Do I need to worry? Economy going South?

dieselenthusiast · **Posted:** Fri Sep 19, 2008 10:33 pm

Should I be worried about the economy? Is this just a glitch and we are going through growing pains? Or is this a real-world crisis and our country is in denial to the point we could end up like the Great Depression?

Please refrain from politics so this thread doesn’t get closed or destroyed. I’m seriously wanting to know your opinions as I have money tied up in the stock market, land investments, and IRA roths.

jsc7002 · **Posted:** Fri Sep 19, 2008 10:35 pm

I read in the paper that our economy right now is the worst its ever been since the Great Depression

tjkj2002 · **Posted:** Fri Sep 19, 2008 10:45 pm

Though the whole economic idea is very political and this will probally get locked fast,all I got to say is...............

It was bound to happen sooner or later,it always does and goes in cycles just like evrything else.

dirtykj · **Posted:** Fri Sep 19, 2008 11:12 pm

Land investments? You'll have to wait quite a while ...

Stock market? It depends on if the choices you made were based on fundamentals or whether they were 'sexy' at the time.

IRA? Depends ... see above.

It's bound to get much worse and make the Great Depression look like a walk in the park. People are not jumping out the windows yet, but, why did you think the gubmint(s) ban short selling?

kskj · **Posted:** Sat Sep 20, 2008 12:38 am

This nothing compared to the savings on loan collapse in the 80's,Just a glitch.

Fulltimer · **Posted:** Sat Sep 20, 2008 1:04 am

As long as you have things spread out in different areas you should be okay. The FDIC can be your friend at times, so be sure you are covered. Yes, things are bad and may get even worse. If everyone keeps their wits about them it should work out.

Terry

Guest · **Posted:** Sat Sep 20, 2008 1:41 am

the FDIC can take up to a decade to pay you back, though, so I wouldn't just count on that.

I mean...really...our government is in debt...social security's in the toilet...they're going to insure us with what money?

dieselenthusiast · **Posted:** Sat Sep 20, 2008 8:52 am

dirtykj wrote:

Land investments? You'll have to wait quite a while ...

Stock market? It depends on if the choices you made were based on fundamentals or whether they were 'sexy' at the time.

IRA? Depends ... see above.

It's bound to get much worse and make the Great Depression look like a walk in the park. People are not jumping out the windows yet, but, why did you think the gubmint(s) ban short selling?

My Two remaining land investments are in areas that would cater to those who would want to build a retirement home, a get away cabin, or a second home. I sold my farm in Southwest Missouri last month. Contrary to popular belief, raw land has maintained its value and can not be compared to the housing market. Although, for the most part, the housing market has not been hit in the Midwest. From my experience, we’ve been living in a floating economy starting back in 2003. The banks and credit unions made it easy to borrow money. My inadequate debt to income ratio two years ago didn’t stop the banks from giving me a loan to buy a new vehicle, luxury RV, and another investment property. As long as my credit score was good, it was easy to get a loan. NOW, listen to my story. I’m wanting to trade in my 2007 RV for a smaller 2008 model. The dealership agreed that we would do a even trade. The dealership called my financial bank and said that they just needed to pay off my current loan and open a new loan for the same amount. I will actually owe less than before because I’m putting down money. And GUESS WHAT? Yep, my bank rejected the request to open a new loan. :shock:

They are not currently offering loans for “luxury items” unless if my credit score is over 730. Well, I fall short of 730, so I have to have my Dad co-sign. :oops:

In my 33 years, I have never had to have my dad co-sign. :shock:

PLUS, the bank is saying that my debt to income is not balanced, even though my debt to income is the same as it were two years ago when they let me buy a new vehicle, RV, and another land investment.

Anyway, here’s my point. The banks were letting people buy expensive cars and homes a few years back when decent credit scores were the only thing they really looked at. Banks made it easy to get loans at low interests. Credit cards with low APR’s flooded mailboxes. And finally, that floating market took all it could handle and is slowly (but consistently) taking a downward spiral. I’ve listened to many interesting round table discussions about the direction of our economy. Some believe we are going South in a hurry and we‘ll end up in really bad shape. Other’s say that we grew too fast, and now we must have these growing pains so we can continue to move forward as an economy. And lastly, some are reporting that we are moving to a more globalized world economy, hence China, India, and Europe are going to level the playing field and our days of luxury might be over. Interesting indeed………………………….

ATXKJ · **Posted:** Sat Sep 20, 2008 9:37 am

Well as you've just found credit is a big problem - and to the degree that you're using credit it will be a problem.
Business are generally okay - unless they marginal to start with and are using credit to survive.

actually home sales in California are supposed to be going up - because the prices are lower - but folks have to have the credit numbers and down payments.

(I had a longer post but it got too political so I killed it - but the entire mess is political - but both Rep & Dem - helped
Politicians would rather make a situation worse - than be seen as ' not doing anything' - is it too political to say they're all idiots)

The Staff · **Posted:** Sat Sep 20, 2008 10:19 am

I dare you all to keep this thread going without getting too political. :twisted:

dieselenthusiast · **Posted:** Sat Sep 20, 2008 10:56 am

ATXKJ wrote:

Well as you've just found credit is a big problem - and to the degree that you're using credit it will be a problem.
Business are generally okay - unless they marginal to start with and are using credit to survive.

You’re right, the way I have managed my money doesn‘t work with the credit bureau. I started investing in land as an easy way to make money, not to start a business. As rural (mountainous) prices in AZ and CA were getting ridiculously high, people started to look at mountain property in NM and found that it was just as beautiful and considerably cheaper. So I had a pretty good market. Unfortunately when banks pull my credit report, they only see my debts. They seem to neglect the fact that I have assets and vehicles paid off. They don’t care about my gold and silver or that I receive an income from the corn and alfalfa we sell. Anything tangible (livestock, collectables, antiques) are not highly considered unless you have a business or you can show recent appraisals and other forms of documentation. Two years ago the banks looked at my tax return to make sure that I had additional income coming in. This past week they said my additional income wasn’t consistent and could not be counted as adequate income. Like the RV dealership said, if I were buying a car, it would be no problem to acquire the loan as they consider a vehicle as a necessary purchase. Who needs a $40,000 dollar car, Oh, I almost forgot, it’s a necessity.

Again, I think the banks and those who are helping the banks have an invested interest. The financial institutions (in my opinion) aren’t in favor to help the honest little man.

JJsTJ · **Posted:** Sat Sep 20, 2008 10:59 am

Don't blame the politicians as much as the greedy masses that just had to have it all at any cost without thinking about where the money would come once payment was due. (that almost has a lyrical ring to it)

dog_party · **Posted:** Sat Sep 20, 2008 12:03 pm

dieselenthusiast wrote:

Should I be worried about the economy?

We should all, always be worried about the economy. We wouldn't have seen the housing "boom," or the .com lunacy if everybody had been more fiscally responsible. When I bought a house in 2004, EVERYBODY was telling me to buy "more house." Even my real-estate agent, who is a great friend of mine, commented, "With what you make, your debt to income ratio, and your great credit score, you could get so much more house than this." I didn't do it though, because I know how to manage my money better than the lending office or someone that is going to make money off me spending mine.

$0 credit card debt in my house. Has been that way for years and years. Learned that lesson, thankfully, at a young age. Anyone else have a Sears card as their first credit card? Boy oh boy, was that a quick wake-up call.

I believe strongly in pointing at the mirror. It is the only thing I have any real, immediate power to change. Our constitution gives us the rights to change and moderate the policy-makers that "serve" us. But I believe that power should begin in my own house. If I can't do it there, I shouldn't be part of doing it for the whole country.

InCommando · **Posted:** Sat Sep 20, 2008 1:41 pm

Sell everything you can for whatever you can get. Buy most remote property possible. Lay in supply of seeds & other survivalist gear. Hope for the best, prepare for the worst.

tommudd · **Posted:** Sat Sep 20, 2008 2:16 pm

JJsKJ wrote:

Don't blame the politicians as much as the greedy masses that just had to have it all at any cost without thinking about where the money would come once payment was due. (that almost has a lyrical ring to it)

X's two
everyone thinks or thought I am making X number of dollars today so I need and can afford the 3, 15 passenger vehicles and the 7 bedroom 9 bath house even though I have two kids! It has been more of keeping up with the Jones that got us into this, yes the banks were very easy to loan it to you, too easy as a matter of fact, but it was the people going into the bank and signing their name, no guns were drawn to make them sign! So here we are now sinking. I have not had a credit card in over 15 years, whatever i buy is cash when i buy it. I own land, stocks and have a pretty good state retirement plan, so I am just going to keep doing what I am doing and if I have to Tanzania is a great cheap place to live! :lol:

dirtykj · **Posted:** Sat Sep 20, 2008 2:25 pm

kskj wrote:

This nothing compared to the savings on loan collapse in the 80's,Just a glitch.

I'll see you again around this time next year :-)r

dirtykj · **Posted:** Sat Sep 20, 2008 2:27 pm

ThunderbirdJunkie wrote:

they're going to insure us with what money?

Oooh oooh!!! Let me!!! me!!!!!

They just bought papers from AIG I guess that makes them majority stakeholder in AIG (and if not not, then soon), that makes them in the INSURANCE BUSINESS too!

So THAT's how they're going to fix the insurance problem ;-)

dirtykj · **Posted:** Sat Sep 20, 2008 2:47 pm

dieselenthusiast wrote:

Contrary to popular belief, raw land has maintained its value and can not be compared to the housing market.

Are you referring to raw land zoned for agriculture? The value of raw land depends on the best use you can get for that land. And that is a matter of perspective, and can/will change over time. Its "value" estimate needs to reflect reality, the logic used to arrive at that value should be internally consistent, and the conclusions to the best uses should be defensible and supported by facts. These factors will change over time.

dieselenthusiast wrote:

Although, for the most part, the housing market has not been hit in the Midwest.

You can buy houses in Ohio for a buck ...

dieselenthusiast wrote:

Well, I fall short of 730, so I have to have my Dad co-sign. Embarassed In my 33 years, I have never had to have my dad co-sign. Shocked

The trick is to not need to borrow to begin with. Go in with statements showing your net worth, and tell them you can just as easily pay cash for it but you'd rather keep your investments somewhere that you get higher return from investment than it costs you to buy money from them, and you're just doing them a favor buy giving them the privilege to sell you the loan.

dieselenthusiast wrote:

And lastly, some are reporting that we are moving to a more globalized world economy, hence China, India, and Europe are going to level the playing field and our days of luxury might be over.

Globalization only works as long as it is cheaper to ship raw materials (if need be) and ship finished products back. As the rest of the current manufacturing economies improve the standard of living for their people, this advantage diminishes. Eventually the pain outweighs the gain, and it swings back the other way around.

InCommando · **Posted:** Sat Sep 20, 2008 3:49 pm

Unfortunately, Ohio & other midwestern states have been hit hard with tumbling housing prices & foreclosures. The county adjacent to mine has one of the 10 highest foreclosure rates in the USA. This has created a glut on the market of people trying to unload before foreclosure and lending institutions trying to sell foreclosed properties for anything that they can get.

Incommando is a reluctant landlord in said county because he was unable to sell a house, even when he lowered the price to 66% of the appraised value, an asking price equal to his purchase price in 1993. When 27 houses are for sale with a 1/4 mile radius of yours, it is a tough market & it does kill housing prices.

dieselenthusiast · **Posted:** Sun Sep 21, 2008 11:35 am

InCommando wrote:

Sell everything you can for whatever you can get. Buy most remote property possible. Lay in supply of seeds & other survivalist gear. Hope for the best, prepare for the worst.

When we lived in NM, we had our own log cabin which was pretty dang remote. The nearest town was an hour away. We heated our home by wood, had our own well, had honeybees, greenhouse, and garden. Once we finish our Masters Degree, (We should be done by this next summer) we plan to go back to NM or CO. and start the process all over again. One reason for buying a travel trailer is so we can live in it while we build.

Do I need to worry? Economy going South?

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