Do you think there could be a second Great Depression?

[ButteMT61]

People never talked about them in what context?

Those topics are ones I heard nothing about as a kid. They were taboo. We didn't even know our parents were splitting up until one day coming home from school, we walk in the house, and boom. Personal stuff was that, or hushed rumors and gossip. We felt outcasts as kids with divorced parents. Today, every topic is discussed on TV, radio, and of course, the Internet. We had nothing on credit. It was "save and buy". Families were both blue collar that made their way and moved up to the upper middle class. We were indeed fairly unaware of the issues of the day other than what was on the evening news. Now, in the neighborhood we "gentrified", we still see the streets nearby that have challenges, but they've not appeared to get much worse in the last few years. In fact, as I stated, they're better in some ways. But there's no denying that some of the problems have hit here with businesses closing doors. It actual to made me feel better in an odd way - I really was starting to wonder if the whole recession/depression thing was real.

 

[Baron Kurtz]

Ah, I understand you.

I agree - obviously people discussed these things, but not "in the open" as it were. It still jars me to hear someone discussing very personal matters (court case, divorce, STD treatment regimes, potential rape (!), to name just some of the examples I've encountered personally) on their mobile phone when travelling on the bus.

There seems to have been a seismic shift in (I don't want to get into a discussion of what is "acceptable" as it's not really generalisable) what people are readily willing to talk about in public. They are things that are quite often not inherently embarrassing, of course, but certainly things I wouldn't want the general public to know about me.

 

[LizzieMaine]

Growing up, nobody talked openly about it when a foreclosure happened. But you knew when the for sale sign went up on so and so's farm that it was a foreclosure, it was whispered that the people were losing their farm to the bank.

Contrast this to the way people reacted during the Depression of the thirties: it was very common for the friends of a foreclosure victim to arrive at the foreclosure auction, drive away any outside bidders -- beating them up if necessary -- and then buy back all the items on the block at fractional sums, in order to give them back to the original owner. In Iowa, the Farmers' Holiday Association invaded a courtroom during a foreclosure proceeding, dragged the judge off his bench into the street and tried to lynch him on the spot.

These might be extreme examples, but they indicate something you don't see today: people weren't willing to just sit back and take it. Squatting is at least a step in the direction of people standing up for themselves in the face of predatory financial practices, but people in the Depression were far less willing to let their fate be decided by a bank. They didn't just hold up signs, or camp out in tents -- they fought back. People today, however, would never, ever do that -- and the People In Charge know it.

 

[PrettySquareGal]

These might be extreme examples, but they indicate something you don't see today: people weren't willing to just sit back and take it. Squatting is at least a step in the direction of people standing up for themselves in the face of predatory financial practices, but people in the Depression were far less willing to let their fate be decided by a bank. They didn't just hold up signs, or camp out in tents -- they fought back. People today, however, would never, ever do that -- and the People In Charge know it.

I have to disagree with you here, Lizzie. Many squatters aren't even the original owners:

http://realestate.msn.com/article.aspx?cp-documentid=15819672

 

[LizzieMaine]

True, I wasn't talking about that type of squatting -- I was talking about the people who refuse to leave after being foreclosed upon, forcing the bank to either renegotiate with them or have them forcibly removed.

Either way though, I'd rather see that happen than let the banks get away with what they've been getting away with. Where's the Farmers Holiday Association when we need them?

 

[PrettySquareGal]

Also, many people who lost "their" homes put no money down on it in addition to knowing it was way more than they could afford, which was also unprecedented before the housing mess. Is it really their house?

 

[ButteMT61]

Also, many people who lost "their" homes put no money down on it in addition to knowing it was way more than they could afford, which was also unprecedented before the housing mess. Is it really their house?

I remember when we looked to buy our first house. Agents were pushing us to spend more. We finally got so sick of it, we dumped them and only looked for "For sale by owner" signs. That's what we did. At the peak, the house was "worth" 6x what we paid. Today, it's still worth 3-4x what we paid, but we saw a lot fo folks buying homes they had no right to buy. I feel for some of the less educated folks that got suckered by the banks and agents, but many smart people who knew better did the same thing to have the "biggest house on the block" and I gotta say, I have little sympathy. If you make $75k, you don't buy a $750k house. It's that simple.

 

[Baron Kurtz]

That's right. There were/are certain practices of the banks that were downright fraudulent, but I suspect mortgages were not one of them. From what I've seen, the vast, vast majority of mortgage borrowers knew what they were getting into, and so did the banks. Of course, for whatever reason, the banks got bailed out so they could take a big cold dump on the borrowers, which isn't really fair. It takes some gall for the banks to preach about "not taking on debt you know you can't afford" when we see the unholy mess they got themselves into by doing just that.

I'm with Lizzie - fight back!

 

[LizzieMaine]

None of it would've happened if the banks and mortgage companies hadn't been standing there like the neighborhood crack dealer, with a great big smarmy smile, all too willing to take full advantage of peoples' stupidity, gullibility, or greed. Nor would it have happened if the people in charge of keeping an eye on such things were actually interested in the well-being of the public.

To go back to the car analogy, it's pretty stupid to think you can make the car go faster by cutting the brake lines.

 

[ButteMT61]

Well on this piece we all seem to agree. It's sick, and that the administration bailed out the banks makes me ill. I also get a little sick of some of these folks being called victims though. Many if not most knew what they were doing. The ones that are lower-income and under educated I do feel for. I've seen some really awful stories on some of these "loans". Hey, I voted for Ron Paul, he may not be perfect, but he's the closest thing I could find to an "outsider" as there is today...we're perpetually stupid to keep putting the same fools (parties) back into office...

 

[Atticus Finch]

Yes, as through this world I've wandered
I've seen lots of funny men;
Some will rob you with a six-gun,
And some with a fountain pen.

And as through your life you travel,
Yes, as through your life you roam,
You won't never see an outlaw
Drive a family from their home.

The last two verses from the Ballad of Pretty Boy Floyd, by Woody Guthrie.

AF

 

[Undertow]

There seems to have been a seismic shift in (I don't want to get into a discussion of what is "acceptable" as it's not really generalisable) what people are readily willing to talk about in public. They are things that are quite often not inherently embarrassing, of course, but certainly things I wouldn't want the general public to know about me.

One might propose many reasons for this. I think the answer would be quite complex, especially seeing as it wasn't very long ago when we simly didn't talk about these things to anyone, let alone in public.

I suppose the social mores drift with each new generation, just as fashion drifts. Or perhaps as a result of fashions?

And speaking to some of the previous comments, we should not forget the so called "shadow inventory" of homes that are sitting empty right now while banks wait to process foreclosures. Rather than take behemoth losses on their books, banks have been letting some homes sit vacant without posting signs or actually "foreclosing" on the property. I believe larger banks are holding back so as not to flood the market with cheap homes thereby wrecking current home prices (which are seriously inflated still).

 

[Undertow]

Also, many people who lost "their" homes put no money down on it in addition to knowing it was way more than they could afford, which was also unprecedented before the housing mess. Is it really their house?

And to add to that, folks seem more inclined to live on credit and loans today. There was credit in the 20's-40's, but it was one person or business allowing someone to purchase using an in-store credit line, and it was based on a, now forgotten, honor system. For instance, the local grocer may provide a family with groceries for the week and write the total charge in his ledger. At the end of the week when money was doled out to the working man or woman of the home, they would square away with the grocer. They may be able to get away with one more week without paying, but eventually there would be a reckoning and they wouldn't be spending the grocer's dollar any more.

Today, folks purchased their television on the Chase Bank Visa, the living room set and dining set on the in-store Visa, the beds and rugs were financed through another home store Visa. Food and gasoline were purchased partly through cash and any excess spilled over onto the Master Card. Video games and consoles are typically picked up via credit, same as the family computer (if the family should be so lucky). The family vehicle was either paid for in cash if it was cheap enough, or perhaps an auto loan through the dealership (unless they were lucky enough to get one through their credit union). And the list goes on...

That's not to say we should make a value judgement on folks using credit - some people square away their credit bill each month. Yet, there is a certain detachment with purchasing items and actually paying for those items. It's almost like no one owns anything anymore.

When you are a society of debters living under great debt, you do little to rock the boat. You don't quit your job, you continue consuming, and you most certainly don't drag a judge out of the courtroom by his collar and try to hang him. Maybe we need a sea change? Hard telling, but this thread certainly does point out the obvious need for folks to reattach soon or find themselves in the poor house.

 

[jamespowers]

And to add to that, folks seem more inclined to live on credit and loans today. There was credit in the 20's-40's, but it was one person or business allowing someone to purchase using an in-store credit line, and it was based on a, now forgotten, honor system. For instance, the local grocer may provide a family with groceries for the week and write the total charge in his ledger. At the end of the week when money was doled out to the working man or woman of the home, they would square away with the grocer. They may be able to get away with one more week without paying, but eventually there would be a reckoning and they wouldn't be spending the grocer's dollar any more.

Today, folks purchased their television on the Chase Bank Visa, the living room set and dining set on the in-store Visa, the beds and rugs were financed through another home store Visa. Food and gasoline were purchased partly through cash and any excess spilled over onto the Master Card. Video games and consoles are typically picked up via credit, same as the family computer (if the family should be so lucky). The family vehicle was either paid for in cash if it was cheap enough, or perhaps an auto loan through the dealership (unless they were lucky enough to get one through their credit union). And the list goes on...

That's not to say we should make a value judgement on folks using credit - some people square away their credit bill each month. Yet, there is a certain detachment with purchasing items and actually paying for those items. It's almost like no one owns anything anymore.

When you are a society of debters living under great debt, you do little to rock the boat. You don't quit your job, you continue consuming, and you most certainly don't drag a judge out of the courtroom by his collar and try to hang him. Maybe we need a sea change? Hard telling, but this thread certainly does point out the obvious need for folks to reattach soon or find themselves in the poor house.

So we have more Pa Kettle's than we used to---in other words.

 

[jamespowers]

Well on this piece we all seem to agree. It's sick, and that the administration bailed out the banks makes me ill. I also get a little sick of some of these folks being called victims though. Many if not most knew what they were doing. The ones that are lower-income and under educated I do feel for. I've seen some really awful stories on some of these "loans". Hey, I voted for Ron Paul, he may not be perfect, but he's the closest thing I could find to an "outsider" as there is today...we're perpetually stupid to keep putting the same fools (parties) back into office...

They are certainly both responsible. Grandma always said that you can't cheat and honest man and that if it sounds too good to be true---it probably is.

 

[PrettySquareGal]

I have always lived within my means.

When I was a kid, that meant I wore hand-me-downs and was picked on for it.

In grad school, I worked as a grad assistant, had a full course load, and subsided on microwave popcorn, pasta and expired boxed goods (not sure it was legal, but a store had a basement where they sold canned/boxed things slightly beyond the expiration date).

During the housing bubble I rented a place in a crummy neighborhood and saved my money for a down payment on a house. We lived next to a drug/party house and it was rotten. But in retrospect I respect what I did. I didn't bite the easy money/debt bait.

I pay my credit card in full every month.

I buy myself treats when I have money saved for it.

I'm a throwback!

 

[LizzieMaine]

Yes, as through this world I've wandered
I've seen lots of funny men;
Some will rob you with a six-gun,
And some with a fountain pen.

And as through your life you travel,
Yes, as through your life you roam,
You won't never see an outlaw
Drive a family from their home.

The last two verses from the Ballad of Pretty Boy Floyd, by Woody Guthrie.

AF

Or, the theme song for the Farmers Holiday Association:


A holiday for farmers!
A holiday let's hold!
We'll eat our corn and wheat and meat and eggs
And let them eat their gold!

 

[LizzieMaine]

When you are a society of debters living under great debt, you do little to rock the boat. You don't quit your job, you continue consuming, and you most certainly don't drag a judge out of the courtroom by his collar and try to hang him. Maybe we need a sea change? Hard telling, but this thread certainly does point out the obvious need for folks to reattach soon or find themselves in the poor house.

Just like when you're a drug addict, your whole life revolves around getting your next hit. I pity the addict -- but I hate the dealer who got him addicted in the first place. The finance industry is like the guy hanging out in the schoolyard handing out reefers to the sixth-graders.

You have a system which relentlessly beats the public over the head to BUY BUY BUY CONSUME CONSUME CONSUME BUY BUY BUY BUY SPEND SPEND SPEND CONSUME CONSUME CONSUME, insists that consumption is the only way "the economy" can grow, goes to every possible extreme to brainwash the hapless rubes into thinking they're defined in every way by what they own -- and then sticks its leg out, trips them up, laughs when they fall on the floor and says they "should've watched where they were going."

I tell you this. If the day comes when that system is swinging by its neck from a lamp post, I'll be damned if I'll lift a finger to cut it down.

 

[jamespowers]

Also, many people who lost "their" homes put no money down on it in addition to knowing it was way more than they could afford, which was also unprecedented before the housing mess. Is it really their house?

It never really was theirs for a good amount of the defaults. They lied about their incomes and a host of other things. Some of these frauds were aided by their loan brokers and they need to be held accountable---but you can't cheat an honest man.

 

[ButteMT61]

Here's my story on credit. I had an AMEX (Au or Pt, don't remember). I had it for ~13 years and it had a really high max on it. My wife and I were both making the best money we had ever made (at the same time). A few years ago, I get this call from AMEX, they wanted to re-verify my finances. I asked why - we pay the bill off every month, right? "Yes sir, you do. But we've determined that the amount you spend is more than you should have". I said "Really? So are you accusing me of being a drug dealer or something?" She said "No, but we just need to verify your income and your wife's income again". *Note that we paid all of our bills using the AMEX, and then made one payment every month - it was very handy, and cost us nothing. I told her that there was no way in h3ll I was going to do that - my account is on-time and I have a perfect record. She said "I'm sorry Mr. XXXX, but if you don't do this, we'll have to cancel your account". I said to go right ahead, which seemed to stun her. "OK, you have ten days before it shuts off". Good I said, so be it. And sure enough, they did.
For me, that was my wakeup call in regards to credit. We have paid off all but one card, and a couple store cards we use for clothes for the kids/grandkids, etc. I was really good with money as a kid - that is, I saved and bought things cash. I wasn't stingy, but I was a lot smarter with it. I'm trying now to get back to that way of life, and they don't make it easy. It's a government sponsored evil IMHO. And people really should stop using it. I don't see it happening though...