Tuesday, September 30, 2008

One Way Street

I see the sheeplike press have taken up the politicians clever "Main Street" not "Wall Street" rallying cry. And Congress failed to act on a bailout bill that may have stemmed the nosedive our economy is taking (along with my retirement fund). Even I, a person without a shred of economic savvy knows that perception is everything when comes to people's spending habits. Regardless of whether the bailout would have literally helped, it would have given people some hope and perhaps got them spending again (cash not credit).

I don't claim to understand the nuances of sub prime lending or how it is bringing down major financial institutions. I do know that trading on Wall Street is like throwing firecrackers in front of sheep. They'll stampede in the opposite direction at the slightest hint of bad news. And with it goes our bank accounts and retirement funds that are inextricably tied to the value of stocks.

I have never been one to use credit cards to live. I hate being in debt. I have a mortgage, but it kills me knowing that I owe somebody money for my house. And with the panic of the latest economic situation, I probably couldn't sell my house if my life depended on it. One no one is lending and two, there is a glut of foreclosures out there that the vultures can swoop down on for pennies on the dollar anyway.

So I sit like everyone else, wondering what will happen and what it means to my family. Oh, and I don't give a rip about Main Street or Wall Street. I care about my street.


R. said...

Then don't use a lender. Work out an agreement with someone and if they default evict them and take the home back. Sure it's an increased risk to you without immediate cash benefits, but everyone else is in the same boat. Plus you'll be getting the interest not the lending company.

Karen said...

Hear Hear Tim. I know diddly squat about all this economic stuff but it's being felt all over the world. Here in Australia it's only worth billions instead of trillions, what do those numbers even mean to the common man? It is a worry though especially to those who are close to retirement and were relying on the money they thought they had to live.

Time said...

I'm not really interested in selling my house. If I was, I seriously doubt I'd try and carry the mortgage. One I'd need the money out of it immediately to buy something new and two, it isn't easy to evict someone.

It is mindnumbing when we think of trillions of dollars. I'm still boggled by the fact that our government borrowed billions from China. It doesn't help to see that Bush's approval rating is at its lowest ever. People should have realized that four years ago if not eight.

R. said...

tim id:
Like I said, everyone else would be in the same boat. You'd negotiate a deal with the owner of the home you're buying only at a lower interest rate than what you negotiated with the person buying your home so you can cover costs of potential eviction, asshattery and so on.

Then again, I wouldn't be suprised if this is illegal (for our own good of course, since it's best to leave important financial dealings like mortgages to professionals with government oversight to insure the economy stays healthy.)

R. said...

that should be ensure not insure.

Time said...

The post wasn't about me selling my house. The post was about the economy and how macroeconomics eventual affect us all.

If it was about buying and selling houses, I would point out that you just bought one and I seem to recall you ended up with a mortgage from a financial institution like everyone else.

R. said...

For the former: Well, I was just using your example to point out how things are going to change. People are going to have to do things for themselves instead of relying on the financial service industry that grew up around the booming times.

For the latter: The market was much, much different in May. We took advantage of the slush of foreclosed homes creating realistic property prices, the fed twiddling its thumbs on whether or not to raise interest rates and lenders twiddling their thumbs over whether or not to increase lending qualifications to get a great deal.

Anonymous said...

When Pap and I cut up our credit cards in the 80's because I could'nt stand paying the interest, I thought we'd have this fabulous, stable retirement. It never crossed our minds that the economy would deteriorate to such extremes that our grown children would still be needing help even as they creep into their 30's chipping away at our nest egg. We talk about it as a family, and have even tossed around the idea of all of us moving in together again commune style just to give the kids some breathing space.