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Unread 10-18-2011, 01:02 PM   #46
DireKitty
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What i really don't feel is an appropriate counterpoint is the people who say "i worked two jobs to put myself through school, worked 70 hours a week and didn't spend any money on any extras and have 2 days off a month" So is that supposed to be the new "normal" in this country? Its going to be considered "normal" to have to work 70 hours a week while going to school and then have low prospects of finding a job to use that degree with? What if you were able to go to all that effort and had to maintain your 2 part time jobs because you couldn't find a job that required your degree?

You realize that in the united states at least, people used to buy houses in their mid 20s. Households used to be able to survive on 1 income, but now 2 incomes is almost a necessity. But I guess this is the new "normal" now as well. Basically people have bought into the idea of fighting each other for the leftover scraps.

THIS A THOUSAND TIMES THIS. People don't understand that they are making the same or less now then they would have back in the 70s. With inflation jumping up (homes, cars, every day items) we now need 2 incomes in the family to continue on with daily life. It used to be having 2 people working was a bonus. Usually the wife would have a part time job, some extra money for vacations and the like... or to help pay down the mortgage faster. Now both need full time jobs.

It is the norm now... and people aren't any happier for it. It isn't giving them anything extra.
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Unread 10-18-2011, 04:04 PM   #47
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THIS A THOUSAND TIMES THIS. People don't understand that they are making the same or less now then they would have back in the 70s. With inflation jumping up (homes, cars, every day items) we now need 2 incomes in the family to continue on with daily life. It used to be having 2 people working was a bonus. Usually the wife would have a part time job, some extra money for vacations and the like... or to help pay down the mortgage faster. Now both need full time jobs.
Two different issues here.

Its one thing to talk about relative value of a salary, and an entirely different one to talk real estate.

The relative real estate value has grossly outpaced inflation for over a decade now. These are prices not set by corporations, by wall street, or anywhere else - real estate prices are set by the people who sell and buy them, ie: market value. So if you want to blame anyone for the costs of buying a home, blame your neighbors.

Salary is a different issue, as are the other general costs - but housing? Thats the public's fault.
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Unread 10-18-2011, 07:53 PM   #48
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Looks like you have bought into the corporate thought process of "hey its not our fault people took out so many loans and drove the price of housing up" Definately that is the narrative they want the public to believe. Why wouldn't the banks give out unsecured loans left and right when they knew that when the bubble burst they wouldn't be left holding the bag, but the taxpayers and society in general.

Its similar to the solyndra solar company scandal where 500 million dollars was lost in just a couple of years. Even if the company had been successful the profits would have gone to private investors. So the public takes all the risk, while the corporations get all the potential benefits.

On the subject of wages, expect them to stay flat until 2021 at minimum is what the experts are now saying, but inflation will keep going up. Pretty soon children will be expected to get afterschool jobs to help pay the mortage, but i guess that will just be considered part of the new "normal" also.
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Unread 10-18-2011, 08:11 PM   #49
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Looks like you have bought into the corporate thought process of "hey its not our fault people took out so many loans and drove the price of housing up" Definately that is the narrative they want the public to believe. Why wouldn't the banks give out unsecured loans left and right when they knew that when the bubble burst they wouldn't be left holding the bag, but the taxpayers and society in general.
...what?

It wasn't loans, it wasn't corporate greed - and it wasn't inflation that drove up real estate prices. Solyndra has nothing in relation to this - wtf are you even talking about?

Look, I'm more than happy to say I'm pissed at the CEO's giving themselves fat bonuses while laying off loyal employees. It irritates the shit out of me when people who have busted their asses their entire lives had to watch their net worth drop to nothing. The degree of influence the oil industry has over our country is mind-boggling.

But I'm also not going to blame Wall St. for real estate prices. Like I said, blame your neighbors for that.
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Unread 10-18-2011, 08:29 PM   #50
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Actually, JGM181 makes a good point. Real estate has always been mark to market, and people clamoring to live in the "good" neighborhoods drives up housing value. I think that issue has more to do with unrealistic expectations and our society's general "keeping up the the Jones' " mentality. People take the loan's because they want to live the American dream (regardless of whether or not they can actually afford it) and the banks are more than happy to take advantage of that. It isn't the corporation's fault that people are taking loans, rather, it's their fault for taking on too much risk then repackaging it and passing it on to investors.

BTW, @pinoycosplay- are you by any chance a business/econ major? I know very few people outside those fields that know or care about Solyndra.
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Unread 10-18-2011, 08:33 PM   #51
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sorry blaming the neighbors is incorrect, this is a tad long but it throughly explains why the bubble happened, and it wasn't simply the nieghbors fault.

The predatory lenders that everyone was screaming about were originating mortgages based on guidelines from Fannie Mae and Freddie Mac. These guidelines in turn came from the CRA. That doesn’t make all mortgage brokers innocent, but they would have never been able to make those loans had it not been for the GSE’s, Fannie Mae and Freddie Mac. It was an absolute absurdity when a borrower with no money down, on a “no, no loan” (no income, no asset verification) would be charged a risk premium of 1-2% over a prime borrower. A true free market would have priced those sub-prime loans much higher. In fact, a free market would more than likely have never touched those loans, because they are near impossible to price, given that the risks would be too difficult to determine.

The bubble was created by an orchestra of market intervention from the Federal Reserve, the manipulation of interest rates; and the Federal Government intervention via GSE’s and affordable housing initiatives. Artificially lower interest rates increased the demand for housing. It also allowed for housing prices to increase beyond a nominal level by making them more affordable at a higher price. The GSE’s created a market for the sub-prime and risky loans, which were then securitized and sold to Wall Street. The Community Reinvestment Act poured fuel on an already volatile situation. All of this activity created artificial demand for housing with cheap money and artificially low lending standards. All of this was made possible by the practices of the Federal Reserve and its ability to create money out of thin air and government intervention.

Many try to blame the free market in the aftermath of this mess. The reality is that we haven’t seen a free market economy since the creation of the Federal Reserve (1913) and it has become even less of a free market ever since. If a true free market were at work, these malinvestments would not have been possible, because the capital required for them would not have been available to do so.

But keep blaming the neighbors if you like
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Unread 10-18-2011, 08:36 PM   #52
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People take the loan's because they want to live the American dream (regardless of whether or not they can actually afford it) and the banks are more than happy to take advantage of that. It isn't the corporation's fault that people are taking loans, rather, it's their fault for taking on too much risk then repackaging it and passing it on to investors.
*nod*

Starting in the late 90's, real estate values began jumping up. It began to be less affordable for the "average family" to live in nice suburbia. Alternative mortgages began appearing on the market (not a bad thing, at first). Later, the alternative methods were taken further and further, allowing people who had no right being given a loan for a car were buying houses. Mortgage-backed securities, which had formerly been a very stable packaging of notes, began containing more and more high-risk borrowers. Package them up in a big bundle, resell, repackage, resell.... and we end up with a portion of the current mess we're in.

But the increase in property values? Neighbors. Blame them.

EDIT: Obviously, you (not you MadHathor) are great at repeating someone else's spew. This is pointless, I won't bother replying to you further.
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Unread 10-18-2011, 08:45 PM   #53
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BTW, @pinoycosplay- are you by any chance a business/econ major? I know very few people outside those fields that know or care about Solyndra.
Let's just say i have varied interests :-), but I have taken some of those courses.

And the fact I brought up solyndra was as a side issue to show how the system is completely lopsided on who gets the favors and who doesn't.

People need to wake up to the fact that student loans are creating a new class of indentured serfs. Why is this occuring? because the banks lobbied hard to make sure that only death or dismemberment will provide student loan relief. Thats why it is so easy to get those loans. You literally have to either pay them off or die to be rid of them.

You can look at charts where the earnings of college grads exceed nongrad by only 280k. http://online.wsj.com/article/SB1000...819966538.html
and that neumber is expected to shrink as education costs rise. And what if you can't get a job in your field? sorry your life is basically ruined at 22. So basically college has become a gamble. If you go to college you darn well better earn a degree that is in demand, paying well, and is hard to outsource (basically nursing).
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Unread 10-18-2011, 08:49 PM   #54
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Isn't paying off a loan traditionally how you're supposed to get ride of it? By that reasoning anyone with a morgage is a "serf".
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Unread 10-18-2011, 08:52 PM   #55
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You can still declare bankruptcy to get out of a housing loan or credit card loan. It is basically a last resort if you get seriously ill and can't work or get laid off and can't find a job.
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Unread 10-18-2011, 08:53 PM   #56
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There's a host of economic issues here but I think the natural state of the world is decadence, that people who possess some-thing use it to get more. For instance those with power use (and abuse it) it to get more power; those with money use it to get more money; and so on.

As for people losing their whole net worth, housing prices, and such, often times our humanity works against success, or at least monetary success, in this world. Many people are followers, for instance they never ever question the notion of funding a house or a car through a loan or with borrowed money. And that's just the beginning, the problems there alone are quite systemic. Very few people stumble across wealth or gain it by chance, without a good understanding of money and economics... people are at a real disadvantage when it comes to money. But thankfully, there's a lot more to life than money, because it's honestly quite boring talking about it (IMO).
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Unread 10-18-2011, 08:55 PM   #57
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You can still declare bankruptcy to get out of a housing loan or credit card loan. It is basically a last resort if you get seriously ill and can't work or get laid off and can't find a job.
Well I can't speak for the USA, but over here your student loans are automatically paid off if you never earn over 40,000 a year (the point at which you begin paying it off) after a certain number of years. Isn't there something similar going on?
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Unread 10-18-2011, 08:58 PM   #58
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Well I can't speak for the USA, but over here your student loans are automatically paid off if you never earn over 40,000 a year (the point at which you begin paying it off) after a certain number of years. Isn't there something similar going on?
Nope!

In 1998, student loans were no longer eligible for dismissal as part of a series of bankruptcy law changes. In 2005, privately funded student loans joined the ranks of loans with permanence.

So.. nope. But community college is really freaking cheap. I don't see why people need to pay $40k/yr for remedial math and english their first two years, when they could pay like $1500.
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Unread 10-18-2011, 09:01 PM   #59
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Well the average here used to be £3000, but that's tripled since we've had a conservative government (well they're in a coalition with the Lib-Dems but it's hard to tell). They raised the cap on tuition fees so pretty much every uni raised theirs (a lot of them had to charge the maximum to maintain their prestige, or so they claimed), and that's not counting the maintenance loan (mine was £3000 a year, plus a few bursaries and some allowances which I don't have to pay off).
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Unread 10-18-2011, 09:06 PM   #60
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Well I can't speak for the USA, but over here your student loans are automatically paid off if you never earn over 40,000 a year (the point at which you begin paying it off) after a certain number of years. Isn't there something similar going on?
That would be a dream come true for many americans. No in the United States if you can't get a job good enough to pay off the interest on your loans, too bad for you. The banks have made it impossible to ever got out from underneath those loans, but at the same time make them very easy to get. People are basically selling themselves into a form of legal slavery.

Whats even more absurd about it is that if you can't pay the loans on time your credit score goes down and in the US a lot of employers look at credit scores when hiring. SO it becomes a cycle of not being able to get a job so you can't make your payments, you don't make your payments so your credit score goes down, your credit score goes down so you can't get a job, rinse and repeat. It is a trap that is very easy to fall into. All the more sad because these loans are often taken out by young adults jsut starting out who believe the false promises of those who give them these loans and say that you NEED a college education to get anywhere. lol. it really is a sad joke.
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