I guess Indy Mac is just the beginning.
Paulson and Bernanke both have said the smaller regional banks are the next to fail.
90 being monitored right now.
That’s good news for those that are unemployed. The Fed will have to hire a bunch of people to print enough funny money to fund all these bailouts!!! The only teensy weensy problem for the rest of us is going to be the runaway inflation and the collapse of the economy!
Mike
I was just a snot nosed kid in the 70’s, but I’ve heard that it was a great time to buy RE because inflation caused housing vaues to rise. This caused some investors to buy for appreciation. Is that correct? Are RE investors in for some great deals?
Comparing what is going on now to the 1970’s isn’t really comparing apples to apples.
In the 1970’s we had inflation. But…that inflation was based on higher and higher wages. Those rising wages made it possible for people to buy homes with mortgage rates at 15% or HIGHER!! Ask anyone you know who purchased a home in the 70’s what their interest rate was. We have an entire GENERATION of Americans who mistakenly think home mortgage rates could NEVER rise to 15%. WELL GUESS WHAT??? It’s coming…and it’s NOT going to be good for real estate.
What we have now is called STAGFLATION. This occurs when growth is almost non-exsistant or negative, yet wages fall. Don’t let anyone tell you wages AREN’T falling. When REAL inflation is running at 10% and your not getting and 11% annual raise…wages are FALLING!!! Real inflation in MY BOOK is food prices, gas prices, heating oil prices, electricity rates, STAPLES of LIFE!!
The problem for the economy when you have rising prices and negative wage growth is …THE CONSUMER STOPS SPENDING!!! Want to know a business that is absolutly FLYING right now??? SEED companies. I’m not talking about big time farm suppliers. I’m talking about seed companies that sell to home owners. Ironic huh??
People are actually starting to GROW THEIR OWN FOOD. :flush
OH yea!! This recession should be over any day know!!
This is a direct result of the U.S. deciding to trade one bubble after another in order to shore up an economy that NEEDED a brief but strong recession. That didn’t happen…after the dot com bust, Greenspan opened up the money window with lower and lower interest rates, and Americans just borrowed and borrowed.
Last week my local newspaper had 289 Foreclosure listings in it. I picked the homes that were mortgaged BEFORE 2002 and went to various Town and City halls to examine the titles. Out of 56 potential properties (most of the 289 were purchased less than 1 year ago!!!) I DID NOT FIND A SINGLE HOME that wasn’t mortgaged to a price now unobtainable in this market!!! EVERYONE…UPSIDE DOWN!!!
The scariest part??? Most of these homeowners intially purchased these properties for a SONG!!! They remortgaged, then remortgaged again, then believe it or not remortgaged for a THIRD TIME!!! By the time they were done a home they ORIGINALLY purchased for $95,000…now was mortgaged to $325,000!!! :shocked :shocked :shocked :shocked
There is NO ONE to blame for this than our own citizens. These people did NOTHING with that money…NOTHING!!! They bought CRAP with it.
I just spent this weekend cleaning out a home I just purchased from an elderly man. I helped him pick through a lifetime of items. This man was 88. I filled a 30 yard dumpster with nothing but JUNK!!! This man had purchased consumer JUNK his entire life. Not one antique, not one old Winchester shotgun, not one bamboo fly rod, no collections of ANYTHING except FRANKLIN MINT JUNK!!! NOTHING but crap from Marshalls, Walmart and other discount chains. This is America in the 21 Century.
Right now…China and India have agreements with MIT, Stanford, Worchester Poly Tech, Cal Poly, and a host of our best engineering schools. That agreement allows professors from these Universities to go to India and China and help them set up NEW ENGINEERING COLLEGES based on the American model. Of coarse China and India are throwing TON’S of money at these American Universities for this assistance. But… We are cutting our own throats here. Right now, 2008…American Engineering Colleges graduate about 60,000 engineers a year. China graduates about 200,000, India the same…at this point in time OUR Engineers are still better…How long do you think that will last once they get their educational institutions set up the way ours are???
But wait you haven’t heard the BEST PART!!! The best part is the Nationality of those 60,000 Engineering graduates from U.S. colleges…
70% are from Foreign countries!!! But wait there’s more…Once these kids graduate from Colleges that YOU AND I fund with our tax dollars…THE UNITED STATES GOVERMENT MAKES THEM GO HOME!!! YEP absolutley 100% true. " Your here on a student visa, your done with school right??? Go home!!!"
We better wake up in this country and FAST!!! We are absolutely no different than the LOSERS we encounter everyday as real estate investors.
Sometimes I look at these dopes and just want to shake them!!! They remortgage their homes to a point were they can no longer afford a home that should have been PAID OFF BY NOW!!! Yet they have 3 new cars in the driveway, a built in pool, 6 cells phones (3 old ones and 3 new I phones) a house full of every piece of junk sold on TV, NO SAVINGS, and they blame EVERYONE BUT THEMSELVES!!!
Sorry for the rant guy’s but Cripes, these morons are MULITPLYING like RABBITS!!!
Sorry for the rant guy's but Cripes, these morons are MULITPLYING like RABBITS!!!
Yes, I agree that morons are multiplying like rabbits. However, deadbeats who are too lazy to work are multiplying like a roach colony. I see it every day - a 22 or 23 year old girl with 5 kids by 5 different men. It’s insane and we (the taxpayers) are paying for these lazy deadbeats and their deadbeat kids!!! All these entitlements, along with social security and medicare for the babyboomers are getting ready to reture ARE going to BURY US! This alone would have been enough to cause a depression - even without the housing crisis, sub-prime crisis, or runaway fuel prices.
Mike
Wow fdjake. That’s a lot to chew on! Thanx for the insight. It appears to me that if interest rates rise and people make less, it may be hard to qualify for a decent home even with good credit and money down. Perhaps that could pave the way for more owner financing, lease options, etc… If you offer better terms than a bank to a qualified buyer, there could be some good cash flow opportunities. I like the idea of getting monthly cashflow without the landlord responsibilities. What do you guys think?
Mike,
I’m a Firefighter…You think YOU see these nit wits everyday??
I get to see them at their finest hours…
OVERDOSED on herion, meth, drunk, beat up, ect.
My all time favorite LOSER story…
My Engine Company gets called to the cell block of the City Police Dept. for a injured/intoxicated woman. The Police Capt. meets us at the door and says…“Please get this LOSER out of my cell block” As we enter the hallway I notice womens clothes outside a cell. I ask the cop why she doesn’t have clothes on?? He says she took them off and threw them out of the cell…she’s naked! Now this is NOT an attractive woman. I walk down to the cell…sure enough, completely naked, doesn’t even ATTEMPT to cover up. I ask her if she would like her clothes??? Her response??? “TELL THAT COP TO STICK THEM UP HIS @SS” … So I say…Listen…I’m a Fireman, I’m not a cop, We’re here to help you. The guy’s on the rescue are pulling up right now. You treat us right, and we’ll treat you right… OK??? She nods…The cop unlocks the cell door…and I kid you not…She takes my arm like we’re walking down the aisle in church…Remember she’s COMPLETELY NAKED and has a bump on her head…As we walk past the cop arm in arm, she says…
“FINALLY…SOMEONE WHO KNOWS HOW TO TREAT A LADY!!!”
100% TRUE…As we say all the time…
YOU CANNOT MAKE THIS SH*T UP!!!
Great story fdJake! I could see it!
Propertymanager, I think the huge crisis in this country is the undereducated ghetto kids. Generations of out-of-wedlock babies. No young men with fathers. Gangs taking the place of families.
I’m hoping for a national WPA-type effort to turn around a whole generation. Schools that will feed, clothe, mentor and educate the underclass that otherwise will be on the streets doing drugs and gang-warfare. A whole new mentality for our youth.
I’ll vote for anyone who can do this.
It’s off the subject of bank insolvency, but it’s moral insolvency of our country to allow this to continue.
Remember the old Barry Goldwater cartoon? Barry Goldwater is lecturing a poor little black boy for not having had the sense to be born into a rich family like he was…
Furnishedowner
Furnished, you’re talking about fighting a tidal wave with a mop bucket. Numerous things have to change to turn this generation around, probably the biggest being peoples morals and values. Politicians can’t do much, they start off great, but lose their soul to big business who fund their campaigns, then they start catering to all these groups to get a solid base behind them. By the time they get elected they forget who they are/were.
Schools aren’t as effective because too many PARENTS don’t care. The teachers get paid nothing, so the really good teachers leave or never try. No home training + not valuing an education + teachers with their hands tied = one horrible generation.
Add to that the media, that has peoples’ moral values upside down and you have ONE HUMONGOUS PROBLEM. Won’t be solved by man that’s for sure. We’ve been trying for how many years and things keep getting worse. God help us.
I agree something needs to be done about the welfare system and the parents failing to properly educate their children and leaving everything up to the teachers. It’s not the teachers job to raise the children. But some of the kids born in the ghetto are not at fault and like you and I we never asked to be here but fortunately we have made to where some never will. Is it our fault that these kids will never make it, hell no. But the problem comes out when you try to point the blame at innoscent kids and calling them gang bangers. News flash LOSERS come in all races not nessarily blacks. Just like the Barry Goldwater comment… a child has no control of the enviroment in which they are raised nor do they have control of who their parents are the only thing that know is how to survive.
As much talking that you all are doing about this situation you should be running for office and structing up a plan to end welfare and get on the lazy folks. I agree we need to have some type of solution or program that gives people a certain amount of time to get a job and get off the system. That’s the only way it will ever work. As far as women having kids from 5 different fathers look at the TV shows during the day and you will see the same goes for all races.
That’s whats wrong with us today we are fighting each other and taking care of other countries that tax the hell out of us. For us to be so far in debt and basically having the ACLU run our country to downfall. I believe that we have lost the values on what this country was founded on. The war in Iraq alot of countries turned their back on us and all I can say that we should do the same to them. We have enough resources and power over here to survive.
These banks are just the beginning but we have been let all these other illegal aliens and terrorist over here. not paying taxes, social security and soon as they come over here pregnant or have a baby they are automatically citizens getting jobs that people have been trying to get for the longest. Until we get a plan and structure up a way to get out values back we are basically a country torn apart!
I thought that my job in healthcare was safe, but the town next to me (Dalton,Ma) has a mill that produces paper for making money! The name is Crane & Co. if anyone wants a job!
Crane has made the paper for the currency since the 1800s and has never, ever missed a shipment or have even ever been late with one.
I used to work about a mile down the road from them. Berkshire Bridge & Iron. We did a lot work for Crane & Co. when they expanded and needed structural Steel and grating around the “pulp pit”. It was about 110 degress and smelled like wet paper. On top of that, I had to cut & weld and muscle steel into place. Its good way to keep in shape! Ah, those were the days!
My brother is a Master Electrician for the company that does all of Crane’s work. He used to do 'most all of their work but got promoted…he used to do a lot of the high voltage/high amp work for the paper companies and the local ski areas…
Keith