LEND ME MONEY RIGHT NOW! (Frazer Chronicles)
Clearly 90% of us don't know a dam thing about big money, banking, the economy of our country, or the premise that we survive, as a nation on credit, vast credit, deficit spending and a pay-check, to pay-check mentality. Hey baby, it's the American way, Capitalism, the greatest country on the face of the planet.
We are the "I want it right now" generation.....actually several generations of "I want it right now." The "lend me money right now" no matter the consequences, no matter the payments, or "how the hell am I going to pay it back."
As a nation, we have caved into the notion that we all should own homes, have 2 cars, 3 televisions, at least a bath and a half, and 2.5 kids. Back in 2003, I can remember a speech by President George W. Bush, say "he wanted everybody to own a home," it was the best part of the American dream.
By 2008 a survey discovered that close to 75% of American families owned their homes, or more correctly, they and the bank. Everybody now knows what happened between 2008 and 2011, defaults, foreclosures and the end of a big part of the American dream.
When all of this house buying was going on, I, as an interested by-stander watched and wondered where and when it would all end, this "rush" to buy homes. Some of the people that bought homes, people that I casually knew, people that had no business in their own homes, with all the responsibility that goes along with such a position, kept right on getting financial approval and continued buying houses.
I know the owner of one of the biggest home finance companies in Green Bay, and I asked him where he thought the bubble was going and when it would be over. His answer, "it won't, it'll keep going on." I couldn't believe that he would think that, much less say it, I am in no way an expert on loans, banking procedures, or real estate practices, but I knew it had to end, the only thing I didn't know was how it would effect the country. I didn't know that lending practices were so fractured that home ownership would bring the country to the brink of monetary ruin.
Next was governmental bank bailouts worth billions and billions of dollars, basically on the grounds that the bailout funds would stimulate lending to business and consumers alike. But it didn't and hasn't. Recent reports from the Federal Deposit Insurance Corporation, which insures bank deposits and manages failing banks, shows that bank lending declined again in the 1st. quarter of 2011. in fact, since 2008, loans outstanding has fallen in 10 of 11 quarters, and the only reason it grew in the 1st. quarter last year was an accounting change.
What we had, in simple terms "was a banker's best friend, the Federal Government, giving the banks a soft landing for idiotic practices." Lending money to people that had no clue how they would ever repay the money that they borrowed." It was, in effect, a handout, a way for people to get into a house without the possibility of ever paying it off and banks and some others making lots of money.
Purchasing a home is probably the biggest of the many American myth that there is. Let me explain the ways that home ownership is a myth:
1. You buy a 3 bedroom house with a bath and a half, a 1 stall garage and a full basement for $150 grand.
2. You have a house payment for 30 years at $1000 a month, $360 grand
3. Insurance, $1200 per year x 30 years, $36,000
4. Tax, $3000 per year x 30 years, $90,000
5. Upkeep, $1000 per year x 30, $30,000
That all totals up to a tidy half a million dollars over the 30 year life of the house payment contract, whether your well, ill, or die, "I think they make you pay even after death."
Now if you rent, say at $1000 per month for those same 30 years.....$360,000, a considerable savings over the 30 years, plus you can move on after either your lease is up, or if you get a job promotion that would require a move and breaking the lease.
I am not advocating that people rent for their entire lives, I am a home owner, but I do realize that there are advantages to renting, the same as leasing a car over ownership. I'm way past the age of worrying about whether I own or rent. In fact, with my bad back, it's sounding and looking better with each passing month.
I for one do not necessarily blame the lending institutions for watching who gets a loan in this day and age, with the bubble burst still fresh in their minds. Banks make their livings on lending money, not on savings and checking accounts, so for them not to want to lend money is like McDonald's not wanting to sell Big Mac's.
Maybe it's time that we all re-evaluated how we do business, and possibly should start spending as we go, less credit, like some of our folks did, although they suffered through the greatest financial depression in this country's history. However it too was triggered by way to much credit and greed, just like the "o8" crash. Keep $5 tucked in your sock, it'll keep you honest.
Clearly 90% of us don't know a dam thing about big money, banking, the economy of our country, or the premise that we survive, as a nation on credit, vast credit, deficit spending and a pay-check, to pay-check mentality. Hey baby, it's the American way, Capitalism, the greatest country on the face of the planet.
We are the "I want it right now" generation.....actually several generations of "I want it right now." The "lend me money right now" no matter the consequences, no matter the payments, or "how the hell am I going to pay it back."
As a nation, we have caved into the notion that we all should own homes, have 2 cars, 3 televisions, at least a bath and a half, and 2.5 kids. Back in 2003, I can remember a speech by President George W. Bush, say "he wanted everybody to own a home," it was the best part of the American dream.
By 2008 a survey discovered that close to 75% of American families owned their homes, or more correctly, they and the bank. Everybody now knows what happened between 2008 and 2011, defaults, foreclosures and the end of a big part of the American dream.
When all of this house buying was going on, I, as an interested by-stander watched and wondered where and when it would all end, this "rush" to buy homes. Some of the people that bought homes, people that I casually knew, people that had no business in their own homes, with all the responsibility that goes along with such a position, kept right on getting financial approval and continued buying houses.
I know the owner of one of the biggest home finance companies in Green Bay, and I asked him where he thought the bubble was going and when it would be over. His answer, "it won't, it'll keep going on." I couldn't believe that he would think that, much less say it, I am in no way an expert on loans, banking procedures, or real estate practices, but I knew it had to end, the only thing I didn't know was how it would effect the country. I didn't know that lending practices were so fractured that home ownership would bring the country to the brink of monetary ruin.
Next was governmental bank bailouts worth billions and billions of dollars, basically on the grounds that the bailout funds would stimulate lending to business and consumers alike. But it didn't and hasn't. Recent reports from the Federal Deposit Insurance Corporation, which insures bank deposits and manages failing banks, shows that bank lending declined again in the 1st. quarter of 2011. in fact, since 2008, loans outstanding has fallen in 10 of 11 quarters, and the only reason it grew in the 1st. quarter last year was an accounting change.
What we had, in simple terms "was a banker's best friend, the Federal Government, giving the banks a soft landing for idiotic practices." Lending money to people that had no clue how they would ever repay the money that they borrowed." It was, in effect, a handout, a way for people to get into a house without the possibility of ever paying it off and banks and some others making lots of money.
Purchasing a home is probably the biggest of the many American myth that there is. Let me explain the ways that home ownership is a myth:
1. You buy a 3 bedroom house with a bath and a half, a 1 stall garage and a full basement for $150 grand.
2. You have a house payment for 30 years at $1000 a month, $360 grand
3. Insurance, $1200 per year x 30 years, $36,000
4. Tax, $3000 per year x 30 years, $90,000
5. Upkeep, $1000 per year x 30, $30,000
That all totals up to a tidy half a million dollars over the 30 year life of the house payment contract, whether your well, ill, or die, "I think they make you pay even after death."
Now if you rent, say at $1000 per month for those same 30 years.....$360,000, a considerable savings over the 30 years, plus you can move on after either your lease is up, or if you get a job promotion that would require a move and breaking the lease.
I am not advocating that people rent for their entire lives, I am a home owner, but I do realize that there are advantages to renting, the same as leasing a car over ownership. I'm way past the age of worrying about whether I own or rent. In fact, with my bad back, it's sounding and looking better with each passing month.
I for one do not necessarily blame the lending institutions for watching who gets a loan in this day and age, with the bubble burst still fresh in their minds. Banks make their livings on lending money, not on savings and checking accounts, so for them not to want to lend money is like McDonald's not wanting to sell Big Mac's.
Maybe it's time that we all re-evaluated how we do business, and possibly should start spending as we go, less credit, like some of our folks did, although they suffered through the greatest financial depression in this country's history. However it too was triggered by way to much credit and greed, just like the "o8" crash. Keep $5 tucked in your sock, it'll keep you honest.
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