You ain't seen nothin yet. My generation will start taking money out of the stock market over the next few years to pay their over priced houses and other bills. The boomers are collectively broke. We have to look at a few facts to get some answers.
First of all it's the affordability index that matters. When I sold and bought real estate in the late 80's-, most people could afford a house around 80000 (payments of 450) on the median income of 24000. When this crisis began to develope in 2005-2006 the avg median household was closer to 44000. (Now you it's gone up to around 52000 .) Who amoung us making this much money can afford 2100 per mo. for a avg. house in California, Florida, or Arizona? let alone come up with 60000 for a down payment. Now throw in 500 for or more for cars, 250 for credit cards and add nutso gas prices? No one in their right mind would give these people more credit now that their piggy bank of a house they bought is upside down in value!
Let's just say that we ran out of suckers. Proof is in the stock market crash-down 40 % over a years time. The market ran out of buyers when speculation developed in oil futures and currency trading. Where else could all those trillions go when the debt parade hit a ditch. Fortunately we have a chance of benefiting from it. During depressions people who saved and increased their credit limits bought everything for pennies on the dollar. But wait. We are early in the cycle. Read my first paragraph. Until we collectively change our spend and borrowing ways, well......
What happens when interest rates hit zero or negative 1? Every thing booms again. Are you ready? All those trillions of printing press money has to go some where. Last time 2003-2004 it went into real estate and stocks. In Sept. 2001 that down dropped to approximately 8500. It just , after 7 years , hit that mark again this week. Are you getting the idea.
Hey, it's not over until it's over.
Wait until we discuss credit cards. Weee!!!!
First of all it's the affordability index that matters. When I sold and bought real estate in the late 80's-, most people could afford a house around 80000 (payments of 450) on the median income of 24000. When this crisis began to develope in 2005-2006 the avg median household was closer to 44000. (Now you it's gone up to around 52000 .) Who amoung us making this much money can afford 2100 per mo. for a avg. house in California, Florida, or Arizona? let alone come up with 60000 for a down payment. Now throw in 500 for or more for cars, 250 for credit cards and add nutso gas prices? No one in their right mind would give these people more credit now that their piggy bank of a house they bought is upside down in value!
Let's just say that we ran out of suckers. Proof is in the stock market crash-down 40 % over a years time. The market ran out of buyers when speculation developed in oil futures and currency trading. Where else could all those trillions go when the debt parade hit a ditch. Fortunately we have a chance of benefiting from it. During depressions people who saved and increased their credit limits bought everything for pennies on the dollar. But wait. We are early in the cycle. Read my first paragraph. Until we collectively change our spend and borrowing ways, well......
What happens when interest rates hit zero or negative 1? Every thing booms again. Are you ready? All those trillions of printing press money has to go some where. Last time 2003-2004 it went into real estate and stocks. In Sept. 2001 that down dropped to approximately 8500. It just , after 7 years , hit that mark again this week. Are you getting the idea.
Hey, it's not over until it's over.
Wait until we discuss credit cards. Weee!!!!
Plans swirl about how to save trouble global economy - Oct. 24, 2008
NEW YORK (CNNMoney.com) -- Governments and central banks of the world's leading nations have taken unprecedented coordinated actions in the past month to help out battered financial markets and economies around the globe.
Yet, the global meltdown in stocks continued Friday. And this lack of confidence and sense of panic has left experts wondering what can be done next to assure investors and get banks to operate normally once again.
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