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Breaking economic news from the New York Times: People are being forced to live within their incomes!

May 1, 2008 07:10 AM

My times are bad, aren't they?  Per the NYT:

As real estate prices plunge, so does the ability of homeowners to borrow against the value of their homes, crimping a major artery of spending. As banks grow tighter with their dollars in a period of uncertainty, families are running up against credit limits, forcing many to live within their incomes.

First, what's so bad about people living within their incomes? And second, if these people are up against their credit limits, THEY STOPPING LIVING WITHIN THEIR INCOME A LONG TIME AGO.

Maybe these people aren't the victims?  Maybe they're actually the ones who deserve the blame for the bad economy? 

Comments

Somehow I can't help blaming loons like Schumacher who keep advertising custom homes for which they will pay the mortgage for the first year.

AKL   ·  May 1, 2008 09:27 AM

Holy crap are you nuts? Are you suggesting people should do without instant gratification?
LOL!
Guys in the next level up from me are pulling 20k a year more than me and always complaining about money. I tell them they have no reason to bitch with their $125 a month cable bills and hour commutes to work in brand new SUVs. Meanwhile I socking money away like crazy.
It never how much you make. Its how much you spend.

5chw4r7z   ·  May 1, 2008 09:35 AM

NYTimes;
"The new regulations on the credit card industry would slap the label of "unfair or deceptive" on certain practices, such as increasing interest rates for seemingly no reason and slapping late fees on consumers who aren't given enough time to pay, among others."
"Not surprisingly, the banking industry is not happy about the new regulations and insists it would make credit more scarce."

UH? and thats a bad thing? Seems like easy credit is what got everyone in this mess.

5chw4r7z   ·  May 2, 2008 08:44 AM

Yes, the credit is the problem. I don't have any sympathy for subprime lenders, either. I can remember seeing cards in the check out line at Kroger, that were really applications for home equity lines of credit. No sympathy for a business who loses money when people can't repay those kinds of loans!

NBS   ·  May 2, 2008 11:23 AM

I'll generalize and say that the subprime industry created a whole parallel economy where folks made their living from buying multiple properties and flipping them for profit. The foreclosure mess, and the collateral contraction of credit to joe sixpack, falls right at these fools' feet. What fool can't foresee the day when holding three mortgages on properties which won't move is a bad idea?

There will always be irresponsible consumers who drive too much car(s), borrow too much on their single mortgage, max their CCs on a 50 inch plasma, et cetera. But those situations are perpetual, relatively self-correcting and aren't the root cause of this crunch. The root cause is the SPECULATION. UBS, Merrill et. al. aren't writing off tens of billions because of irresponsible GED holders who really, really want that SUV, XBox360 and HDTV. It's the banks', and the Fed's, tacit endorsement of irresponsible real estate speculation that's kicking everyone in the biscuits right now.

west bay einstein   ·  May 6, 2008 09:51 AM

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