Supposedly a new report came out in the last hour of trading that said American lending firms are crumbling big time and foreclosures are up something like 60%. The Dow immediately erased all its gains for the day and then lost 150 points.
I wrote abouth this 3-4 years ago when the negative am mortgages raised it's ugly face again. They were sold with 4-4.5% adjustable rates and a 1-1.25% payment with interest accuing. The accrual erodes your equity overnight, then the rates adjust higher and more equity is lost. Go to sell in down market and you're headed for a big time loss. The sole option to stop paying, let the house be sold for default. Even the lenders are having a hard time recouping the full principal of the loan.
Alternately, 4-4.5%, 1-3 year adjustable rate loans were taken out and they have now adjusted to 7-7.5% which means on a 30 year loan, your required monthly payment has nearly doubled. Not too many can hold that payment when you were sucking wind to make the 4-4.5% payment.
Most affected by this - low to middle market housing. The multi-million dollar homes haven't been affected as greatly.
Big, I first bought into a 401K in 1991, and I've been putting more money into the market every two weeks. I didn't pour my life's savings into the market on the day that Bush was elected. With a 401K, you buy when the market is going up, and you buy when it is going down. Over the last 100 years (or whatever) the market has been a very good long-term investment, so I'm not concerned with daily swings.
The bond market is a different issue in the short term, as it affects payments to retirees, as well as those sucker-bet adjustable rate mortgages.
Big, I first bought into a 401K in 1991, and I've been putting more money into the market every two weeks. I didn't pour my life's savings into the market on the day that Bush was elected. With a 401K, you buy when the market is going up, and you buy when it is going down. Over the last 100 years (or whatever) the market has been a very good long-term investment, so I'm not concerned with daily swings.
The bond market is a different issue in the short term, as it affects payments to retirees, as well as those sucker-bet adjustable rate mortgages.
Yeah but the last 100 years technology development skyrocketed. I don't see as much meaningful technological advances in the future unless its in space technology. Most people don't need a lot of technology we already have.
Also, oil was abundant and now it is becoming scarce and expensive. Unless another fuel reveals itself, the growth will have to slow down throughout the world.
Bad news for stocks! 
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