Ack Recession!

I have lived through 2 recessions that I can remember already and I really don’t need a third. The thing is that our economy used to run in 30 year cycles according to our history books. Now we seemed to be on a 10 year cycle early 90’s recession and 2001 recession pointed to this. And this time we were only growing the economy for about 5 years! (2002-2007) So, the Fed didn’t improve the economy by lowering interest rates back in 2001-2003 they just sped up the cycle.  And what they are doing now may be speeding up the cycle even faster. What will life be like if we have alternating boom bust years every other year? This is getting a little crazy.

How do you plan for your retirement or family or future with a yo-yo economy?

How can you buy property not knowing if you will have a job in a year? Or be able to get a job in the US reliably in 10 years when they have all gone overseas to lower rent districts? Sure some people will, but what about the average masses? Even those with college degrees keep having to change direction into the flavor of the month job wise with these companies and not everything is a living wage.

I just don’t know where our economy is going considering we have opened the door ourselves on developing nations and are being hit hard by how it has stolen the majority of our growth and industry. We are left as a nation of 300 million luxury consumers that on average owe $128,000.00 each to the bank (per economist’s state of 2008) and will take everything out on credit to have the latest new stuff. When we can’t borrow anymore or pay the bills (like now) the economy will crash and people don’t have any savings to stay afloat. I call that false growth in the first place, but the markets don’t seem to distinguish between what they can falsley get you to buy into for a while before it crashes and real growth, nor do they seem to care.

Doesn’t it feel like 1929 to you sometimes?

Of course these are generalizations and you may not fit the bill at all here but it’s the generalizations that run the economy right now. And I think it’s sad. Our nation’s executives and business leaders have sold out to the lowest bidder and given our jobs away with no loyalty to the country which made all their wealth possible. All the while expecting us to mortgage ourselves to the hilt to keep buying their goods. Something has to change with corporate accountability in order for this to settle without a complete melt down disaster.  And stop blaming the American consumer. It’s not their fault. If they weren’t set up to fail by huge greedy businesses none of this would have happened.

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Paying off Mortgages

I am not sure how this is usually calculated, but I noticed that every month one dollar less is added to my interest payment on my mortgage and one more is added to the principle payment. It seems odd that it’s so exact like that. But with the aid of the pull down feature in excel where it keeps subtracting or adding one to the number, I was able to project out how many years it would take me to pay off the loan. If I pay $200 extra a month it is paid off in 16 years. $250 extra gets is paid in 15 years, $300 in 14 years and $350 in 13  years or $400 extra each month will shorten it to just 12 years. What’s the savings in bank interest payments by paying $400 dollars extra each month? $28,000.00. (I’m not 100% sure I am calculating this correct, but I’d bet it’s close. ) That is about how much a down payment I paid. So you get that back if you pay early and pay often. Now I just have to figure out the budget so that I can afford that. Heh.

The U.S. Mortgage & Lender Mess

The mortgage and lending crash just keeps getting worse. I don’t know which is worse, the people not reading the contracts they sign and not understanding the terms involved with a baloon payment or adjustable rate or the banks and financial companies offering such bad manipulative terms. It seems like no one really did any research before buying these properties and now they are all foreclosing. I was just reading that the number of forclosures has doubled in the past 12 months for the month of September year over year. Yikces! And they say this isn’t the last of it. How many people are going to be loosing their homes and foreclosed on at Christmas and over the holidays? This is such a disaster for this country as a whole and a little embarassing to the rest of the world. Here we are suposedly the most wealthy nation in the world and people are loosing their homes. It’s sad and it’s the result of people not doing adequate research and getting bad mortgage advice from predatory lenders. Do yourself a favor and stay renting until you have 20% to put down as a down payment on a home and then do your research and go with a lender who has lent to a friend who has not had any problems with their mortgage and has had it for more than 5 years.