I don’t know if I can comment here (I don’t live in the States. I live in Spain). I just wanted to express my opinion.

First of all, I think this blog is really good. It is so true what you say about the press blowing everything out of proportion. I think a lot of people (myself included.) get totally freaked out about what might happen. The newspapers know this, and use it to sell stories. It’s a real psychological pull that, unfortunately, only seems to be getting worse.

However, I don’t think it’s completely fair to blame the average person. Businesses and banks have been ruthlessly cruel. In recent years there have many workers who have come to Spain from South America, sold an idea of a country paved with gold. Many of these people haven’t had a full education. Some don’t even know how to read or write.

Many banks knowingly took advantage of these people. They sold them houses even when they knew that these workers couldn’t read, let alone understand the legal, technical jargon on the contract. I know this because I knew somebody who worked in a bank. He ended up leaving because he just couldn’t take it anymore. When the construction industry went bust here, and lots of immigrants started losing their jobs, they started going to the bank and saying they couldn’t pay. But in Spain you have to keep paying your mortgage, even after the bank has repossessed it.

Although I think people need to know their limits, of what they can and can’t afford, not everyone has had a decent education. The banks and businesses who lied to ordinary, working people should be held to account.

I have a job. I guess I do okay, but I will never be able to afford a house. I will never be able to splash out on a fancy holiday. I have come to accept that I am a member of the working poor. It’s a term I just recently discovered, one that unfortunately, describes many people’s situation perfectly.

All the best,

John.

The whole point of vouchers is to deconcentrate poverty and to give working families a chance to get to better neighborhoods with better schools and better jobs so they can improve their lives and their children’s lives, so yes, of course it supports higher rents. I’d rather pay a decent landlord a decent rent and give a family a chance to improve, than keep that family in substandard housing that is overcrowded and unsanitary but happens to cost $500 per month instead of $1,100, wouldn’t you? It’s also not exactly free; families are subject to annual recertification and go through a humiliating and invasive annual examination that I would never tolerate even in exchange for reduced rent, and that’s after they spend 10 years on some waiting list desperate for housing assistance.

Also you don’t have to be rich to have good credit; credit is not really about how much cash you have. (Although in theory it should be easier for a wealthy person to have good credit.)

Live by the sword and die by the sword, except the sword was allowed into our daily lives through the often ruthless advertising done by the companies.

I am having my share of knocks from this down market (writing from Malaysia by the way) and and still working to find my feet. At least we have a roof over over heads and food on the table.

Does it make sense on a 50k or 100K household income to buy a 300k+ house and 30K car while you are barely making it by each month?
What are you gonna do when shit happens? No savings, so you lose your house and your, and you wonder why your kids think you’re dumb and your wife divorces you?

Do you people ever really think about what the are doing, or do they just follow the herd?

many are out of work from their companies … and i too have a frd who is haven’t paid since 2 months but instead of leaving the job he is still working hard to keep his company running … lets hope for the best.

I have 5 months of living expenses saved and no other debt. I have plenty of equity, but now I’m trying to tap into it to cushion my savings. I thought I’d have this house paid for in 8 years. Now I’m looking at 30 years again since I need that equity to live on and to lower my monthly payment while I look for work. My situation is better than many, but I’m still bitter at being back where I was 10 years ago.

Say you got laid off 5 years ago, okay it sucks but you still have a house in a good market. You could get a loan, your debts were lower, you had less debt then now probably and plus your savings accounts were doing well.

Today if you lose your job, there are not many jobs out there anymore, there are more people competing for jobs, the value of your house is down, it’s harder to get a loan, your savings account has been ripped to shreds and it goes on.

But.. Regarding unemployment: a) a lot of people believe this number is underreported b) some areas – like NY – are hit a lot more than others. As to mortgages – I think a lot of posters here still don’t understand how the mortgage-backed securities and credit default swaps amplify mortgage losses exponentially and how the loss in paper value of these securities lead to the credit crisis.

The main thing I think people are unhappy is because they are worried that it’ll get a lot worse before it gets better. Some of it may be due to a lot of gloom and doom on TV, but some is due to legitimate concerns about a) continued credit crisis with businesses across the board having liquidity issues b) continued bank losses as not all CDOs have been completely devalued yet c) lack of spending that may not be so bad for a person involved (especially if the person is in debt) but is likely to lead to further contraction in the economy, then to more lay offs and to even less spending i.e. a deflationary cycle d) growing government debt e) massive money printing that may cause inflation when the economy finally picks up. c) and e) are working against each other as one is deflationary and another may lead to inflation, but this is part of the problem – we don’t really know what will happen next. This uncertainty and fear is the largest problem: many people are scared in hoarding money rather than spending.

@VM: The problem is that in some areas it is really difficult to find a job nowadays and your 3-6 months emergency fund is grossly inadequate in this case. Take, for example NY. I have friends – mostly in IT and software R&D, and they find it really difficult to find jobs. I know really good people – excellent engineers and scientists – who have just lost their job when my employer had a round of layoffs – 2 days after excellent earnings. The scary thing was that nobodycan understand the principle by which these people were chosen which means virtually every remaining employee (myself included) is asking “why him and not me” and is scared like hell. I know some people who worked in NYC in IT – programmers, DBAs, who cannot find a job since last summer. These aren’t stupid people or lazy people or people with bad interview skills – these are highly skilled, experienced people who in the past had no trouble finding jobs. But virtually nobody in and around NYC is hiring. 3-6 months emergency fund? Forget it. You need at least an year, if not more. You also need to allow for buying medical insurance which is actually the main reason my friends are worried since they do have a lot more than 3-6 months emergency fund. Even Cobra is expensive.