Do you think people now understand the difference between 'liquid' and 'illiquid'?
Do you think people now understand that when the government encourages you to 'buy' something regardless of price, that those prices are artificially inflated?
Do you think people now get the fact that they should save, or face ruin?
Do you think people now understand that their government has lied to them, and that there will be no social security as promised?
Do you think people now grasp the fact that houses are risky investments, and not savings accounts or ATMs?
Do you think people now understand that they should never, EVER, trust someone on commission?
Some pretty basic questions, but if one good thing comes out of this crash it will be a generation who will save, who will no longer over-consume, who will educate themselves in regards to personal financial matters, and who will no longer see debt as a lifestyle.
Ignorance was not bliss.
October 15, 2008
So do you think people who 'bought' homes with leveraged loans now understand the difference between an 'asset' and a 'liability'?
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12 comments:
Sure:
An asset is something like a 401k plan where you spend your life contributing to it and then the government comes and takes it away to pay those who gave liabilities to people who couldn't afford them and to buy overpriced houses and mortgages
A liability is something like a mortgage where the government will come along and pay off half or more using money taken from other's assets, if you have no hope of paying it off yourself and the equity doesn't cover it
Keith, unfortunately the answer to all your questions is NO! Most people are slow learners. For the majority it takes years of hardship and living in a cardboard box before any of those ideas even start to sink in. We are still a very long way from this happening.
anon 9:16 says:
"An asset is something like a 401k plan where you spend your life contributing to it and then the government comes and takes it away to pay those who gave liabilities to people who couldn't afford them and to buy overpriced houses and mortgages"
Given government's current action it doesn't take a crystal ball to predict that government will impose a "solidarity tax" on future 401K/IRA withdrawls to fund those that didn't save. That will be on top of a higher tax rate to fund all the other nonsense we're currently spending money on. I will pull out all my money out of any retirement account the first chance I get. I will buy percious metal or move the funds off shore so gubermint can't get their thieving hands on it anymore. Plus I might get more social security since I didn't save any money of my own. It's sad that we live in a system like this, but you got to look out for your own good 'cos nobody else will.
It now appears almost certain that entitlements will be unavailable to anyone under the age of 50.
What the government crooks need to then do in an effort to make good...
...is figure out how much money an individual has paid in entitlements over the years, adjust this number for inflation, and allow that individual to take an annual tax deduction based on some amortization-like schedule.
Like a monkey understands a bout of dysentery.
I wish people thought homes were risky investments.
Here in Alameda, I cruise the open houses for fun, but see serious buyers out there.
Sellers still believe springtime will bring positive home prices.
I dont know why people havent figured out yet that the housing market ain't comin' back.
There are a few that understand what's going on, but most still don't.
HGTV is still showing programs with realtors referring to houses as investments and promoting 50K kitchen renovations that supposedly add 120K values to houses.
No, I do not think we have learned anything.
There is still a lot of optimism out there that "it's all going to turn around" and that it will all be solved in a year or so.
Consumer spending fell off a cliff in September. Either consumers have learned something or they're out of money. Probably a little of both. Looks like we're in the first REAL recession in decades. I wonder how the twenty-somethings who must possess every new gadget or game that hits the market will survive. And what about the kids who expect the latest, overpriced game console to be waiting for them under the Christmas tree. A lot of hard lessons will be learned in the next few years.
No, this is a nation of idiot in a world of sheep.
Soon HGTV will switch over to PTHCTV. It will have more redeeming social value.
Keith, how about that for a poll. Are child pornographers higher life forms than realtors or bankers?
NO my father in-law who is retired just referred to a HELOC as borrowing from your retirement.
An American just visited me. We were talking about the credit situation in the US. She works for a bank, pays a mortgage, and has over 100k in student loans. She equates the ability to make debt with freedom.
She says it only makes sense for companies to use their ability to carry debt in order to generate higher returns with the capital. I think that's also the idea with student debt. You'll get a job that pays so much more. I think it will come as a surprise to her, how long it takes to pay 100k back.
What a strange situation we find ourselves in when debt is freedom and having money in the bank is a waste.
Here's a really stupid question:
What ever happened to the FHA235 Starter Home? 3 BR 1 and 1/2 bath and carport. NO granite anywhere?
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