Categories: Sound Off
March 18, 2008
Later this week, we're planning an open mic on the economy. Is the country heading for a recession? Are we in one now? What happened to all the value at Bear Stearns? What can you do with a weakened dollar? Should you wait to buy a house or borrow money for school — or go for a lower rate now?
Post your questions about the economy and we'll throw them into the mix.
Okay, I met a woman who worked for Bear Sterns and I swear she was wearing $4000 worth of clothing. What happened to this company that made it so vulnerable?
The ???:$ rate is extremely attractive for Europeans. Is the dollar ever going to rally? Is it smart to buy dollars? What are the risks?
OK, here's my situation. I bought a condo in October 2007 in inland Southern California. I paid $315K while the man who sold it to me bought it for $379K a year earlier. I thought the market was hitting bottom, but the value of my home is still sinking. Now here's the question. I went with an interest only loan at 6.75%. I thought it was a 30-year fixed with 10-year interest only. However, when I got the loan docs a few weeks before signing, I realized it was a LIBOR ARM loan and that the rate would change after 7 years. I contimplated just bailing out then, but I forged ahead despite my unease. My loan broker assured me that I could refi at some point in the future to a fixed loan, or that I could sell. Well, I won't be able to sell if the condo's value doesn't recover in 7 years, and I fear inflation could send rates into the stratosphere for years... So, do I jump at a refi now while rates are still low? I can afford a principal and interest loan. It might be hard, but I'd rather take action now so I don't kick myself 7 years from now when I'm unable to refi this loan... Ugh. Help. BTW This was not a subprime loan. I have excellent credit and a good job.
Will the Economic Stimulus Act mitigate economic slowdowns?
Everyone says diversify investments: stocks and bonds, domestic and overseas. From what I have seen over the last decade or so is that all my investments tank at the same time and to about the same degree. I don't see any sort of investment rising now. Is diversification overrated in a global economy?
I thought I had found all the ways there were to lose money, but recently I discovered that my broker/banker/investment-manager itself may go bankrupt (etrade). Moving to a different company would be painful and no guarantee that the new one won't go belly up also. With stocks, IRAs, Roth IRAs, and money market accounts what is likely to happen to my investments if my broker breaks?
Do you think we are purposely devaluing out dollar?
There are benefits to this of course, but is this someone???s intention.
As an expatriate South African, I know South Africa devalued the Rand when I was a child, however years later people would say it was one of our biggest mistakes.
Do you think we are purposely devaluing out dollar?
There are benefits to this of course, but is this someone???s intention.
As an expatriate South African, I know South Africa devalued the Rand when I was a child, however years later people would say it was one of our biggest mistakes.
I bought my condo (my very first home purchase) 3 years ago, right before the housing bubble burst. I'm not complaining; I was happy with my house. But my wife and I are worried about the adjustable rate hitting us two years from now, not so much that we can't afford it but because we won't be able to refinance to a fixed rate before the adjustment. Will anyone refinance us with a fixed rate in two years or should we just save up and prepare for the bump?
How did mortgage backed securities work? What was the anticipated rate of return? It seems to me that a rate high enough to interest investors would be higher than you or I would be willing to pay for a variable rate mortgage.
How did the federal gov't figure that the best use of billions of dollars in resources was to break it up into $600 chunks to be spent (or saved) as individuals see fit? (Mine is going to cresit card debt. Good for me, but not exactly what they had in mind.)
Along the lines of Maura's question: I realize the government expects us to go out and spend our $300, $600, or $1,200 checks to boost the economy, but isn't it ultimately wiser for Americans to apply that money to debt of any kind?
It doesn't accomplish what the stimulus plan was intended to do, but I feel that is a flaw in the design on the plan. Why give us checks that can be spent any way we want? Why not debit cards that have an expiration date? Do they really think majority of people are going to shop when logic seems to say long-term investment?
I caught the segment this morning. Thanks! It was most informative. I hope we have similar opportunities in the future.
What would have happened if the discount rate was not lowered to facilitate it and nobody bought Bear Stearns?
Are mutual funds subject to dangerous caprices of the market too, caprices that could leave someone penniless in a matter of days or weeks? Different caprices than stocks, perhaps, but still dangerous in certain circumstances? For example, if the umbrella company holding the fund were to fold, what would happen to the mutual fund and its shareholders?
I have a turtle! =)
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