<p>kelsmom, I really feel badly for you and your H under that scenario. I wish you much luck in finding a job, and I hope it’s one you like.</p>
<p>Two weeks after the Federal Deposit Insurance Corp seized IndyMac Bancorp Inc, the Office of the Comptroller of the Currency said it closed First National Bank of Nevada and First Heritage Bank NA of California.</p>
<p>First National, characterized as undercapitalized, had total assets of $3.4 billion and $3 billion in deposits. First Heritage, described as critically undercapitalized, had assets of $254 million and $233 million in deposits, regulators said.</p>
<p>The FDIC said the cost of the transactions to its insurance fund is estimated to be $862 million, adding that the two failed banks represent just 0.3 percent of $13.4 trillion in total industry assets at about 8,500 FDIC-insured institutions.</p>
<p>[U.S</a>. regulators seize two more banks, engineer sale | Reuters](<a href=“http://www.reuters.com/article/topNews/idUSN2528445020080726]U.S”>http://www.reuters.com/article/topNews/idUSN2528445020080726)</p>
<p>These were private banks so no public shareholders took a bath. The hit to the FDIC after IndyMac is about two percent. I have the feeling that this sort of thing is going to be a regular thing. One of the banks is in Newport Beach, CA which is a really wealthy area.</p>
<p>I’ve always felt that when / if hard times hit, the last thing you should penny pinch on is food and beverage…sure you can cut out those expensive cuts of meat and such, but you shouldn’t go around living off ramen, processed meats, liters of soda, etc to save $$$. I consider fruits, veggies, chicken, oj, fish, nuts, etc an insurance policy in and of itself by keeping your body healthy. Knock on wood, but I’ve only gotten sick once the past few years with the lone exception being living in the dorms where it seems like when one gets sick , everyone does</p>
<p>I have also sold a fair amount of “trinkets” that are cool, but could definitely do without…made about $1,000 via ebay and have used it for essentials. Lets hope not, but if the downturn gets severe and people need money and have cut out tv, phone, etc, they’ll be looking towards this stuff…and once supply greatly outpaces demand you won’t get near the amount of $ offered now as you will if a great american garage sale happens</p>
<p>Have also been enjoying much more free things. my main activity is disc golf, and play around 70 rounds per year having one within 2 miles of my campus and 1 mile from my parents house</p>
<p>We know two families who have considered going back to the “old country.”</p>
<p>In one, the husband, from the U.K., lost his job a year ago and has been unable to find anything but temporary work. The wife sells Mary Kay Cosmetics. Health insurance is becoming a problem (too expensive) and their son will graduate from high school next spring. Moving back to England would help take care of health care and college.</p>
<p>In the other family, the husband spent his first eight years in Italy and is still a citizen. This family has nearly collapsed economically after two years of paying $900 per month health insurance premiums (with a $1,500 deductible on each member). They have considered moving back to Italy, where the health care system is considered excellent.</p>
<p>SuNA- I am curious about the Italian family- I pay $400-$500/mo for health insurance with a $7000 deductible, so essentially it is there just in case of disaster. I would love to skip it as we never use it, but I feel I have to have it, just in case.</p>
<p>I am not sure how old your friends are, but why has the health premium bill made the difference in their lives and if that is the main item, why not move to a higher deductible plan to lessen the impact?</p>
<p>This thread makes me wish I was a billionaire, or worth five million at least, so I could PM people that have cut their cable and such and tell them to send me their local cable company info or whatever and I’ll buy them the coverage for a year or whatever. I rarely feel any regrets for being a lazy bum and not earning money, but this is one of those few times like I feel I ought to try to write a best seller or something so I can help out more than by just volunteering in the local community and attending fundraisers of all kinds locally.</p>
<p>Anyway, to answer the OP’s question, it’s affected us marginally. My husband and I still eat out the same as usual ($140 for dinner tonight, about the same two nights ago, and likely will be the same Saturday night; we have been saying for ages we should cut back, as much to help weight gain from occurring as to save money, but haven’t put any effort into eating more at home yet) and we drive small cars and don’t worry much about gas usage (heck, we’re even renting mini vans for a trip in August and another one in September and driving all day to our destinations). However, we aren’t taking any major vacations like a 21-day cruise this year as our stocks are down and I tend not to want to blow money on big trips when our investments are down. We also might have just me going to hear our son give a presentation in September rather than both of us as the price of airline tickets has <em>sky rocketed</em> and we’re not even taking a rocket to the moon or anything, so I’m having a bit of a tough time adjusting to the cost going up so quickly there. We still have fiber optic for TV and just got three iPhones that will run us a total (for the phones, activation fees, Internet service, voice service, taxed and fees, whatever) over $6,200+ over the first two years (could have had a week long cruise with that money). We belong to a gym but don’t use it often enough to be getting our money’s worth out of it (we played racquetball last night, but rarely do), but I feel like we should pay a fee whether we are using it or not (I call it the “Lazy Bum tax”) to support other people who <em>do</em> use it.</p>
<p>In short, the economy has us not taking the luxury foreign travel trips we have in the past (especially now that our dollar is so bad that even Canada’s dollar is worth more for the first time in history), and not taking as many flights as we would otherwise, but daily life is pretty much the same as usual.</p>
<br>
<br>
<p>I had no idea I was so rare (at least when it comes to teeth - I realized my DNA isn’t like anyone else’s unless I have a secret identical twin I was never told about). I’m under 50 and have teeth that are less than perfect as I refused to have my parents spend $1K (which was a LOT more in the 70’s than it is now) to have me get braces. I think what’s worse for my teeth is the yellow color (my dad has white teeth, but I got my mom’s yellow teeth, and my mom had naturally straight teeth, but I got my dad’s not so straight teeth…my brother grabbed all the good DNA and left me nothing, I tell ya), and I haven’t yet tried any of the whitening stuff as I fear a report coming out someday saying the treatment is linked to tongue cancer or something, plus I feel, “If you can’t love me with my teeth as they are, no problem - I’ve got plenty of people who do.” Our son similarly turned down braces (not for the price factor so much as that he just feels he is fine the way he is naturally), and it’s actually good that he did as by the time he was 16, the teeth had straightened out on their own just fine (now we just need to get his wisdom teeth out before they mess up how his teeth look as two are coming in at 45 degree angles, our son tells us).</p>
<p>In any case, I’ve never been lower than the middle class. I started out in a family with top 1% in income and net worth (from parents who never had financial help from their parents once in adulthood, just as I’ve had no co-signing or down payment help from parents to buy a car, house, etc. nor big checks each Christmas or whatever that many rich couples do for children). My husband and I are probably around top 10% now, so I’ve come “down” in pecking order for SES, but I think that is more a factor of:
- My realizing that money doesn’t equate to happiness and jumping off the rat race pretty early in life
- My not finding the statement my mom fed me of “It’s as easy to fall in love with a rich man as a poor man” to be true for me (the millionaire in his mid-20’s and multi-millionaire by his late 20’s that I dated were way too type A for me to ever be happy living with them, and I married a prince who was making around $30K/year at the time we got engaged and had probably under $10K in net worth, but with time, he quickly moved up in income and net worth, just not to the really big bucks department of many relatives of mine).
- My being a lazy bum by nature (not that people could tell this when I was gliding through college and graduate school with ease, but it’s always been the case).</p>
<br>
<br>
<p>Ditto here. The only time my husband and I used credit cards as a “loan” was for my husband to buy my wedding band (it’s not gold, but has rubies and diamonds in the band and he had already blown thousands on the engagement ring a few months earlier) and our honeymoon (we went 5 star hotels in Hawaii as we figured you only do a true honeymoon once), and even then, the bills were paid up within a few months after the wedding, not years later.</p>
<br>
<br>
<p>Ditto. We had our mortgage burning party (burned a copy, not the original, in an outdoor fireplace bought especially for the party) a few years ago and we’ve been loving have no debt of any kind (as we haven’t taken a loan for a car since quite early in our marriage and drove those cars for about 18 years and then paid cash for their replacements).</p>
<br>
<br>
<p>Okay, so you have us beat there. 
My dad drove a 1963 red Corvette convertible for about 24 years before selling it (for about three times what he had paid for it when he bought it new and he likely could have gotten more had he tried as it sold ever so quickly), but he had to replace the engine several times and we weren’t interested in doing that with our cars. Have you had major repairs/replacements or do you own a Toyota truck or something?</p>
<br>
<br>
<p>Okay, not a truck then. :)</p>
<br>
<br>
<p>We’ve bought two of our cars one year old and two new (seems we always have one of each), and the first one I bought one year used was hit by an 18-wheeler five or six years after I bought it and the blue book value for it was still greater than what I paid for it. I’m a big fan of buying cars one year old direct from the original owner direct from his/her house (so the person can’t be selling you a lemon as they’d be afraid you’d egg their place) and with the owner having a new model of the same car in the garage or on the driveway (as was the case for the first car I bought one year old).</p>
<br>
<br>
<p>Ditto.</p>
<br>
<br>
<p>Also the same here.</p>
<p>Haven’t read all the pages of posts yet, but in case nobody else has shared the snopes.com take on gas savings methods (half tank information and such):</p>
<p>[snopes.com:</a> Tips on Pumping Gas](<a href=“http://www.snopes.com/inboxer/household/gastips.asp]snopes.com:”>Tips on Pumping Gas | Snopes.com)</p>
<p>I want to add something positive on this thread : </p>
<p>the price of a barrel of oil had retreated significantly and the stock market had gone up 10 -20 + % from it’s lows. Some of our 401ks recovered somewhat so our next egg stopped shrinking and even bounced back some.</p>
<p>Anyone feel a bit better ? I know I am today.</p>
<p>For us, I’ve been thinking more about how much driving I do and cutting back on driving. I’m also paying more attention to airfares when booking & scouting for the best bargains I can. More likely to redeem miles whenever we can for free travel.
We’re a bit apprehensive that D was just admitted as a transfer to a private U, but fortunately she will enter as a 2nd semester sophomore, so we shouldn’t have to pay for as many years tuition as if she started as a freshman. Since she was not offered (& is unlikely to receive any offers) any merit money & we are also paying S’s tuition at the same expensive U (tho he did get merit $), we’re glad it will be less time to be paying tuition.</p>
<p>Hubby is already thinking he may be needing to work more years than anticipated because D was admitted. We were surprised by her admission, since that was the only application she submitted & her grades were below their normal transfer admit grades.</p>
<p>We have not made dramatic changes to our lifestyle at this point. We do notice that food and gas are MUCH more in HI than previously. Have noticed a lot of restaurants who have closed for business in the past 12 months, with more especially in the past 2 months. This seems to be especially in the smaller, less expensive places we like to frequent.</p>
<p>Munchkin, I am feeling better too…Who would have thought a couple of years ago that we would be excited today to see gas prices below $3.90?
My only question is how come they are not lowering prices as fast as they raised them? It just doesn’t seem right.
As for the 401K there is hope that it will continue to improve. For a while there I did not open the statements when they arrived in the mail. I just did not want to know how much was lost. On a positive note, we aren’t retiring anytime soon, so I know that it will all work itself out, before we do.</p>
<p>Paying for college has caused quite a bit of pain for this household, even with aid. My HS senior will be encouraged to stay in state AND stick with a state school.
I’ve looked all summer to change jobs so that I can step up my hours from school hours (30 a week) to “real” hours to help out more. The last job I applied for I received an email back saying that they received 700 applicants…can that be? Maybe it was a typo and she meant 70?
I may start playing the lottery, if I ever have a spare dollar in my pocket.</p>
<p>Ever noticed how the gas thing is the cause for all the ups and the downs- the sound bites on the news say “oh nooo, the sky is falling, oil is up, the Dow is down” Then they say, “oh nooo, oil is down, oil company profits are down, the Dow is down.”</p>
<p>The Dow was up 300 points today and up almost 1,000 points over the last three weeks. Volatility is due to horrendous earnings in the financials with quite good earnings in tech stocks.</p>
<p>Oil falls and dollar is strengthening–maybe these guys know what they are doing. If the media would cut the doom and gloom talk and be a little evenhanded this down period would end much quicker.</p>
<p>[FT.com</a> / MARKETS / Currencies - US stocks surge on ?watershed? dollar jump](<a href=“US stocks surge on ‘watershed’ dollar jump”>US stocks surge on ‘watershed’ dollar jump)</p>
<p>I’ve been reading about Central Bank intervention pushing the dollar up. I’d actually prefer that the dollar stay down for a while. It’s providing quite the benefit to our exporters and tech companies and helping to keep jobs in the US.</p>
<p>I know that it’s no fun to consumers but consumers need jobs first before they can spend.</p>
<p>End?? Barrons, after reading your posts, I never thought there was a problem. Didn’t you write posts saying there wasn’t a recession, or job losses, and real estate would bounce right back?</p>
<p>It’s not going to end soon Barrons. ;)</p>
<p>And when the economy comes back… it will be nothing like the 6 years before the last 2…</p>
<p>Nobody is going to buy garbage paper again for awhile. It’s going to take time for financial institutions to repair their balance sheets. People who buy homes will actually have to have some ability to pay back their loans (making real estate priced less).</p>
<p>The easy credit days aren’t coming back for many years. Which means lower home prices, fewer sales, etc.</p>
<p>No more consolidating all your loans and borrowing 125% of your home’s price. No more, choose which payment plan you want. At least not the one where you don’t pay the full interest payment and just add the interest payment to the principal of the loan.</p>
<p>After a bubble, you get a fall in prices… then a small rise and then prices sit until incomes catch up.</p>
<p>Stock prices haven’t gone much of anywhere for 10 years now. Real estate will be the same.</p>
<p>Adjusting for inflation.</p>
<p>If the government can get some going.</p>
<p>Official inflation is overstated now if you include housing. Of course, it was understated between 1999 and 2005 by huge amounts.</p>
<p>The government doesn’t get the inflation numbers correct which doesn’t help monetary policies or the economy.</p>
<p>I hear it is very difficult to get a loan.</p>
<p>A friend of mine is pretty rich. He doesn’t have a mortgage. His house is worth about $10 million. He had a credit line of $3 million with a major bank. The bank wanted him to deposit $1 million or the credit line disappears.</p>
<p>First off, if he deposited $1 million and then used a $1 million credit line, he would lose approximately $50,000 a year.</p>
<p>How stupid is that?</p>
<p>So the bank cancelled his credit line. So let’s see, here is a customer with home equity of $10 million, and the ability to pay back a $3 million loan, losing his credit line, while this same bank was loaning money at close to 100% of loan to value with people who didn’t have a pot to pi@@ in. </p>
<p>One… bankers can be incredibly stupid. Loaning to people who can’t pay back and now refusing to loan to people who can.</p>
<p>So</p>
<p>Two…this economy isn’t going to be very good for awhile.</p>
<p>Three… one of the reasons oil prices are coming down is because people can’t afford the gasoline anymore. (The increasing dollar does help too).</p>
<p>"Nobody is going to buy garbage paper again for awhile. It’s going to take time for financial institutions to repair their balance sheets. People who buy homes will actually have to have some ability to pay back their loans (making real estate priced less).</p>
<p>The easy credit days aren’t coming back for many years. Which means lower home prices, fewer sales, etc.</p>
<p>After a bubble, you get a fall in prices… then a small rise and then prices sit until incomes catch up."</p>
<p>Conventional wisdom. And I’d tend to agree. But we have central bankers that think that they’re the masters of the universe trying to intervene. It’s certainly a monumental struggle generating massive volatility in the markets.</p>
<p>“Stock prices haven’t gone much of anywhere for 10 years now. Real estate will be the same.”</p>
<p>You haven’t been watching eggs. Check out a chart of Cal-Maine. Or eggs. Or natural gas. Or oil. Real Estate is all about location, location, location. I have a coworker buying a house in Boston and his comment is: what price declines? Prices have fallen in the areas where people don’t want to live.</p>
<p>“If the government can get some going.”</p>
<p>There aren’t a lot of choices. Stock market. Real Estate market. Maybe student loans. The Real Estate market is spent. Maybe time to turn back to the stock market.</p>
<p>“Official inflation is overstated now if you include housing. Of course, it was understated between 1999 and 2005 by huge amounts.”</p>
<p>Inflation figures are tied to rentals on housing. Rental prices are going up. Rental prices went down in your time frame because people wanted to buy houses. So the inflation numbers, at least in regards to housing, were accurate in that they reflected what people NEEDED to pay for housing. That they chose to pay far more for housing was their choice but not what you would need to pay for housing.</p>
<p>“The government doesn’t get the inflation numbers correct which doesn’t help monetary policies or the economy.”</p>
<p>Distilling complex human behavior in one number is a difficult task.</p>
<p>“I hear it is very difficult to get a loan.”</p>
<p>My coworker had no problems getting a loan. Others that I know have had no problems getting loans recently.</p>
<p>"A friend of mine is pretty rich. He doesn’t have a mortgage. His house is worth about $10 million. He had a credit line of $3 million with a major bank. The bank wanted him to deposit $1 million or the credit line disappears.</p>
<p>First off, if he deposited $1 million and then used a $1 million credit line, he would lose approximately $50,000 a year.</p>
<p>How stupid is that?"</p>
<p>If he’s pretty rich, why does he need a credit line? Just pay expenses with cash.</p>
<p>“One… bankers can be incredibly stupid. Loaning to people who can’t pay back and now refusing to loan to people who can.”</p>
<p>Why do you think that they are stupid? They are doing what’s in their own best interest. Not in the interest of the borrower. Not in the best interest of their company. Not in the best interest of the investor that buys the paper. The banker wants to maximize his bonus, salary, and stock options.</p>
<p>Perhaps the problem is one of character where there is concern for the borrower, company and investor.</p>
<p>“Two…this economy isn’t going to be very good for awhile.”</p>
<p>I made a lot of money shorting stocks in 2001 and 2002. 2003 hit like a ton of bricks. It took me a while to catch the trend change. If you think about it, we had a massive market crash in the NASDAQ from 5000+ and we’re not even half of that right now. We had 911. And then the market staged a massive comeback rising over 100% a little more than two years after that.</p>
<p>Which has taught me that markets and the economy can be very resilient.</p>
<p>“Three… one of the reasons oil prices are coming down is because people can’t afford the gasoline anymore. (The increasing dollar does help too).”</p>
<p>That’s called demand destruction. The people where I work have not changed their behavior. One guy bought a new Corvette. Many complain about high gasoline prices and have talked about replacing vehicles but the number that have actually done this is small. Those concerned about fuel economy in the past are still concerned but they already downsized long ago. This group of people isn’t typical though. But there are a lot of people that haven’t really been affected by the current economic problems.</p>
<p>That’s why I said down period and not recession. As to real estate, commercial is still doing pretty well and the major downward moves in residential are in relatively few speculative markets–parts of California, Florida, Arizona, Vegas several of which I warned about well before they busted–mostly in the outlying areas and condos. I have heard that well located areas in SF and LA are not down nearly as much as the averages which are being dragged down by crap out in the boonies. I’d love to see the numbers broken out by more selected areas such as well established neighborhoods like Santa Monica vs Riverside. Seattle- Portland have remained relatively strong with some weakness in the far out suburbs.</p>