Really good article about the economy

[Casper]

http://money.cnn.com/2008/01/18/news/economy/cure.fortune/index.htm?postversion=2008012107

Best one I've read so far.

[redbarron77]

If the fed wants to cut rates, let 'em! Especially when I'm trying to sell my farm.

It's all cyclic. There will be ups and downs with the economy, and whomever is in office will be the one blamed for the downs, and get the credit for an economic upswing. People don't want to hear that we will need to wait 6 months to a year for the economy to swing back to a positive side. These are the people who panic if they don't have internet access for 10 minutes, or their cell phone loses service while they are driving.

I'll step down now, and have another drink.........

[Putty]

If the fed wants to cut rates, let 'em! Especially when I'm trying to sell my farm.

That would be a good thing for you, but each rate cut by the fed puts us closer to a depression.

[Casper]

That would be a good thing for you, but each rate cut by the fed puts us closer to a depression.

Correct. Too many Americans are living way above their means. Cutting interest rates just encourages this.

[r6allstar]

Maybe a dumb question... if the Fed is cutting rates, does this mean now is a good time to refinance a home or buy a home? I am assuming so if you are talking about selling your farm etc.. Just curious b/c I have been thinking about buying a house but am not sure if I should take the leap now or wait.. but if I could get a killer interest rate on a home then it would be stupid not to... advice anyone?

[Casper]

Maybe a dumb question... if the Fed is cutting rates, does this mean now is a good time to refinance a home or buy a home? I am assuming so if you are talking about selling your farm etc.. Just curious b/c I have been thinking about buying a house but am not sure if I should take the leap now or wait.. but if I could get a killer interest rate on a home then it would be stupid not to... advice anyone?

Don't hold me to this, its just my personal opinion. With that being said, I'd hold off until February. The feds just cut 75 points today, but are expected to cut 50 or more again on January 30th. Rates still haven't seen the full impact of the feds cut from this morning. 30yr fixed refinance and purchase are both around 5.26% for the national average. I've heard people are getting refinance quotes here in Columbus this morning at 4.5%. If feds cut another 50 points, you'll be looking at the low 4% range.

[r6allstar]

Don't hold me to this, its just my personal opinion. With that being said, I'd hold off until February. The feds just cut 75 points today, but are expected to cut 50 or more again on January 30th. Rates still haven't seen the full impact of the feds cut from this morning. 30yr fixed refinance and purchase are both around 5.26% for the national average. I've heard people are getting refinance quotes here in Columbus this morning at 4.5%. If feds cut another 50 points, you'll be looking at the low 4% range.

I did see the part about more cuts coming but did not know how long to wait. Thanks for the info mang!

[Casper]

Let me add to this...

DO NOT INVEST IN BANKS!!!!!!

If you have more than $100K in a bank, MOVE THE MONEY AROUND. The FDIC only insures up to $100k. Anything you have over that is not insured and CAN BE LOST if this recession turns into a depression. The problem with the feds cutting the rates 75 pts now and another 50 pts at the end of the month is long term. Cutting rates encourages spending. Americans SHOULD NOT BE SPENDING!!!!! Now is the time for saving. Buying a house is an iffy investment right now. In theory, buying a house is always a good investment. However, make sure its something you want to live in for a while. Projections right now are saying it could be 7 - 10 years before the housing market returns to normal.

[homewrecker]

Let me add to this...

DO NOT INVEST IN BANKS!!!!!!

If you have more than $100K in a bank, MOVE THE MONEY AROUND. The FDIC only insures up to $100k. Anything you have over that is not insured and CAN BE LOST if this recession turns into a depression. The problem with the feds cutting the rates 75 pts now and another 50 pts at the end of the month is long term. Cutting rates encourages spending. Americans SHOULD NOT BE SPENDING!!!!! Now is the time for saving. Buying a house is an iffy investment right now. In theory, buying a house is always a good investment. However, make sure its something you want to live in for a while. Projections right now are saying it could be 7 - 10 years before the housing market returns to normal.

I only wish I had known that the market was gonna suck this bad a few years ago so I could have got in on the early stages of the gold rush going on. Gold is over $800 an ounce right now. A few years ago it was below $300. What a jump. It is still projected to go up to $1200 before the years end. That is a good investment for those who can still afford to get into it. I don't think I would invest in much else except oil and guns. I bet both of them will be high commodities soon.

[Casper]

I only wish I had known that the market was gonna suck this bad a few years ago so I could have got in on the early stages of the gold rush going on. Gold is over $800 an ounce right now. A few years ago it was below $300. What a jump. It is still projected to go up to $1200 before the years end. That is a good investment for those who can still afford to get into it. I don't think I would invest in much else except oil and guns. I bet both of them will be high commodities soon.

I don't know man, I think gold is overinflated right now. People think its a safe investment, but I think the gold balloon is going to pop.

[homewrecker]

I don't know man, I think gold is overinflated right now. People think its a safe investment, but I think the gold balloon is going to pop.

I'm sure the gold ballon will pop. However if I had bought a few years ago think of the money I could make selling to some paranoid shit at todays price.

[Todd#43]

Let me add to this...

DO NOT INVEST IN BANKS!!!!!!

If you have more than $100K in a bank, MOVE THE MONEY AROUND. The FDIC only insures up to $100k. Anything you have over that is not insured and CAN BE LOST if this recession turns into a depression. The problem with the feds cutting the rates 75 pts now and another 50 pts at the end of the month is long term. Cutting rates encourages spending. Americans SHOULD NOT BE SPENDING!!!!! Now is the time for saving. Buying a house is an iffy investment right now. In theory, buying a house is always a good investment. However, make sure its something you want to live in for a while. Projections right now are saying it could be 7 - 10 years before the housing market returns to normal.

Couple of things on FDIC, home purchases, and banks...

Your deposits are insured in the aggregate to $100K, so having $150K in three different banks still leaves you with $50k exposed.

The FED cutting rates should stimulate spending, but not just by consumers at the retail level. The hope is that corporations will also invest in machinery, equipment, etc. Also a rate drop doesnt mean that more people will be eligible for credit. The way things have gone with the housing and credit card markets has most lenders tightening their credit criteria. Less non conforming loans at a better rate for people who are credit worthy is a good thing.

I'll never agree that buying a house is a "good" investment. For most people all it does is allow you to leverage more debt. If you add up ALL the costs of home ownership you'd be lucky to show any return on your investment - especially in the last 5 to 7 years. If someone on here can show me otherwise, I'm all ears.

[Angrish]

Maybe a dumb question... if the Fed is cutting rates, does this mean now is a good time to refinance a home or buy a home? I am assuming so if you are talking about selling your farm etc.. Just curious b/c I have been thinking about buying a house but am not sure if I should take the leap now or wait.. but if I could get a killer interest rate on a home then it would be stupid not to... advice anyone?

I would buy when you can catch some body forclosing!! I did that and saved about 50,000 .............And right now there are a bunch of ppl in this situation....take advantage of it!! I know everyone is dogging the market ...but if you saved youur money to this point.you will and should make out like a bandit.. By the way banks are not financing anyone w/credit score lower that 670.....good luck w/ what ever you do.houses are hard work but boy its nice to have!!

[Todd#43]

I would buy when you can catch some body forclosing!! I did that and saved about 50,000 .............And right now there are a bunch of ppl in this situation....take advantage of it!! I know everyone is dogging the market ...but if you saved youur money to this point.you will and should make out like a bandit.. By the way banks are not financing anyone w/credit score lower that 670.....good luck w/ what ever you do.houses are hard work but boy its nice to have!!

Saved 50,000 relative to what? What the last owner "paid" for the house, or what the house was "worth" based on former market value?

Why do you think a house is nice to have? Is it a pride of ownership thing, or have you actually put money in your pocket owning one?

[Angrish]

Saved 50,000 relative to what? What the last owner "paid" for the house, or what the house was "worth" based on former market value?

Why do you think a house is nice to have? Is it a pride of ownership thing, or have you actually put money in your pocket owning one?

I will put 50,000 dollars in my pocket when I sell maybe even more I have added bathrooms and laundry rooms .Plus I got the house so cheap that even w/ the market going down I still can make money if I sell.Plus renting makes someone else rich....why not invest in yourself.A house is a pain to take care of sometimes but its well worth (my investment). And if I refinace at what the house is worth I can put that money in my pocket or other investments.

Plus having a house gives a lot of freedom ..fires in the back parties when you want ...pets if you wish and lending institutions love to see someone that has a house (and goood credit) They will loan you fosho. I don't know anymore than what I personaly have gone through.So this is my story. buying this house off of someone who was in over their head was the best investment I have made ....besides gold coins!!

[Angrish]

Saved 50,000 relative to what? What the last owner "paid" for the house, or what the house was "worth" based on former market value?

Why do you think a house is nice to have? Is it a pride of ownership thing, or have you actually put money in your pocket owning one?

I paid 120,000 for a house was worth 175,000>I bought the house from the bank that forclosed on the loan ..The owner before me paid the differance and forclosed ...bank had the house in a investment com. that tried to rent it then sell it .....sat for a long time ....investment company put in a sunday paper and I closed on the house 2 days later w/ 5000 down They asked for the money the bank wanted plus 5000$ The ppl before me had some kind of balloon rate financing or something...Payment went up 700$ in 5 years and they couldn't do it and forclosed (I was told?)I walk in to a house making 50,000 the day I signed!!More really the house is now worth about 180 or so.This is bad and good I pay taxes on 180,000 house but I'm making payments on 130,000.(Iput a little money in my bank the first time I refied!!after apraising it I pay hilliard taxes on 160 or 170 can't remember off hand.Sucks! it has been a couple of years ....I'll get it apraised again after some remodel gets takin care of.

[Todd#43]

I will put 50,000 dollars in my pocket when I sell maybe even more I have added bathrooms and laundry rooms .Plus I got the house so cheap that even w/ the market going down I still can make money if I sell.Plus renting makes someone else rich....why not invest in yourself.A house is a pain to take care of sometimes but its well worth (my investment). And if I refinace at what the house is worth I can put that money in my pocket or other investments.

Plus having a house gives a lot of freedom ..fires in the back parties when you want ...pets if you wish and lending institutions love to see someone that has a house (and goood credit) They will loan you fosho. I don't know anymore than what I personaly have gone through.So this is my story. buying this house off of someone who was in over their head was the best investment I have made ....besides gold coins!!

Just wondering, how much did you spend on the bathroom and laundry room? Did you factor that in when you figured out your 50k? If you didn't you should have. Did you do the work, or did someone else? Buy the materials on a credit card? Don't forget to factor in the cost of your time, mileage back and forth to the big box store, etc. if you did the work yourself. While you're at it, total up what you've paid already in the cost of the house - total your mortgage payments, plus real estate taxes, insurance, etc. Go ahead and off set your tax savings, but don't forget the capital gains tax if you dont spend that money on another residence.

Many rental properties allow you similar freedoms - pets, bonfires, etc. What they don't do is allow you to leverage more debt.

[Todd#43]

I paid 120,000 for a house was worth 175,000>I bought the house from the bank that forclosed on the loan ..The owner before me paid the differance and forclosed ...bank had the house in a investment com. that tried to rent it then sell it .....sat for a long time ....investment company put in a sunday paper and I closed on the house 2 days later w/ 5000 down They asked for the money the bank wanted plus 5000$ The ppl before me had some kind of balloon rate financing or something...Payment went up 700$ in 5 years and they couldn't do it and forclosed (I was told?)I walk in to a house making 50,000 the day I signed!!More really the house is now worth about 180 or so.

If you paid 120 for the house, that's really all it was worth. It may have a higher appraised value (175), but if you cant sell it for that (which the bank couldn't) it isn't worth 175, or 180.

You may have 50K on paper, but its not in your pocket.

[Angrish]

Just wondering, how much did you spend on the bathroom and laundry room? Did you factor that in when you figured out your 50k? If you didn't you should have. Did you do the work, or did someone else? Buy the materials on a credit card? Don't forget to factor in the cost of your time, mileage back and forth to the big box store, etc. if you did the work yourself. While you're at it, total up what you've paid already in the cost of the house - total your mortgage payments, plus real estate taxes, insurance, etc. Go ahead and off set your tax savings, but don't forget the capital gains tax if you dont spend that money on another residence.

Many rental properties allow you similar freedoms - pets, bonfires, etc. What they don't do is allow you to leverage more debt.

Capital gains will not effect me been here long enough.I own a plumbing co. Did everything myself ..Wrote off everything just like a job I would do for you .The material was cheap VERY cheap (cash)I did all the work for about 2800 includes everything.Except for washer and dyer!All the plumbing material was mine I collected over a short time span(free) Well lets just say I paid for it so long ago it has no money effect its paid for its self.

My assets are worth more than my debt.I'm making money no matter how you slice it up.

Please understand this is my story most ppl don't have access to building materials as cheap as me.I have had a plumbing company for 9 years.And have done pretty well.Giving me the cash to take advantage of other ppl mistakes....I scored big time w/ this house because I had cash ,and right place right time!!

[Angrish]

If you paid 120 for the house, that's really all it was worth. It may have a higher appraised value (175), but if you cant sell it for that (which the bank couldn't) it isn't worth 175, or 180.

You may have 50K on paper, but its not in your pocket.

I can refinace at 180 and where do you think that 50 grand is going to go ?

And the house is worth 180 according to house sells around me ...And I have 1 or more bathrooms than others in the hood and 2 laundry spaces.

The ppl before me paid the 50 and couldn't afford it and forclosed...they don't get money back.I get when I sell the house!

Plus banks can't lower your market value.

[Todd#43]

I can refinace at 180 and where do you think that 50 grand is going to go ?

And the house is worth 180 according to house sells around me ...And I have 1 or more bathrooms than others in the hood and 2 laundry spaces.

The ppl before me paid the 50 and couldn't afford it and forclosed...they don't get money back.I get when I sell the house!

Plus banks can't lower your market value.

If the 50K goes in your pocket on a re-fi, you're paying money to get it. You still wont NET $50K in cash, no matter how you slice it.

Basically, you're created more "wealth" on paper, by leveraging your house to create more debt.

Besides, you still had a cost involved in the remodeling. Just because you can't put a value on it, doesn't mean it wasn't there.

You're right though - banks don't set the market value, but market value is a relative term. Your home might be "worth" more based on what other homes in your area are selling for, but the actual "value" is what someone is willing to pay for it. You paid 120, thats exactly what its worth in real dollars. Unless someone will write you a check today for 180k, and your total outlay to date is less than 130 you havent put 50k in your pocket.

[Angrish]

Also Todd the house was a wreck this is why they couldn't sell for more profit ...they just want the loan to be paid.It would have cost more for them to ready the house to sell than just make 5000 and let some other dik pay for the loan (ME) so they are noy paying !!.The house really just needed cleaned and freash paint ....I had carpet done but I traded work for that and it cost me close to nothing.MAybe a grand? maybe My buddy mike is the carpet king!! hahhaha If you knew him you would laugh!!

[Todd#43]

Also Todd the house was a wreck this is why they couldn't sell for more profit ...they just want the loan to be paid.It would have cost more for them to ready the house to sell than just make 5000 and let some other dik pay for the loan (ME) so they are noy paying !!.The house really just needed cleaned and freash paint ....I had carpet done but I traded work for that and it cost me close to nothing.MAybe a grand? maybe My buddy mike is the carpet king!! hahhaha If you knew him you would laugh!!

Dude, don't get me wrong, I'm not trying to be a dick but you really haven't made 50K on that house.

Ok, the carpet was worth $1,000.00 - you're down to $49,000 now. How much time and money did you spend on the paint?

Seriously...its next to impossible to realize cash from a residential real estate transaction.

[Angrish]

If the 50K goes in your pocket on a re-fi, you're paying money to get it. You still wont NET $50K in cash, no matter how you slice it.

Basically, you're created more "wealth" on paper, by leveraging your house to create more debt.

Besides, you still had a cost involved in the remodeling. Just because you can't put a value on it, doesn't mean it wasn't there.

You're right though - banks don't set the market value, but market value is a relative term. Your home might be "worth" more based on what other homes in your area are selling for, but the actual "value" is what someone is willing to pay for it. You paid 120, thats exactly what its worth in real dollars. Unless someone will write you a check today for 180k, and your total outlay to date is less than 130 you havent put 50k in your pocket.

Well lucky for me remolding cost is very low, And the ppl around me have sold for more than 160 on most accounts...So I'm not worried about not getting my 50 ...I could get it now and make good investments And have just as much worth as I do on paper.Still its money I can gat any time I want to use it.For what I see fit ....IMO I think thats a good investment.

I'm a little different than most I made the cash and made sure I could afford it BEFORE I jump in to all this.The idea of renting is crazy .....this way at some point w/ a house (as long as you don't fuk up)you will get what you put in to it "kinda living for free" sell it get your money back even if its lower by a few % its better than renting< you get nothing and you paid off someone else's shit .

[Angrish]

Dude, don't get me wrong, I'm not trying to be a dick but you really haven't made 50K on that house.

Ok, the carpet was worth $1,000.00 - you're down to $49,000 now. How much time and money did you spend on the paint?

Seriously...its next to impossible to realize cash from a residential real estate transaction.

Your right .....untill I sell it...than your wrong....

Adding my bathrooms and laundrys are worth 15,000 + alone why would you think I'm not making money off this deal ?I'm not selling 2morro

1000 included paint.And to be honest it was less than that the work I traded for cost me about 400 bucks

When I sell I'll make more than 50,000 10 or 20 more Depending on the market. But as long as it comes even close to what it was I'm getting a 35% return in 7 or so years ..thats not a bad investment is it?