Jan

19

Live Within Your Means

We have created quite the mess with this subprime debacle. We want to blame business,  business wants to blame the government, wall street is reeling.

Happy times

Unfortunately I think the slide has just started. Lets take inventory…

… Absolute Insanity …

I guess since it has been a while since the .COM insantity we needed a new means of losing our minds.

If you really think about it this has been nothing more than the old cliche “if it too good to be true it probably is”. The sad thing though is people actually made a great deal of wealth while many are now losing what little shirt they had to begin with. “I want it now, I’ll deal with the consequences later”.

Fact, is subprime lending has been going on for years. I remember when I was young, poor, and just starting out having a loan with HFC for a stereo and paying 25% interest.

Subprime lending for those of you that only know the buzzword is the market for those with “less than stellar” or “lack of” credit history. In exchange for outrageous interest rates and fees lenders will give money to people that have a poor record of paying it back.

Don’t get me wrong. Anyone, even the most disciplined person, can fall on financial hard times. The subprime market can be a means of re-establishing ones credit. But subprime lending became sheer insanity that now has us heading into the crapper.

The exposure by major financial institutions into the housing subprime market is just staggering. It is hard to identify these institutions until they report staggering losses.

According to CNN state by state going back to 2005 the entire Puget Sound (Greater Seattle/Tacoma/Everett and surrounding suburbs) had a 22% exposure. Much of California (25% statewide) and Florida (30% statewide) deeply buried in a sea of subprime lending.
http://money.cnn.com/magazines/fortune/storysupplement/subprime_statebystate/

And here we stand today in all this chaos. All because people are not willing to live within their means. All because of the greed of business. All because our government turned its head because at the time the alternative was a slowing economy.

I think we should ammend the “if its too good to be true it probably is” to “If you have the means to get in during the bubble and out before the burst you can exploit and profit at the expense of your fellow man”

I think maybe Countrywide and a few others waited too long. Eh?

Jan

19

Payoff your house 7-8 years early the ad proclaims. All you have to do is front $100.00 and pay a monthly fee of $10.00. For this price you get to make 13 mortgage payments a year instead of 12. Here is a newsflash. You can make 13 house payments on your own, save the up front and monthly fee and still accomplish the same thing. Stay away from these programs, they are a waste of your money!

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