Originally posted by SEEWHATUDO
reply to post by smirkley
Wow, well you paint a much prettier picture than the rest of us
Not painting, just observing and drawing rational conclusions based upon having been through several recessions and/or 'crisis' before.
For the middle class esp. the lower middle class, it really doesnt matter at this point if the economy bounces back or not. The damage has been done
and will continue to unravel over the next year. I guarantee foreclosures will skyrocket this year.
why? because people who purchased their homes in the last 5 years have no equity in their homes and now that their homes have dropped in value (in
some case below the actual purchase price) they are now upside down and struggling to pay a mortgage that is worthless.
Great credit, bad credit, doesnt matter when you have to decide between paying the mortgage or taking care of your children, putting gas in your car,
etc. most will see the writing on the wall and foreclose.
I dont disagree at all. Forclosures going up are a result of many holders being unable to pay the mortgage, or the increases in their ARM's. Many
people bought bigger than they could afford, under the premise of property appreciation expectations and wage increase expectations.
Did those who purchase with ARM's expect that they wouldnt go up? Did those who purchase under the premise of 20% or more appreciation a year, expect
that wouldnt change?
I have a background in real estate and I am going to go out on a limb and say the mortgage crisis and the real estate markets are not even close to a
complete fall out yet, by the end of the year we will get a better picture of the damage that has and will continue to be done.
I dont think you are going out on a limb with that projection. In fact I doubt you could find anyone who would disagree.
Unless a miracle occurs, I dont see an upswing in real estate until at the very least 8 months after the new president has been elected and thats only
if we are lucky. Once the upswing starts, it will take another year just to get the market back on solid ground, these homes will have to appreciate
at a very fast rate and I really dont know how that will occur. Any inflation that happens will stay far away from the real estate market, people who
arent willing to mess up their credit with a foreclosure will be sitting on an unsellable house unless they sell it for pennies on the dollar.
As soon as the home glut is absorbed, and significantly lower interest rates for those who qualify will help turn sitters into buyers again, then
prices will begin to stabilize and inflation of 'replacement cost' will begin to effect the values to where they should realistically be. Inflation
has been somewhat stimied by fed actions and market corrections, forcing pricing on most things that are catagorically included in inflation figures.
But yes, food and energies will force inflation on everything else as it has been occurring for the last year or so. There are regional segments in
the US where selling a house is tough at any price, primarily as a function of the regional economic conditions, as well as places like Florida where
speculation based construction and investment has finally imploded because, well, it was speculation, and not real-market driven. You dont buy a house
to flip and expect a guarantee of return. It just always doesnt happen that way, and if the market implodes, then this is where the risk-to-reward
formula sweys the other way.
And of course, there are still very active markets regionally, where a house holds its value, and can be sold in less than six months, as well as low
forclosure rates per capita.
As for the cost of living raise you talked of where? will our government demand that every employer must give a cost of living raise? because If the
employers havent handed out a cost of living rate in the last 10 years I cant see them doing it well you know, just because. But maybe you are right
but I think the 4% yearly raise has become the norm over the last 15 years and it will be few employers that will actually add a cost of living
raise into that.
It isnt the governments job or responsability to 'force' companies to give raises, COLA or not. That is a function of supply and demand for good
employees. And last I checked, overall US employment figures do not show high unemployment rates.
I dont work for the government, but you can get a job there yourself if you like. They have thousands of openings continuously. All with those great
bennies too.
Of course most of those fed jobs require that you are a citizen.
(Exceptions are the Federal Government, they handed out 4% raises + 10% cost of living raises in 2007. How do I know this? Most of my family works for
a branch of federal government and I am pea green with envy at their benefit packages, sick days, vacation, all the raises they get and the lack of
work they actually do)
I know the gov employees didnt get a 10% COLA. I would love to see those figures without that person getting a grade raise or a promotion in their
department.
SALARY TABLE 2008-RUS
(step raises are within your grade, and only merit based)
Locality-Based Comparability Payments and Pay Increases in 2008 for General Schedule
Employees
I dont see any 10% COLA's anywhere.
I am civilian, and work for a regular company. I get a 3% COLA on top of my raise. And the raise this year will not be pennies either. Plus the
company is hard pressed to find qualified and capable, and
willing workers to hire all the time.
At my house, we dont run credit card debt, we dont buy the latest new cars every two or three years, we dont go on vacations we cant afford, and as a
result, our household concerns are for our future, and not surviving the present. Yes we worry, yes we do without some things, and yes I am keenly
aware of where we stand and what we need to do to protect ourselfs and home.
Now when it is official [actually it's over 10%,
realistically 16% and maybe even more] everybody comments but still many doesn't understand process. 
. 
