What was the beginning of the END in 2007

[hohenwald48]

The bottom line rests on personal responsibility.

Efforts to explain how the banks, wall street, government, lenders, schools, employers, foreign turmoil or the alignment of the stars are the cause of your problems are just a way to push the responsibility off on others. Regardless of regulations or any outside group, nobody has ever forced anybody to over extend themselves.

If you can't live on what you make you likely need to examine your own choices. Do you really need cable TV, high speed internet or a $1,000 smart phone with a $150 monthly plan? Do you really need a 4,000 sqft home? Do you really need a new car? And do you really need a $150,000 RV? If you can't live on minimum wage working 25 hours a week maybe you need to increase your income or get a second job.

Personal stories of success and failure abound. Remember they are "personal" and usually can be traced to personal responsibility or lack of personal responsibility. People will go to great lengths to poo poo the fact that their own choices have the greatest impact on their situation.

There are isolated instances of folks who have financial problems thru no fault of their own and there are isolated instances of folks born into riches. However, most cases of financial failure or success that I know of can be traced to the actions and decisions of the individual.

[G.G.]

Originally Posted by hohenwald48

The bottom line rests on personal responsibility.

Efforts to explain how the banks, wall street, government, lenders, schools, employers, foreign turmoil or the alignment of the stars are the cause of your problems are just a way to push the responsibility off on others. Regardless of regulations or any outside group, nobody has ever forced anybody to over extend themselves.

If you can't live on what you make you likely need to examine your own choices. Do you really need cable TV, high speed internet or a $1,000 smart phone with a $150 monthly plan? Do you really need a 4,000 sqft home? Do you really need a new car? And do you really need a $150,000 RV? If you can't live on minimum wage working 25 hours a week maybe you need to increase your income or get a second job.

Personal stories of success and failure abound. Remember they are "personal" and usually can be traced to personal responsibility or lack of personal responsibility. People will go to great lengths to poo poo the fact that their own choices have the greatest impact on their situation.

There are isolated instances of folks who have financial problems thru no fault of their own and there are isolated instances of folks born into riches. However, most cases of financial failure or success that I know of can be traced to the actions and decisions of the individual.

Bingo!! Very well said.


You ask about needs? But, but, but...I really WANT that 4,000 sf house, and I should have it because I WANT it. The bank said I could afford the payments, so I guess I can. I'm not going to plan for a day that I might lose my job or get really sick. I want it now!!!

[TechWriter]

Originally Posted by hohenwald48

The bottom line rests on personal responsibility.

Efforts to explain how the banks, wall street, government, lenders, schools, employers, foreign turmoil or the alignment of the stars are the cause of your problems are just a way to push the responsibility off on others. Regardless of regulations or any outside group, nobody has ever forced anybody to over extend themselves.

Many of those subprime folks didn't know they were overextending themselves. Mortgage brokers weren't always asking for income verification. Also, adjustable rate mortgages made getting a mortgage easy. Sure, these home buyers should have been smarter, but that's easy to say when the "experts" (brokers & real estate agents) tell you that you can afford it.

On the other hand, financial institutions were selling incredibly speculative financial instruments (mortgage backed securities, credit default swaps, etc) that were -- to say the least -- very very risky. For example, AIG had assets of about $1 trillion before the financial crisis, but in 2008 it lost $99.2 billion. Credit default swaps made up about $30 billion.

Where was AIG's "personal responsibility"?

The financial meltdown was caused by a number of factors, individual home buyers being just one.

Remember, financial institutions received government bailouts for their irresponsibility, home owners didn't get a dime.

[PJStough]

Originally Posted by hohenwald48

The bottom line rests on personal responsibility.

Efforts to explain how the banks, wall street, government, lenders, schools, employers, foreign turmoil or the alignment of the stars are the cause of your problems are just a way to push the responsibility off on others. Regardless of regulations or any outside group, nobody has ever forced anybody to over extend themselves.

If you can't live on what you make you likely need to examine your own choices. Do you really need cable TV, high speed internet or a $1,000 smart phone with a $150 monthly plan? Do you really need a 4,000 sqft home? Do you really need a new car? And do you really need a $150,000 RV? If you can't live on minimum wage working 25 hours a week maybe you need to increase your income or get a second job.

Personal stories of success and failure abound. Remember they are "personal" and usually can be traced to personal responsibility or lack of personal responsibility. People will go to great lengths to poo poo the fact that their own choices have the greatest impact on their situation.

There are isolated instances of folks who have financial problems thru no fault of their own and there are isolated instances of folks born into riches. However, most cases of financial failure or success that I know of can be traced to the actions and decisions of the individual.

You missed the point I made. Lenders did not care how much money applicants made because they knew they could sell the loans and make their money. Lenders knew they were making bad loans.

[tcg]

Originally Posted by hohenwald48

The bottom line rests on personal responsibility.

Efforts to explain how the banks, wall street, government, lenders, schools, employers, foreign turmoil or the alignment of the stars are the cause of your problems are just a way to push the responsibility off on others. Regardless of regulations or any outside group, nobody has ever forced anybody to over extend themselves.

If you can't live on what you make you likely need to examine your own choices. Do you really need cable TV, high speed internet or a $1,000 smart phone with a $150 monthly plan? Do you really need a 4,000 sqft home? Do you really need a new car? And do you really need a $150,000 RV? If you can't live on minimum wage working 25 hours a week maybe you need to increase your income or get a second job.

Personal stories of success and failure abound. Remember they are "personal" and usually can be traced to personal responsibility or lack of personal responsibility. People will go to great lengths to poo poo the fact that their own choices have the greatest impact on their situation.

There are isolated instances of folks who have financial problems thru no fault of their own and there are isolated instances of folks born into riches. However, most cases of financial failure or success that I know of can be traced to the actions and decisions of the individual.

I don't know, a lot of people were living within their means when the stuff hit the fan. They had a rainy day fund only the rainy day turned into months and then years of torrential rain storms.

I think there were a lot more than isolated instances of people losing everything through no fault of their own.

[ScoobyDoo]

To start, whenever I hear something like

The bottom line rests on personal responsibility.

I hear "I got mine, if you can't get yours, it's your fault!" And many times, a little checking you find he was born on 2nd, or maybe 3rd and when he scores thinks he hit a home run...

Efforts to explain how the banks, wall street, government, lenders, schools, employers, foreign turmoil or the alignment of the stars are the cause of your problems are just a way to push the responsibility off on others. Regardless of regulations or any outside group, nobody has ever forced anybody to over extend themselves.

Many many people understand work, but know little about money management. And when they go to a expert, they are told they can spend this much for a house payment.
And somebody working, living within their means, pays a adviser to tell him what investments to make to save for retirement. In most places it is legal for the adviser to steer the investor toward investments that make the adviser, not investor, the most money.
Then there are decisions that are good or bad depending on when made. Example; Kid graduates high school, borrows money for collage. In 1993, that was likely a good idea just comparing the average lifetime income, HS to collage grads. But look at the kids that made the same decision in say 2003. Owe as much as grandparents paid for house, move back in with parents, if their house is not foreclosed..And what can we say to the grads this spring?

If you can't live on what you make you likely need to examine your own choices. Do you really need cable TV, high speed internet or a $1,000 smart phone with a $150 monthly plan? Do you really need a 4,000 sqft home? Do you really need a new car? And do you really need a $150,000 RV?

On this we agree.

If you can't live on minimum wage working 25 hours a week maybe you need to increase your income or get a second job.

Another statement that on the face sounds like a great idea. But, if the people would look at the reality of most part-time minimum wage jobs the hours are not fixed week to week, or even day to day. Do you really think that a employer who does not want somebody to take off work when sick will hire with the understanding the work schedule will have to mesh with another job?

Personal stories of success and failure abound. Remember they are "personal" and usually can be traced to personal responsibility or lack of personal responsibility. People will go to great lengths to poo poo the fact that their own choices have the greatest impact on their situation.

There are isolated instances of folks who have financial problems thru no fault of their own and there are isolated instances of folks born into riches. However, most cases of financial failure or success that I know of can be traced to the actions and decisions of the individual.

I know for a fact that bad decisions I made have limited my lifestyle. But when you add up the number of people that made "good" decisions, got the good job worked every day for a wage and a promise that after so many years we will pay you the rest of your life... Bankruptcy, management keeps everything they "earned", workers?
Bakery can't pay the interest on the new building, (Short the yearly pay of the top 3 excs) closes down. Opens within a year, new workers paid about 1/3 what old where, same management team...
Small contractor company bids and gets job to do part of the work building a new hotel. Buys the material, pays the help, all overhead to run his business, does the work. Sorry, I can only pay 25% of what I promised.
If somebody paid attention to all the "personal stories" it would be real easy to get the idea that the deck is stacked against people that work for money, in favor of them who's money works for them...

[redhooker]

I agree with much that has been said above about items that led to the bust. I have a slightly different perspective on things though.

I believe the real reason lending loosened up is because the top 5% of america (which includes the big investment firms, not just individuals) were buying up mortgage backed paper like crazy. The huge demand backed by billions if not trillions of dollars drove the loosening of regulations. The banks couldn’t supply mortgage backed paper fast enough. These investments were what made up most of your “safe” catagory funds that you might generically choose on your 401k.

Yes a lot of people made poor decisions spending way more than that should on real estate, but that was a small portion of the money fueling the bubble when compared to what the big developers were speculating on. They too floated massive bonds developing projects that the CDDs were never collected on (until lately and now many homeowners are paying inflated CDDs to smooth those past losses). I also believe we would have recovered much faster if the big players were allowed to fail- and their assets snatched up for pennies on the dollar. That’s old-school capitalism.

Every bubble is different, who knows what will pop next. I personally have no fear of financing at the current artificially low rates. I wouldn’t pay off my mortgage a day early with my current locked rate, and have no qualms using other people’s money for a car or RV if I can get interest under 5%. Might as well keep my cash and let it work for me.

My personal opinion fwiw is watch the rates. When Uncle Sam slows his borrowing we will likely see rates climb (more than a little) and that will definitely slow consumers down.

[Smitty77]

Lots of emotions and opinions about what happened. Lots of Hollywood movie spinning. Lots of news agency spinning. Spinning? Well some spin things one way, other's spin them another. How to know what to believe...

Lots of opportunities to point fingers. A few include: Regulations forced down from congress to provide loans that normally would have never been underwritten; Greed by many layers of companies/individuals; Regulations ignored; Regulations changed; Wall Street/Banker's too friendly with politicians and regulatory agencies; Politicians and regulatory agencies too friendly, feeding at the trough, of Wall Street/Banker's; (Listed twice, but from two directions. As some were pulling, and some were pushing.) 125% LTV mortgages; Easy Credit Cards; Easy Bankruptcy; Keeping up with the Jone's; Entitlement; Lack of moral compass; Bad luck; Good luck; Etc., Etc.

Could it happen again? Of course! And not 'if', but 'when'.

Yes, bad luck or bad health accompanied by bad planning and self budgeting for rain days - does come into play for many.

But IMO, more often it is lack of personal accountability and acceptance that individuals are free to make good decisions, or bad decisions. Too often, it is the later that has caused an individual/couple - to get into trouble from a financial standpoint.

I really do believe in helping those who can not help themselves. Special Needs individuals should get all of the compassion and help a society can offer. I also believe that society should offer a helping 'hand up' to those who have had unfortunate problems occur (Health, fires, earthquakes, hurricanes/tornado, whatever.). But that 'hand up', I believe should have a max time limit. After that, I do not feel society should 'provide' for individuals indefinitely.

I keep suggesting to my family, that the only way to make lasting changes in society, is by exercising your right to vote the way you feel. Keep doing so, keep reaching out to your officials to let them know what is important to you. (And, for sure it's OK for it to be 180 degrees opposite of what I or my DW might feel or think!.

I also believe teaching our children personal accountability in life (Financial just being one part of this...), is important.

I have the capacity to ramble with long posts! But I've shared some of my perspectives, and will stop here...

My best to you all, and have fun, travel safe,
Smitty

[PJStough]

Originally Posted by Smitty77

Lots of emotions and opinions about what happened. Lots of Hollywood movie spinning. Lots of news agency spinning. Spinning? Well some spin things one way, other's spin them another. How to know what to believe...

Lots of opportunities to point fingers. A few include: Regulations forced down from congress to provide loans that normally would have never been underwritten; Greed by many layers of companies/individuals; Regulations ignored; Regulations changed; Wall Street/Banker's too friendly with politicians and regulatory agencies; Politicians and regulatory agencies too friendly, feeding at the trough, of Wall Street/Banker's; (Listed twice, but from two directions. As some were pulling, and some were pushing.) 125% LTV mortgages; Easy Credit Cards; Easy Bankruptcy; Keeping up with the Jone's; Entitlement; Lack of moral compass; Bad luck; Good luck; Etc., Etc.

Could it happen again? Of course! And not 'if', but 'when'.

Yes, bad luck or bad health accompanied by bad planning and self budgeting for rain days - does come into play for many.

But IMO, more often it is lack of personal accountability and acceptance that individuals are free to make good decisions, or bad decisions. Too often, it is the later that has caused an individual/couple - to get into trouble from a financial standpoint.

I really do believe in helping those who can not help themselves. Special Needs individuals should get all of the compassion and help a society can offer. I also believe that society should offer a helping 'hand up' to those who have had unfortunate problems occur (Health, fires, earthquakes, hurricanes/tornado, whatever.). But that 'hand up', I believe should have a max time limit. After that, I do not feel society should 'provide' for individuals indefinitely.

I keep suggesting to my family, that the only way to make lasting changes in society, is by exercising your right to vote the way you feel. Keep doing so, keep reaching out to your officials to let them know what is important to you. (And, for sure it's OK for it to be 180 degrees opposite of what I or my DW might feel or think!.

I also believe teaching our children personal accountability in life (Financial just being one part of this...), is important.

I have the capacity to ramble with long posts! But I've shared some of my perspectives, and will stop here...

My best to you all, and have fun, travel safe,
Smitty

The bottom line is still that had the bond rating agencies not lied about the mortgages being sold as bonds and had rated them properly, none of the rest of shenanigans would have happened.

[TechWriter]

Originally Posted by Smitty77

I really do believe in helping those who can not help themselves. Special Needs individuals should get all of the compassion and help a society can offer. I also believe that society should offer a helping 'hand up' to those who have had unfortunate problems occur (Health, fires, earthquakes, hurricanes/tornado, whatever.). But that 'hand up', I believe should have a max time limit. After that, I do not feel society should 'provide' for individuals indefinitely.

Smitty, this has nothing to do with the meltdown. Individuals were not helped. Financial institutions were given billions with no strings attached -- and this ain't no spin.

[Mr_D]

Originally Posted by FatChance

In addition to student loan debt (mentioned above) as a potential problem now, auto loans are also at an all time high. A new car loan today is about the same size as my student loan in the 70s. Add to that the huge loans feeding the booming RV market we all read about on this forum, and there is a mountain of personal debt that is unsecured or only secured with rapidly depreciating assets. That should worry anyone.

My step grandson is graduating from HS in three days. He got scholarships to a 4 yr college for $58,000 but the cost is $72,000 a year. The college wanted me to sign for the loan for the difference. I refused, but some friends did. No idea why, but I certainly wouldn't. I don't see him even completing the first year. Nothing is ever his fault, he doesn't like the teachers etc.

[bdpreece]

Something else I wonder if it is an early warning. We are looking to purchase a home/piece of property and have been using Zillow where you can put in a town for a search area and it comes up with little dots on a map that show all the houses for sale. I have been searching almost all of western Washington and Oregon and probably over 80% of the dots when you click on them show the properties are either foreclosures or pre foreclosures. Makes you wonder if things are worse than we know.

[TechWriter]

Originally Posted by bdpreece

I have been searching almost all of western Washington and Oregon and probably over 80% of the dots when you click on them show the properties are either foreclosures or pre foreclosures. Makes you wonder if things are worse than we know.

Nope. Nothing like 2008-2010 . . .

[tcg]

In my opinion, one thing that could have saved a lot of homes through that nightmare would have been if banks worked with the borrowers when things got tough.

I heard stories many times about banks not excepting payments that were short even by a few dollars.

In other words, if someone was 50 bucks short one month the bank would not apply the payment and report it as late. Once it's late, fees would start accumulating and it would snowball.

It's a very frustrating scenario.

Had more banks worked with customers to save houses instead of thinking taking them all back was they way to go this whole mess might have not lasted as long.

All they had to do was forgive some of those late penalties move a few payments to the end of the mortgage to give people a little time to catch up and houses would have been saved.

Sure, some people no matter how much of a lifeline you would have thrown them were not going to be able to keep their house but plenty of people just needed to get things back under control and continue with the mortgage.

Greed killed a lot of people financially.