Tran Harry

How Bad Was the 1980s Real Estate Crash?

I'm not one to actually support real estate prices at the rate that they currently are, or currently were. The last 10 to 15 years of cheap borrowing just created an unhealthy market for real estate, and that has adversely created a storm of other expensive things that we have taken for granted.

With all the money that was ballooning in real estate equity people drove up the prices of other products such as medicine and everything out there is currently overpriced.

Why Mortgage Payments Should Be Lower Than Rents

Here is a clear example of how a home is a liability, the recent flood damage to homes in the Pacific region in Washington State due to rising water lines in the adjacent rivers. Many people did not purchase flood insurance because well that area of the land was not a designated flood area. Well times have changed, and the Government Engineers Corps released the flood waters to prevent a dam from bursting, leaving a bunch of people to suffer from 10-20 foot flood waters.

All their property is destroyed and they will have to rebuild their shattered lives. Their homes weren't assets, they will have to fix these homes because these are their places of shelter they cannot so easily move away. If they were renters their possessions would most likely be destroyed but if they decide to they could easily move elsewhere. Where is the asset growth ideology of owning a home if these home owners replace all their possessions only to have the flood come back next year?

In Chehalis, WA there was flooding occurring throughout the city, the same flooding occurred this year as well, all these people have damaged refrigerators, washers, dryers, etc. Just those 3 items alone not to mention foundation damage could easily cost $10,000 or more, so much for pulling out a HELOC to finance those purchases.

And for any homeowner in Chehalis, WA that I'm sure wanted to move out of there after last years flood, they probably couldn't because they were stuck with a home they had to sell with a buyers market, they were stuck.

seattletimes.nwsource....

This is really sad news that people don't want to allow their home values to lower even a few bucks, they had their use out of the home, it is a physical asset, therefore it deteriorates with time. So why not like Automobiles, if I buy a used car from someone say a 2001 Honda Civic from the original buyer I pay him LESS money than he paid to the dealer when the Car was considered NEW. USED USED USED, homes are USED, the owners got use out of it, they need to offload these things when they can no longer afford to hold onto them, such as during retirement or job loss, at a lower price so that someone else can tend to the asset.

Why Mortgage Payments Should Be Lower Than Rents

People are forever enslaved to the values of their home and rely on it as a tool for purchasing, investing, and retiring. This is one of the main reasons why they don't want to see their home values falling. Especially seeing as how many of the homeowners are the baby boomers ready to retire, they know a huge sell off of their homes will drive prices down but that is reality, yet they will do anything and everything to try and maximize their sales price.

We as the newer generation of 20 somethings have no control over this aspect except not to buy their crummy homes for over inflated values so that they can rest easy on their sale of a home they bought 20 years ago for $350,000 which they're trying to swindle off in some markets for over $1 million.

And if they can do this to retire, than there is no way that our generation will be able to retire owning a $1 million dollar home, unless we want our money to be the same as Zimbabwe's were in another 20 years the home will be worth $2 million. Face it that is fantasy, and not reality, and no one who has an intelligent brain will want to sign away their lives to pay off a $1 million dollar mortgage because they know with high mortgage loans, and low starting salaries they'll be working into their late 70's to complete their obligations.

The Wealth Effect of House Price Declines

Sounds like you still got a job. Congrats


On Nov 12 11:42 AM john1 wrote:

> Just more unpatriotic negativity from liberals who hate America,
> and freedom.

The Wealth Effect of House Price Declines

The spiraling vortex of falling home prices and the unstable job market are catalyzing the fall of wealth.

Sad thing is as people spend less, companies need to make less, and as companies make less, they need less labor. Resulting in a cycle that ends with job losses. But how can you spend if you don't have a job.

Our country has gone off the scale when it came to the thought that we were immune to economic fluctuations and the way we consume more than we ever produce anymore is idiotic.

Should We Really Bail Out the Big Three Automakers with $73.20 Per Hour Labor?

I meant to grab the reply for g.pincheot not missing link, sorry.

Should We Really Bail Out the Big Three Automakers with $73.20 Per Hour Labor?

It's called no one will buy it if they don't get paid that wage, because so many people have been trying to live above their means.

Go to anybody's house, and I been to quite a few seeing as how I use to work door to door for a research company, and you'll see regardless of what kind of income their pulling in whether they are retired, working at Mcdonalds and Target, or they're a small business owner and all the furnishings look the same.

By looking at a person's home and not asking them what they do in their lives you would not be able to tell someone who is earning middle income from someone who lives below poverty. They have the same digital camera, two computers, and a flat screen.

So you're saying that these people should continue to be paid $70 an hour to do bad work, and by bad work I don't mean they aren't qualified to do their job well, but I mean bad work as in the final product isn't competitive?


On Nov 12 11:39 AM missing link wrote:

> Actually, (TJIrish) indirectly, the unions share the blame for the
> big three not developing fuel efficient cars. The costs associated
> with the wages and benefit packages demanded by the unions is so
> great that the big three have had to divert most (if not all) of
> their research and development dollars into paying these excessive
> costs., so there is little money left to pay for research and development.
> In addition, the Japanese government paid for the research to develop
> the hybrid electric technology, then they gave it top their car companies.
>
>
> The big three have been placed in a position where they need to sell
> the big SUVs and luxury cars, because the profit margin on those
> vehicles is much greater than it is on small economy cars - and they
> need the extra profit margin to be able to pay the high union wages
> and benefits and CEO salaries.
>
> TJIrish: wrote
>
> "I work in a union. Not Auto workers. Soo hey full disclosure. But
> I want to ask anyone reading these posts a question. Is it the union's
> fault that the Big 3 did not develop energy conserving automobiles
> like the Prius? Is it the union's fault for the lack of imagination
> at the Big 3 in developing automobile's people want to buy? Oil is
> under $60 a barrel. We are in a terrible mess. People aren't just
> buying cars. Look what Best Buy said today. Toyota stock has taken
> a huge hit along with the Big 3. It's not just about wage cost per
> car. It's management imagination and creativity that is also part
> of the issue. I read along time ago in an auto magazine a critic
> who said none of Big 3 have any original ideas and just copy others.
> Witness the bailout proposal. Where did they get that idea from?they
> saw the banks get bailed out. Now they want to be bailed out. What
> happened to GM's plan to ride out the storm til 2010 when it would
> save billion's from union managing it's own healthcare? Which is
> also around time of the VOLT being mass marketed? So don't just blame
> the unions. Blame should be placed everywhere with the Big 3! "

Should We Really Bail Out the Big Three Automakers with $73.20 Per Hour Labor?

I think that the author is not so concerned with what a person makes per hour as long as the product is of value.

Which is where the line gets drawn in two ways, the automobiles being produced by the big 3 aren't competitive yet the wages they are paying are way beyond competitive. At other industries if your product is not competing well than labor gets laid off, they don't get retained in rubber rooms like the big 3's labor force.

Than you got the fact that these people are asking for a bailout when they're already making 2.5 times the earnings of your typical worker, and this number is 4 times higher than someone living at the poverty line. A bailout shouldn't be used to help fund their living situation if these people who earned $70/hr wage and benefits, couldn't figure out how to live a life well within their own means.

And that is exactly what we're trying to bailout, whether it is the worker, or the entire company, we are bailing out people who aren't competitive and don't live within their means, or as a company doesn't use that money to remain competitive.

I agree that the CEO's salary is way too high for an uncompetitive company. If a company is dying the CEO's salary and those of his upper management should be the first to suffer in a forward thinking society, yet it is the opposite way around, the CEO stays til the ship sinks while all the workers are being forced to lighten the load.

But seriously, do we really need the big 3 if they don't remain competitive? Which is hard to see them being so after their recent failures.

The Shallowest Generation

Wow that has got to be one of the best articles I have read in the past 3 months. One that tells it like it is, and gives it without holding anything back.

I agree on many points, the borrowing, the living beyond the means, the keeping up with the Joneses. It is all so very true.

It has come down to the fact that everyone believes in the American Dream, yet no one is ever working hard to pursue that dream anymore. We have all become sedentary in our lifestyles. We resort to creating recreational treats such as Viagra, and health food bars, all in the name of making us look more desirable and possibly more intelligent. While we kick back all the hard work and labor to other countries. We let them make the cars and the planes, and the milk and the toys. Are other countries literally taking care of our children?

We have become so blind to the fact that we no longer hold power in anything, we even got as far as believing that the average Joe needs to outsource their lives to another person in another country. Can we do anything anymore, does Jon Smith need someone in India to do their tax returns for them or what.

For the past 20 years the majority of wealth was created on the foundation of home values, whereas a country such as China has grown their wealth in taking all the jobs away from us. They took on all the "dirty jobs" there are barely any blue collar industries in America anymore and the ones that still exist only exist because we don't have teleportation devices to beam a plumber from Thailand to your bathroom and beam him back when the job is done.

Seriously, very well written and thought provoking article. I hope those in power get that Aha moment and more of them read this article so that they can fix this so that I and my fellow Generation Yers and the Z's AA's AB's and Tweens and Boppers still have a chance at a decently livable future.

Changing the Nation's Mindset About Housing

"I often wondered why they did not teach Economics 101 in High School. Should have a year of personal finance prep as a Junior and more advanced class as a Senior."

They did teach (or try to teach) Economics in high school it was during my Senior year, but the topic is simply too dry and at times the language is too new for a 17 year old pubescent kid to understand. Now that I have taken a fair share of economics while getting my 4 year degree, I must say that while its a good idea for kids to learn early about economics and finance, these two topics are simply too far of a reach for the mindset and education level of high schoolers.

They have yet to master basic checkbook balances for most students let alone have their own income to take accountability for. If a child is getting food and shelter from a parent, and hasn't had a job yet prior to graduating from high school, than they really don't have a large attention span available for learning financial obligations.

Advice for Renters: Wait Until 2010 to Buy

The problem with making money with US Exports is that we don't exactly have much goods to export, most of the manufacturing of the products that are produced by American companies are already outsourced, so we actually import what we create.

The only few large home brand super companies that are left are all uncompetitive, our Automobiles are undesirable to foreigners with small streets who also demand efficiency over size, our airplanes are being produced into a dying industry that isn't forecasted to grow, our main competitive edge is in software and that gets bootlegged in countries with lax regulation, and financial services which just bursted.

Unless you are suggesting we export what we do do best which is make weapons and create countries with weapons, the US has given up its industrial revolution days.

Advice for Renters: Wait Until 2010 to Buy

The prices are going anywhere these days but up, it is definitely a good idea to play the waiting game, and I'm sure that even if you don't buy at the absolute bottom, just waiting for a few years from now you will still be able to buy a house cheaper than the prices we have seen these days.

The real issue is now that the banks have the bailout money in play, when will home buyers finally be able to borrow money from banks again?

Desire for Safety Has Made the Financial World Risky

This is a good article, it is a shame that the investors didn't want to take the appropriate risks at the time because what ended up happening was they were actually taking on pretty risky investments in the mortgage industry.

I never understood how a home was seen as an asset, more like a liability. Cars, office equipment, and every consumable product we buy depreciates, but homes were always seen as an appreciating asset. Cars get used and lose value, homes get used and lose value as well, a home doesn't get any younger from the day it was built it gets old, it needs nurture and care and so the risk was always there that homes would devalue one day.