "Nationalism is an infantile disease. It is the measles of mankind." Or something like that. Boy, do I wish there were a vaccine.
I think she meant Islamists, not Muslims.Quote:
Originally Posted by tulip
Karen
The United States has had pretty deep "economic roots" in most if not all countries of the world since the Second World War. That has not necessarily meant tyranny for all the countries involved, although it has meant that for some. Americans (well, especially the richest of Americans) have reaped the benefits of a globalized economy for a while. Unfortunately, I am afraid that it is not the richest Americans who will pay the price when it is realized that globalization is not a one-way street...Quote:
Originally Posted by Geonz
Yes, Karen is correct. I should add I meant Islamic extremists. Sorry about the confusion.Quote:
Originally Posted by Tuckervill
Isn't it interesting how we often confuse or stereotype nationality or politics with religion.
Israeli does not necessarily mean Jewish (and vice-versa)
Arab does not necessarily mean Muslim (and vice-versa)
American does not necessarily mean Christian...
And neither Israeli nor Jewish means Zionist. And many (most?) of the American Founding Fathers were not Christian.Quote:
Originally Posted by Mr. Silver
It's infuriating and sad when outsiders make these stereotypes. It's even more so when insiders exploit them.
extremist views no matter who or what it is, is generally not good.
Islamic extremist are not the views of average Muslims. The average Muslim's concern is really no different than yours or mine. Quality of life, pursuit of happiness. Good education for your children...
As for Muslim extremists and their views, similar thing can be said about Christian extremists too. Look to the middle ages with Crusaders killing and pillaging. And bringing war and destruction to the Moors in Spain. Moors were actually more civilized than the Crusaders. Moors had utensils forks, table knives spoons... schools, libraries.. while the crusaders were still eating out of a bowl with bread and breaking food with their small knives used for hunting, warfare ...
King Phillip II of Spain was a meglomania and who used Christianity to conqure most of Europe. and oh not to forget, the Inquisitions. Do you dare to challange the words of GOD?? Look at Galileo
They are the faces of extremists and its not just limited to Muslims.
We also have extremists within Hindu religion... Buddhism unfortunately, is considered religion. It really should be considered a philosphy since it does not directly infer an omnipotent being of any kind. Nor does it have a central being whose wishes we try to live by. (okay so as it developed, pantheon of "gods" were created along the way.)
words, words and words. My understanding is the following
Islam is the name of the religion.
Muslim is the term applied to those practicing the Islamic belief.
Back to the depression related conversation
One of you was asking about the "crazy idea of interest only mortgage payment"
Here is a simple explanation:
This form of loan should only be used by those who have the ability to pay off the note in one lump sum. If you are able to secure a low enough interest rate, you are effectively freeing up the maximum amount of money from your loan. The money you didn't use to pay the principle can be used to finance other income bearing activity i.e. purchasing stocks with divident payout. If your loan interest is at 5% and you can get 8% return on your investment. you are coming out ahead by 3%.
So your loan is $1million. keeping it as a simple interest rate you would be paying $50,000 in interest only. but the same $1million would get you $80,000 in divident. You made $30,000 by borrowing money. And it didn't take into account of tax deduction on your loan. Clearly, the less money you spend on servicing the loan, the more money you will have from the divident payment. And this is one way of leveraging your money.
This is the basic premise of a interest only payment. It should never be used to get you to qualify for more money than you can really afford. Unfortunately, the basic principle and the reason behind the interest only loan was lost to those eager to qualify for a bigger loan. and they got into big trouble (because they had no hope of generating money for the principle. Their only hope is that the increase in valuation of your house or inflation to devalue your loan).
simple explanation. I hope this made sense.
Smilingcat
I thought measles were the measles of mankind :confused: :oQuote:
Originally Posted by Geonz