Sunday, April 06, 2008

SC6 Economic Report: The Economy and Housing..




The sky is falling!!! THE SKY IS FALLING !!!!! Sound familiar? Well, if you flip on CNN or listen to Democrats, that's how you might feel. So, to try and clear a little of the bullshit from fact about the economy, we here at SC6 are here to tell you the truth.... It's not as bad as some make you think.
For starters, are we in a recession? Maybe. But even if we are, it is so minor, that if you weren't paying $3.20 a gallon for gas, you wouldn't notice. Sure, we are definitely stalling, but the sky isn't falling. Hey, put that one to music...
The rule of thumb is if your neighbor is unemployed it's a recession, and if you are unemployed, it's a depression. Well, I was out of work, but since I'm back at work again, the recssion is over. Seriously, the holiday season and winter were tough. Jobs were not plentiful, and they're still not, but does that necessarily mean recession. Not quite. An economic stall is different from a recession.
But what about the job losses? Sure, unemployment is on the rise, and it probably will be in the short term. Why? Because businesses are slow to react to downturns. The economy slows down in November, and by January and February, businesses realize the slide will be more than a burp. Now that Spring is here, and Summer is coming, things will pick up, and in a little while, those jobs will be back. As slow as business might be to react, there is one thing that's even slower: The Government.
Here we are, about six months after the slowdown began, and Congress is trying to head it off. Of course, it's completely useless. The $150 stimulus package is a spit in the proverbial ocean of the economy. Their answer? Throw even more in... Democrats want to gve more handouts to garner votes in the Fall, and the Senate is looking into tossing $15 billion more to the states to bail out sub-prime mortgage 'victims'. Let's take a minute on that one....
This whole 'disaster' is the biggest pile of bullshit in recent memory. Let's recap the issue. After a decade of selling mortgages that require little or no down payment , which was dangerous enough, they make a program that almost guarantees that three years from now, you will pay about $500 a month more than when you first bought the house. And idiot homeowners, who thought that home prices would rise indefinitely at 6-10% a year forever, decide to take out one of these ridiculous loans. But what do they care? They get to live in a $400,000 house when they only make $60k a year - that is, until the inevitable happens. And it did.
The sub-prime crisis is not a national problem. Have you heard of anyone in Florence or Kansas or Wyoming losing their homes? Not really. This problem is limited to those areas where real estate prices are outrageous - the Northeast, California, Florida, etc. I have seen a few homes go into foreclosure in Hilton Head, but no oe puts a gun to your head makes you buy a house. I left New York 11 years ago for this exact reason, and a few hundred thousand others were smart enough to do the same. but , these areas have loud voices in DC, and now we have to bail them and the retarded mortgage companies as well.....
No, it's not as bad as the talking heads make it out to be. After all, they get paid to make news. The best thing about a downturn or recession is that by the time you determine you have one, it's just about over. The Fed has taken action to make lending more affordable, but there needs to be some tightening of the banking industry. I'm convinced that bakns are out to basically screw ordianary citizens to death. After this, and the crap I see with credit cards, i'm pretty sure they don't care about long term customers, but more about short term ripoffs. See, I'm not just a mindless, pro-business Republican.....
My advice for you? Keep working, save a little, throw some in a 401k, don't buy a house that's more than 3x your annual income, pay your bills on time, and stay away from credit cards whenever possible...
Here's a clip of financial advice from WC Fields about spending and happiness....
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3 comments:

going to see the mets tomorrow opening home game moye said...

not bad

Anonymous said...

401K or a Roth?

Mike Reino said...

From what I'm told, the Roth IRA is if you're approaching retirement, and the standard 401k is if you're younger.