March 18, 2008

Analysis of the Money Situation.

by @ 12:48 pm. Filed under Business

This CNN Podcast covers a lot in about 44 minutes and is worth a listen, in regards to financial planning for your household and coming economic events.

It is available in other formats if you go to the CNN Podcast web page and select “What’s the Real Deal?” But I don’t know how much longer it will be listed there. I don’t even know how long they’ll keep the podcast up 🙂 .

I thought one interesting piece of advice was to save with a Credit Union given the issues with banks. And this podcast was posted before the Bear Stearns bailout, but speaks right to that and other bank issues.

13 Responses to “Analysis of the Money Situation.”

  1. ncatina Says:

    I will definitely chekc this out…thank you!

    I just believe that what happened with Bear Stearns is just an extention of what happened to the majority of these sub-prime lenders that went extinct in the last couple years.

  2. IndependentConservative Says:

    But wait till you hear more details about how the government is “fixing” the problem…

  3. SteelGator Says:

    There is no safe investment. The closest to one is investing in gold. Not just the gold certificates, but you actually need to have the gold in hand. You can purchase the same amount of stuff with the same amount of gold today, just like 25-30 years ago.

    As for savings in banks, they always say FDIC will insure up to $100,000. That is bunk. If a bank fails, customers never get ALL of their money back. The government steps in to clean up the mess and liquidate the assets. Guess who keeps the profits from the sold assets? Right, the government.

    As for credit unions, they are considered not for profit entities, but they are regulated by the government as well. In fact, most credit unions don’t hold many paper notes. They might hold some automobile notes and/or small signature loan notes. However, their mortgages are sold to Fannie Mae, Freddie Mac, FHA, VA and secondary markets. Credit Unions have also made a ton of bad loans. They have just packaged and sold them out the back door on the secondary market to the likes of Bear Sterns and JP Morgan Chase.

  4. IndependentConservative Says:


    Good information.

  5. ncatina Says:

    IC, I’m afraid to hear what the “fix” is going to be.

  6. IndependentConservative Says:

    You might as well, because it’s already done and we all have inherited those bad loans. So you might as well know what’s going on the next time they do it.

    You’d never know the truth by looking at government officials’ faces on camera. They really hide the full magnitude of it very well.

    Economically speaking, things are just locked in a really bad spot.

  7. ncatina Says:

    I was never one to trust a politician, so I was never confident in their “proposals” for anything.

    For the moment, I thank God I am able to pay for everything I need in cash, sans the house, so as not to be robbed by these ridiculous interest rates for credit.

  8. SteelGator Says:

    To add insult to injury, many executives at Bear Sterns walked away with multi-million dollar golden parachutes. Why shouldn’t they have to give this money back to help bail out their failing company? Crooks.

    Another interesting note is that 97% of all home owners are paying their mortgages on time. That means 3% of all American home owners are not paying on time. If you listen to the evil, liberal media, you would not even know that….You would think half of Americans are behind on their mortgages. Just another lie put out my the liberal media to scare Americans into government dependency.

  9. IndependentConservative Says:

    BS, I was not trying to make a pun, but I just think I did :mrgreen: .

    Regarding the overall situation, not that I endorse what government has been proposing as “fixes”, but when the media says things are bad, they’re not lying: IMF’s report on credit crunch in 1 word: Bleak

  10. SteelGator Says:

    IC: They are not lying but they are always painting a much worse picture than it really is.

    I am in the real estate and mortgage industry. The stats I quoted are the truth. 97% of American Home Owners are paying on time. Also, most foreclosures get bailed out by the private mortgage insurance that lenders put on any loan over 80% loan to value. These PMI companies are the ones trying to say it is worse than ever. Why? Because the PMI companies are now having to pay out claims on mortgage defaults. For the last 20 years or so these same mortgage insurance companies have been collecting premiums without paying claims. Now the claims are large and they act like they can not afford to pay them. If this is true, two things are at play. 1. They did not set aside enough money in reserves to cover the claims (this is illegal by the way). 2. They have the money to pay the claims but don’t want to because it will cut deeply into their profits. Either way, these companies are killing the mortgage industry. Now, MI companies have tightened up so much that they are not insuring the government backed loans like they have in the past. Why? Because they got fat and happy and now paradise is an overgrown jungle. Instead of worrying about the lenders and brokers. The government should look at the MI and PMI companies.

    Here is a great article about the economy. Not as bad as IC or all the liberals gloom and doomers in the media would like to make it seem.

    Defaults on mortgage only .83%….This is under 1%. Defaults could go up ten fold and the banks would still be in good shape. Look at the numbers…..They don’t lie.

  11. IndependentConservative Says:

    I never heard “them” claim a given percentage of people had defaulted on home loans.

    If any event occurs that calls heavily on insurance it’s going to create issues. Just as when Katrina caused many insurance companies issues. They are not in business to break even 😆 .

    US recession more than likely – Greenspan

    But hey, Greenspan is just the guy who used to be head of the gambit called the Federal Reserve, what does he know…

    You’re focused on loan defaults, but if nobody is buying to match what is on the market, that’s a problem.

    U.S. Economy: Pending Home Resales Fell in February

    Pending US home sales tumble; optimism crumbles

    And the companies seeking government bailouts are not seeking it because PMI covered all the bad debt.

    Keep talking SG, everybody sees the facts when the go buy a gallon of milk and fill up their car with gas.

  12. SteelGator Says:

    Gloom and Doom….Greenspan is a great guy. If he is such a genius, why did he help get us in this mess?

    Percentage of defaults, right here from the article I posted.

    “Reason #1: Only 0.83% of U.S. mortgages are currently in foreclosure.”

    I agree there is a glut of homes on the market, but all that needs to be done is Fannie Mae, FHA, and VA loosen up the over tightened guidelines. If you are in the market for a home, the time is now. Great deals out there for anyone that can qualify.

    Another problem is that PMI is not covering much of the bad debt as they should. They are playing games with insured and it is on the verge of becoming criminal.

    The U.S. has been through a much worst energy crisis in the 1970s early 1980s. Gas is expensive but I don‘t see anyone slowing down on driving. If it is such a problem, those that are complaining ought to stop driving and/or cut back on their oil consumption. At least, there is still gas at the pumps. Do you want to go back to price controls and long gas lines?

    Come on IC. You are smarter and better than this. If you want to walk around all negative and gloom and doom, do so. I refuse to do so. Is the economy in a downturn….sure it is. However, it is not as bad as some would like you to believe.

    The problem is we as Americans are fat and happy. Even the poor in this country are better off then the middle class in other countries. I see people running through Starbucks paying $4 for a cup of Java. If the economy is so bad, folks need to quite purchasing the java juice and save money for gas or necessities like milk.

    Even in this downturn, the economy is stronger than it was back in the late 1990s early 2000s. You wouldn’t know that because the media never talks about a bad economy when a Democrat is in the White House. When a Republican is in the White House, that is all you hear about. The media bias is having a terrible effect on the psyche of the American people.

    Be upbeat and positive. Things will turn around…..How soon? No one knows, but it will get better.

  13. IndependentConservative Says:

    Isn’t “loosening” the guidelines what cause the sub-prime mess?

    I don‘t see anyone slowing down on driving.

    Truckers Protest High Gas Prices

    I’m not saying I want price controls, the difference between you and I is that you feel the media is claiming a problem where you feel there is little or none and I’m showing you there is a problem, but you feel being honest is “doom and gloom”.

    However, it is not as bad as some would like you to believe.

    As I told you, we see the truth every time we go to buy ANYTHING. Nothing you claim can change what anyone sees themselves.

    Praise God you’re doing so well that you can’t see any MAJOR financial issue around you. The rest of us just happen to see a growing issue.

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