A SHORT EDITORIAL BY DUBLBAGN
Its funny to me how people dont know whats going on. People pay more attention to what their favorite celebretards are doing than they do to our own country.
Here is whats going on for all those who dont know..FLASHBACK TO 2001..Lenders got the OK from large financial institutions to bulk together their mortgages and sell them to the institutions (AIG, FANNY, FREDDY) people were getting approved for more house then they could afford (not unusual they will always try to do this and always will), but these larger institutions were making so much money (on their financial statements ie..long term mortgages will bring up long term money, but only if they are paid and do not default!!!) that they were approving horrible loans....0% down loans....interest only mortgages......(basically all the rock financial stuff)....
FLASH FORWARD TO 2005 ......So after all these people finally had to cash in on the terms of these adjustable rates and balloon payments they found out that they did not have enough money to stay in the house.....so they get kicked out....bank takes the house...but its happening so rapidly that supply is raising faster than demand (more houses then people to buy them).....so the value of the homes fall for everyone (grama who has had her house for 100 years, your parents, the hot shot 21 year old who thought he was a baller).......
2006-present time.......now back to the larger institutions, since these properties are no longer bringing in positive cash flow (account receivable for all you basic accounting students) these properties are looked at as a liability (since the larger institutions now have to perform upkeep)...so not only are they not getting the money for the house, they are spending money to keep it up to code and looking nice so someone might buy it (which is not happening).....now they have balance sheets that are weighted towards the negative...and once you have more cash going out then you have coming in its always a bad thing......and with the amount of negative assets (homes, properties, personal credit lines, loans, etc..) that these larger institutions had lent out the problem was multiplied by a million...thats why they crashed so fast.....
so what does it all me for average joe consumer with a job a house a family and a savings account...nothing much for the most part.....its still going to be a struggle to keep up with my ballerish type ways of spending, and my kick game will most likely get better since you all will be selling them to me to pay rent.....but in the long run (next 6-18 months) it will mean less jobs (i dont think this is possible in Michigan), harder to get loans (so you better like your car or have tons of cash on hand), harder to get a mortgage, and you might even seen your credit lines get reduced or even closed on the VISA/MC....also your dollars will be worth less, with the minimum wage just being raised, inflation is climbing faster than your banks interest rate...so basically in 18 months your money will be worth about 2% less....but inflation is a whole other topic....
hope this cleared some stuff up, and if you wear a sz 11-13 and need to pay rent hit me up....
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