October 17, 2008 at 8:30 am
First I am angry that the government uses tax payer money to bail out the greedy companies to lend money to people who could not afford the house or car in the first place. Second they just showed the government gives money to AIG and the executes are enjoying their luxury vacations using our money. All the companies that the government bail out, the CEO still receives million of dollars even bonus.
This is the problem of our culture, people live beyond their means. If you cannot afford a house or a car, don't buy until you have the money.
As the big corporations, we should punish those CEO or high executives who made a poor choices by taking away their bonuses and millions dollars pay. BTW maybe we should send them to Iraq instead they go to all these luxury vacation spa to enjoy themselves.
Last time I check my 401K down 40%. I have a son going to college and receive no financial aid from anyone. I have to pay out of my pocket.
This is the life of the middle class, when everything goes down the drain, we are the one who suffers the most. We pay the most tax and receive no help.
October 17, 2008 at 8:34 am
celticfire63 (10/17/2008)
The good thing - and I would strongly encourage this - is that over the years, I have tried NOT to over specialize in any aspect of database work, with the exception of vendor, i.e., Microsoft. I have worked as a DBA, Business Intelligence consultant, Data Warehouse manager, Business Objects report writer, etc., and have been fortunate enough to find jobs in those areas. With this crisis, I was forced to scramble for a new job in Oregon again. With a diverse background, and help from God, I have no doubt(!), I was able to find a new job at the same salary within a week. Best of all, it is within 15 minutes from my home in the country!
I agree with this advice 100%. I was a tester on the sql product team for 6 years, and then spent 2.5 years at a startup as an asp.net developer / database guru. Just a few weeks ago I started at a large website company as a dedicated database developer. I have found that experience as a tester helps you to write better code. Likewise, experience as a database developer helps you to write scalable and performant code.
I am very thankful that the database field is in such high demand and short supply. When I was considering this recent job move I received an attractive offer from the first company I considered. My previous company gave a very compelling counteroffer, but it ended up working best for me to go with the transition anyhow. Something I have heard from my current and previous boss, as well as developer friends, is that it is extremely hard to hire to a great database developer. We're in a field that pays great, and the work is very interesting and challenging.
October 17, 2008 at 8:46 am
Like many who have posted, I bought my own first car $200!), and I still remember Financial 101 - spend less than you earn! My vehicles are paid off (18-year old GREAT car, several motorcycles), minimal credit card debt (as in I'll pay it down to zero next month), under $68 grand owed on the house, and enough in the bank to pay it off if I had to. So as long as the Federal Government doesn't fail (since they insure the deposits), I'll be okay.
The stock market doesn't worry me so much, since I'm a good 20 years from retirement, and it will build back up again. I hate that the news reports say "xxx TRILLION in capital LOST!!!" - that's bull. The only thing I've lost is my Washington Mutual stock (used to work for them, and they had an employee stock ownership program). If Iwere to look at the statement from when their stock price was $48 a share, you could say I lost over $60,000. But if you look at the price I PAID for the stock, it's more like $10,000. That's a big difference. So when the news throws out a figure on stock losses, cut it by a sixth to get a better indication of what's going on.
For the moment my job is secure. My company is in the Health/Welfare/Pension insurance industry, and we're upgrading systems to position for the current and expected growth. No one's crystal ball is reliable on the future, but even if I got laid off and couldn't find another job, I could live for a year at least just on the cash left if I also paid off the house (which I wouldn't, 'cause I like the tax write-off). I have a large yard with a garden, so I already grow a bit of my own food. I'd get a few chickens if the economy gets worse; eggs are good protein and I could share with the neighbors.
Panic is for people who don't know what to do. Which seems to cover quite a few US Citizens, when you look at the average consumer (credit card) debt. I finally heard a politician on TV state the obvious - to get out of this financial crisis, one of the things that needs to happen is for people to pay off their credit card debt. Lock the darned things in a drawer and just don't use them. It works every time. You spend less if you can SEE the money (cash or check). Suddenly that latte isn't as important...
It's still going to be tough on those that aren't in debt, but are living paycheck to paycheck just to buy the basics. They will be the first to take the hit, and the last to recover from it.
Oh, and on the car thing, Steve it sounds like you've thought it thru, which I applaude. Too many parent's don't really do that, they just gift a car and then can't understand why the kid doesn't take care of it. Having kids pay a "fair share" helps them appreciate what they have, and teaches them valuable life skills as well. And that training has to start waaay before 16. If you've done that already in your son's life, he already has the basis to understand financial responsiblity, and that puts him ahead of the crowd today!
Steph Brown
October 17, 2008 at 8:47 am
Loner, I agree. It really bites that these people play with our money, then when they lose it, we have to pay again to bail them out. There's no Darwinistic pain to punish them for their poor performance. England had it right when they did their cash infusion into their banking system: many directors got the chop. I just hope the US gov't turns a lot of those golden parachutes into lead.
I'm not too worried for my wife and me. We have the standard mortgage debt and paying off a 3-y/o car, but we don't have gobs of credit card debt. We should replace her car, but it's adequate for my commute, so she uses mine when she has to go to work (a hundred miles one-way, but she only does it ten times a month or so).
Work-wise, I had no plans to look for a while, and doubly-so in the current market. Perhaps the jobs are there, but it's not worth the risk if you're already off probation and with a solid company. Here, they accurately forecasted that revenues would be down and that they'd be hitting the reserves, but I haven't heard of any significant belt tightening planned. They didn't cancel my out of state training this week, and I haven't heard of my training in November and PASS being canceled, so keep fingers crossed and don't sell your stock now!
It's amazing how many people buy high and sell low.
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[font="Arial"]Knowledge is of two kinds. We know a subject ourselves or we know where we can find information upon it. --Samuel Johnson[/font]
October 17, 2008 at 8:56 am
I hate to be Dr. Doom but this financial crisis has opened the door to Socialism, hyperinflation, and high unemployment. In every country of the world, Socialism is a failure. Europe is a mess and we are headed to be France, only without the fine wine.
So what do you do to protect yourself? I ask myself, "What would Glenn Beck do?" Luckily he's answered it very well. http://www.glennbeck.com/content/articles/article/198/16799/
And vote for candidates for President and more importantly Congress, that are most in favor of small government and following the U.S. Constitution as it was originally intended. We've been flirting with socialism for nearly 100 years and it has finally led us to this crisis.
October 17, 2008 at 8:58 am
Kevin Wood (10/17/2008)
I hate to be Dr. Doom but this financial crisis has opened the door to Socialism, hyperinflation, and high unemployment. In every country of the world, Socialism is a failure. .
Forgive me if Im wrong but I thought it was capitalism that was failing this time round...
October 17, 2008 at 9:13 am
Well, unchecked capitalism is what's failing. Things were de-regulated, people found loopholes to make money and exploit the system, and now the proverbial chickens have come home to roost.
I don't remember which Congresscritter said it, but when they passed the bailout, he said "We can't have capitalism on the way up and socialism on the way down." I don't like the bailouts because, as I said earlier, it doesn't have a painful Darwinistic punishment for failure. Failure should hurt, it should have a penalty. But at the same time, the system has seized up, and it's going to take some work to get it flowing again. It's pretty much a Catch-22 situation, and as Steve and many have said, it's going to get worse before it gets better.
The question is, how much worse and how will it be manifested.
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[font="Arial"]Knowledge is of two kinds. We know a subject ourselves or we know where we can find information upon it. --Samuel Johnson[/font]
October 17, 2008 at 9:15 am
Um, no that's just mainstream media's interpretation and lying by Congress. Both parties brought us to this place. I know I'm really "out there" but Fannie and Freddie were "goverment backed" institutions and hence, socialistic. Check the definition of "moral hazzard" at wikipedia and look at the behaviors that the executives operated with. There was no deregulation of the banking industry during Bush's tenure as president. There was government corruption and forcing of banks to take on bad loans via organizations like ACORN.
We haven't had truly free markets in nearly 100 years. How many of you know what the Weimar Republic is? Well our current Treasury Secretary is sending us there. My advice to everyone is start studying history because, although history doesn't really repeat itself exactly, it does rhyme. Read the article in my last link and start with some of resources at http://www.glennbeck.com as well as http://www.campaignforliberty.com/. The party is over and it's time to gather our principles as to what makes us American.
October 17, 2008 at 9:16 am
My research on bubble markets and their crashes shows that those markets are typically "dead" for over 10 years. There are several periods in the 20th century where the growth of stock market indexes, in real value, was flat for approximately 20 years.
We've had 3 giant bubbles pop: the tech bubble, the real estate bubble, and now the stock market bubble, all transferred to the current bubble, the Debt Bubble. If the United States government wasn't already hopelessly in debt, we would not be faced with the impossibility of it ever paying off the additional debts and liabilities it is assuming. But, with almost $15 trillion in actual debt, over $55 trillion in future obligations, I don't see the U.S. economy's good times ever restarting, at least not in many people's lifetimes, and maybe never. Something as calamitous as this is how once great countries come to an end.
The U.S. is not the first country to be economically destroyed by its debts and it won't be the last. I remember a day in 1998 when I awoke to read that Russia's creditors refused to lend it any more money. It was bankrupt.
For the future, people should just plan on stagflation for a long time. Quality of life will suffer for all but the ultra rich.
Lee Crain
October 17, 2008 at 9:38 am
I've been pretty lucky so far. Pulled everything out of the stock market a week before it hit the top last year to pay off debt. All I owe now is for my house, and one car (a Mazda3 so not a huge loan). My car and motorcycle are both paid for. What it has affected me is that I will not trade that car in (1998 Explorer) in for 2 more years, instead of next year like I had planned.
Work wise? Who knows. I work for a financial institution, but luckily an extremely conservative one that 3 years back started to pull all their investments out of the housing related investments (including not investing in banks with huge home mortgage portfolios). The news I have seen in the company (external news releases, so nothing private) is that we have lost about 1% of investments in the last 3 weeks. So I think for now my job is safe. Also helps to work for a privately held company that does not have to rely on emotions for the stock value.
I think one of the things we have to get back to, is to require downpayments again to buy a house (or a car, or whatever). No more borrowing 100% of the "value" of your property. Force a cushion in the value vs. debt and foreclosures would drastically reduce. Yes it would mean not everyone could afford to buy that 4 bedroom, 2 1/2 bath house in the best school district in town.... So what?
October 17, 2008 at 10:10 am
The economic crisis is going to, and IS, a major problem for me. I am currently trying to re-mortgage the property from HELL - a light industrial lot with a legal non-conforming residential dwelling - and have gone through over 40 different lenders. I finally got a mortgage approval, but now they're demanding more and more information daily in light of the economy. Wouldn't be a problem if it wasn't things like; doings taxes for a year in which I've been primarily a contractor and have to claim my own taxes.
And then, in March, my Condominium comes up for renewal as my 5-year fixed-term mortgage comes to an end. I don't see the situation being any better by than, and could potentially end up with an exponential increase in interest rates. And have to raise the rent on my tenants, for which I can only adjust by a certain percentage (small) annually according to the standard tenancy agreements.
The next 6 months will be the death of me!
October 17, 2008 at 10:17 am
For every bad loan made out there, or "forced" to make to people that couldn't afford it, there is a bad loan made by someone looking to get a commission by loaning a "no document" loan. It's not all socialism, but some of it may be.
Unchecked capitalism is as bad as highly regulated socialism. Don't get too caught up in blaming any one thing.
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October 17, 2008 at 10:29 am
I work in the entertainment industry so it's not looking that bad, and I didn't buy a house when I had the chance so I didn't get caught by the high prices and variable interest trap. Since I live near Los Angeles the cost of living is very high but not too bad yet. When my credit cards get payed off in about 3 years or so I'll be able to buy a house at a reasonable price. We'll see how long this takes but I'm not looking to move house or job any time soon.
October 17, 2008 at 11:14 am
Steve,
Certainly there are bad capitalists. There are those who make use of loopholes legally, although unethically. There are those that are downright criminal and build wealth through lies and propaganda. I hold these people with even lower regard because they bring about the demand for greater oversight and regulation. Because the only thing governments do right is create unintended consequences, the cycle spirals out of control.
What are the principles by which society and government should work? The principles of freedom, liberty and responsibility. My freedom ends when it impinges on your freedom and that is true for an individual, a marriage, a business or a government. I know this sounds simplistic, but violation of this principle is the sole reason for the human condition on planet earth.
October 17, 2008 at 11:49 am
Kevin,
Agree with you here, but we're human and fallible. We make mistakes, sometimes we're malicious, though I hope we're more often respectful of others.
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