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Old 03-18-2008, 11:00 AM   #1
aimeecc
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Anyone scared about the economic crisis?

I didn't see any threads on it, but maybe I'm blind.

So, in a nutshell, Bear Stearns went for a pittance, the market continues to plummet, loans are getting harder to get...

I have a secure job. I have savings. But I'm worried. We have some $ in mutual funds that are declining, so we are thinking of pulling it all out before its worth nothing. Better to pull out now and loose $300 than to hope it will recover and loose even more.

I can't even find a decent CD offering more than 3%.

My hubby and I were going to buy a home, but decided not too. Markets still too unstable (CNN listed greater DC area in the top 25 locations to continue loosing real estate value, estimated 20% decline over the next 5 years - actually, it was #10). Also they want 10% down - which would take all of our savings. And I can't get a loan lower than 5.925 - and that one was an ARM, interest only, with 10% down! Talk traditional, and its more like 6.5%!

I'm really worried about this recession. I can only imagine if I didn't have job security or savings how I would feel. I worry about my brother - he in construction.

Anyone else scared?
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Old 03-18-2008, 12:23 PM   #2
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I paid 6.625% and about 10% down in DC 8.5 years ago, and that was an excellent rate at the time.

Of course, it was 6.625% and 10% of a much smaller number than it would be today.
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Old 03-18-2008, 12:24 PM   #3
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Not here.

My job seems to be secure. We are very busy now, and have a remarkable amount of business heading our way in the future. The next year is looking very busy. We're having trouble hiring enough qualified people.

As a consumer, stagflation would be no fun, but we could tighten our belts and make do just fine for a couple years.

The market is run by a bunch of over-reacting nervous Nellies, and it's a shame. I don't like seeing my 401k go down as much as it has, but I'm still 25-30 years from retirement, so this is no big deal.

The only thing we have to fear is fear itself.
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Old 03-18-2008, 12:28 PM   #4
aimeecc
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My last mortgage (my first one) was 6%, no $ down. It *was* 5.75%, but since I was naive I didn't realize the home would close late, it was raised by a quarter point for going beyond the 45 day lock or something like that. Lesson learned.

I just can't believe with our credit history and score we can't get a better rate.
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Old 03-18-2008, 12:33 PM   #5
aimeecc
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Quote:
Originally Posted by glatt View Post
The market is run by a bunch of over-reacting nervous Nellies, and it's a shame.

I read these articles that go something like this:
"The problem with the market is consumer confidence is eroding. The market is going to continue to plummet. Consumer confidence is gone. It wouldn't be as bad if there was consumer confidence, but the sky is falling and people need to bail out now but the problem is consumer confidence. Buy gold now, put all your money in safe saving but the problem is confidence."

Ok, so you tell me the problem is our confidence level, but then tell us the sky is falling? Its hard for consumers not to loose confidence and overreact.
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Old 03-18-2008, 12:42 PM   #6
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We've been very busy for the last six years, and I don't see anything changing. If anything, there are more job opportunities now then there were when I graduated in 2002.

If you've done a fair job of saving, you should be able to ride out a short bump in the economy.
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Old 03-18-2008, 01:29 PM   #7
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I worry about my retirement investments, my sons college savings investments... all tied to the market.

But I more worry about the US as a whole. I worry that more people will lose their jobs and lose their homes and not have health care. Its going to further the divide between haves and have nots. GWB seems to not care about the economy. It seems the more the fed tries to help the worse it gets.

And I have yet to understand, beyond greed, why gas prices keep rising. In the fall it was because of winter heating costs. Now its spring, and the prices are being raised because people are going on vacation. Come summer it will be raised again because of cooling costs, then right back to winter where it will be raised again for heating costs. Ok, when is it going to go down? If its spring and heating costs go away, why doesn't it decline? I know, a rhetorical question. Its because of greed. But how long can we keep paying these prices at the pump?
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Old 03-18-2008, 02:22 PM   #8
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Quote:
Originally Posted by aimeecc View Post
I didn't see any threads on it, but maybe I'm blind.

So, in a nutshell, Bear Stearns went for a pittance
BSC @ 6.47 today

JP Morgan got her for 2. Now that was a deal...

Hopefully The Fed is on top of things. To whit: I'm guessing that The Fed forced BSC to be sold this week to prevent the 'surprise' coming later after a recovery had already begun.
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Old 03-18-2008, 02:26 PM   #9
HungLikeJesus
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aimeecc - it's not just greed that is keeping the price of energy where it is (it's still not high, just higher than we've been accustomed to). Here is some more information.
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Old 03-18-2008, 02:28 PM   #10
TheMercenary
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Quote:
Originally Posted by aimeecc View Post
I didn't see any threads on it, but maybe I'm blind.

So, in a nutshell, Bear Stearns went for a pittance, the market continues to plummet, loans are getting harder to get...

I have a secure job. I have savings. But I'm worried. We have some $ in mutual funds that are declining, so we are thinking of pulling it all out before its worth nothing. Better to pull out now and loose $300 than to hope it will recover and loose even more.

I can't even find a decent CD offering more than 3%.
There are people here who are finance experts, I am not one of them but I do invest and understand the market and how it works. No offense but you would be a fool to pull out and cash in any investments at this time. The only people who loose out are those that cash out when the market plumets. History tells us that it will come back up no matter how low it goes. Just relax and don't panic. If you have a regular investment withdrawl each month let it go and do what it is supose to do, buy more when the market is down so when it comes back up you will gain. Hang in there. The people who need to worry are the ones who have to withdraw money to survive, ie. fixed income retirement accounts, or those who were planning on retiring this year, or needed to withdraw (with a plan of action) this year and were planning on using the options to do something specific. I may be wrong but do nothing at this point.
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Old 03-18-2008, 02:48 PM   #11
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The prices are smoothed out in the futures markets. You can buy a barrel of heating oil for next heating season, today, at a lower price than you can buy oil for right now. So if something happens in July that will increase the price, the price to the end consumer will rise based on more than just supply, and won't just fall back down either; it'll crawl back down. Speculators buy futures based on everything that drives any market, including fear and uncertainty.

The prices do go up due to greater demand, but reporters don't understand the futures markets, so they don't mention it and people can only assume hidden causes for inexplicable price increases and slow decreases. (Such as greed, which exists in all markets.)
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Old 03-18-2008, 02:51 PM   #12
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I worry about my retirement investments,
Stop now. You're young, you're still working, you will still be working for at least 2 if not 3 more recessions before you really need to move into retirement investment mode. A properly balanced and managed retirement account will make you nervous because of it's volatility through the years, but that is what makes it work.

Quote:
my sons college savings investments
May be valid concerns. How old is your child? Are we talking about the one year old? If so, then quit worrying and invest more into well managed growth funds after you log off the cellar - its a great day for you. If your kid is within a couple years of school then you need to go a different route.

Quote:
the market.
Do you mean the market that has made people ill with worry at their losses or the one that has gone on to set new all time highs after each recession? Hey look at that - it's the same market. Stocks have been the single best long term performer for retirement savings in every measurable time frame. Take a deep breath and actually think about what market volatility means to your everyday life. Not that much. Now remember that the talking heads on tv are reading all of their doom and gloom from a teleprompter because they don't even understand some of the words they're using. Let that deep breath out and go about your life.

Quote:
But I more worry about the US as a whole. I worry that more people will lose their jobs and lose their homes and not have health care.
Now that is a valid point. More people will lose their jobs and homes. That sucks from every angle but all you can do is what you can do - give a helping hand to those you can where you can - your community. More people without healthcare? That sucks too, fortunately there are safety net programs in place to help.

Quote:
Its going to further the divide between haves and have nots.
No it won't. The divide isn't dependent on a few dollars here and there. The divide has a stronger correlation to mindset than bank account balance. A few people have nothing. Most people have something. Some people have more. A few people have a LOT more. Don't like where you're at? Change it. You may not catch up to Bill Gates, but you might find away to remove money as a source of concern in your life.

Quote:
GWB seems to not care about the economy.
What's good old Dubya supposed to do? Lower taxes? OK, but that seems unpopular. Drop rates? Well, they are, but that is largely responsible for the mess we're in now. Greenspan completely dropped the ball the last time around. Lower rates spur inflation. Do you really want the dollar to be worth even less? The more the government tries to manipulate markets and economics the more things get screwed up. Corrections and recessions are supposed to happen. The greater distance we keep between the government and the economy, the better we'll be.

Quote:
And I have yet to understand, beyond greed, why gas prices keep rising.
The planetary demand on oil is expanding exponentially and the supply isn't increasing. The untapped sources within our control remain off limits because of fears for the environment. We have, as of yet, not found a suitable alternative energy source and the supply/demand equation has only recently made it economically desireable to develop it. Sad, but true.
Greed? Sure. Exxon and their ilk could slash their profit margins I suppose, but then they would lose investors. Then how are they going to expand and develop to keep up with demand? Oil futures are more important than the price today anyway. It is a price based on a future expectation of supply/demand. It's just harder to read from a teleprompter.

Quote:
But how long can we keep paying these prices at the pump?
You'll keep paying the price at the pump until you decide it just isn't worth it and find an alternative. Maybe ditch the FJ first for a Prius. Or maybe a Vespa. Maybe even a bicycle. Maybe you'll change the AC thermostat to 82 instead of 78. Maybe you'll just go without AC. The pain threshold will be different for each person, but it exists for each. Our automobiles and crisp cool houses aren't God given rights, they're luxuries. Just like our HDtv's. And vacations. and... get the point? It sucks but sometimes things happen that cause us to decide against a luxury. I'd like to returf the yard, but it just isn't in the budget right now. Maybe next year. Priorities.
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Old 03-18-2008, 02:53 PM   #13
TheMercenary
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Yea, what he said. Sounds like I am on target or at least near it. Good post LO.
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Old 03-18-2008, 03:20 PM   #14
HungLikeJesus
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lookout, that was a good summary of just about everything. No wonder they named a mountain in Colorado after you.
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Old 03-18-2008, 03:25 PM   #15
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I've never had the chance to visit Cold Calloused Prick Peak, but I hear it's nice.
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