Comments on Wisdom Steps 101 ... Be Weird...Be Debt Free: Is There a Credit Crisis?

Thanks for your informative post!

2008-04-08T10:29:00.000-05:00

Thanks for your informative post!

I don't think there will be a huge crisis, cer...

2008-03-25T07:30:00.000-05:00

I don't think there will be a huge crisis, certainly not a new great depression. What I can see is the housing market dropping considerably in the next few years. Simply - less and less people are able to secure mortgages - at least for the amount they need - and more of a deposit is usually needed now (bad news for 1st time buyers). This means less people will be able to buy & so the house prices will have to come down if they are to sell. What sort of knock on effect this will have, i don't know...

The current credit crisis began early in 2007 with...

2008-03-18T08:05:00.000-05:00

The current credit crisis began early in 2007 with rising delinquencies in the subprime mortgage sector. Like a slow fuse, these difficulties spread throughout the global financial system as investors realized that these bad mortgages had been securitized, pooled together and sold to financial institutions around the world.

By early August, parts of the financial system were close to frozen and central banks were forced to inject billions of dollars to add liquidity to maintain the workings of the credit markets.
Over the last two months, some markets have recovered, but problem areas remain, particularly in the London market for structured investment vehicles, or SIVs. There is concern in financial markets about bank exposure to these investment pools and concern that possible forced sales of their assets might shock already jittery credit markets.

Separately, Bank of America, JPMorgan and Citigroup are leading a plan to raise $80 to $100 billion to help buy some of the assets held by SIVs facing collapse.
But these same international bankers spent last weekend in the corridors of the International Monetary Fund's annual meeting urging government officials not to rush to adopt new rules to get the financial market turmoil under control.

Well Kevin I'm not feeling any kind of "credit cru...

2008-03-18T00:55:00.000-05:00

Well Kevin I'm not feeling any kind of "credit crunch". In fact, in addition to my $175,000 credit line, my lender (Countrywide) has offered to refinance me at a lower rate for a 15-year fixed to replace my 30-year. My Honda is 25 so I've got the other commenter beat. ;) I've rented out my house and I'm relocating closer to the Y so I will drive less, pay less for housing, and work out more. Things are going great for me. If this holds through the recession I plan to give to many charities because the last session was terrible for me.

We are in a really tough situation. Our economy i...

2008-03-17T19:21:00.000-05:00

We are in a really tough situation. Our economy is consumer oriented. If people are buying stuff, retail hurts, banking (read credit companies) hurt, manufacturing hurts - it is the other snowball effect. On the other hand, we can't just keep doing what we have been doing.

I don't have any answers for the overall economy. But I am with you on the quest to become debt free. My wife and I sold our house recently and walked away with a pretty sizable amount of cash. We were able to do this buy buying a piece of junk, putting a lot of sweat equity in it and living in it for six years. We never let ourselves get into it for more than what we knew we could get out of it in a worse case situation. We are fortunate to live in an area that is behind the curve on the housing crunch. We are renting now, looking for our next junker. We are making offers on foreclosed homes that we can pay cash for and have enough left over to fix up. We have been driving old cars for years. In 30 years of marriage we have only bought one new car - that was a huge mistake. Our present vehicles cost us $3,000 and $4,000 respectively. We wrote checks for both.

This weekend we were leaving a resteraunt and a young man driving a sweet looking sports car made looked at my 15 year old Toyota and said, "nice car." I smiled and thought, yea and when you make your $400 car payment and your $300 insurance payment this month just remember this old man.

Anyway, keep it up. It has taken my wife and I 30 years of mistakes, perseverance, hard times and faith to get to the point where we are going to be debt free - with a paid for house. God willing and by his grace we are almost there.