And, in response to the “falling knife” analogy. I actually don’t disagree. However, when do you know when the knife has landed? How long do you wait? There is NO WAY to ever predict prices with stocks or with real estate. You can wait for the PERFECT time to buy or you can analize your own personal situation and make an informed decision on where you are right now with your local market and your finances. If YOUR timing is right to buy, then buy. Or you can wait and wait and wait and miss some amazing opportunities. I seize opportunities as I find them. I have missed amazing opporunities by waiting too long.

And for all who want to play their own little personal victim hand, that is fine. No book, author, financial guru, or blog is going to change that for you. That is a mindset you took years to develop and it is your pattern. Cling to it if you must. Wallow in blame if it makes you feel better. But doing so, won’t change your situation. My suggestion is to take control of your life, become powerful by assessing your situation, and taking action on it to improve it.

Thanks for the feedback from all. Happy to throw my two cents worth in.

Larry Winget

New York Times/ #1 Wall Street Journal Bestseller, You’re Broke Because You Want To Be
New York Times/ Wall Street Journal Bestseller, It’s Called Work For A Reason
#1 Wall Street Journal Bestseller, Shut Up, Stop Whining & Get A Life!

I do tend to side with Mantari on point #3. The falling knife analogy is apt. I still think we’ve not hit the point where it’s an excellent time to buy a house. The tide is still falling.

Also, if Mr. Winget is anti-bailout, it would seem that he’d also be against the proposed $7k incentive to buy foreclosed property. That’s a bailout, too. It’s just not bailing out the people being foreclosed on. It’s indrectly bailing out local governments and banks so that they can get the REO off of their books more easily. This incentive also has the effect of boosting the prices for such properties because there will be more bidding competition.

I’m getting really tired of this “blame the victim” hogwash. If anything people are victims of their own greed and stupidity. This victim mentality stuff has got to stop.

As Independent George mentions in comment #25, corporations are facing the music. They were stupid and now they are paying the price for that stupidity.

Bear didn’t get bailed out; Bear is dead (though Citi did effectively get a subsidy they really didn’t deserve); they were sold for almost a 90% loss from the year before. True, it should have been a 97% loss (as per the original deal at $2/share), it’s still better than the bailout I’d feared.

I’m not asking you to weep for the lenders; they wrote themselves into this mess, but the point is they’re already paying the price for it. I think people railing at the banks aren’t getting the fact that when you lend out 500k for a 400k house, which is then auctioned off 300k after default, the bank just posted a 40% loss.

All of this, though, is on the shaky assumption that there is no bailout – which is Winget’s original point. Let everyone – borrowers and lenders alike – eat their own losses and move on. Let the people & companies that didn’t lose their minds profit off their prudence.

1. What’s your take on the housing crisis? What caused it?
Deregulation, and the greed of the financial companies. There used to be a time where companies served made money by serving the interest of their customers. Now, their #1 priority is simply making money (often to please shareholders). They knew they were making crappy loans, and they waved a financial magic want to resell them as high quality investments. While I agree with the personal responsibility aspect of individuals, where was the responsibility of these big financial corporations who did this to America?

3. Is now a good time to buy a house?

A tip of financial advice for you: never try to catch a falling knife. Buying a house right now is speculating and calling a bottom to a falling market. Great time to sell your house and upgrade to something bigger? Do you also want to blame people who follow your advice and get burned?

4. You work with lots of people who are having problems with debt. Are any of them having problems due to the housing crisis? “Overspending is the culprit.”

You appear to be mixing together the cause and the effect to some degree. People are in debt because… they are spending too much! Okay, let’s get to the actual cause. Why are people spending too much?

5. What’s your opinion of the various bailout programs being thrown around? Is a bailout necessary? “I am not willing to have my tax dollars bail out people who made an error in judgement.”

But you just got through promoting some proposed legislation to rescue the banks by giving a $7k tax credit to people who buy foreclosed homes. Sounds like someone is all for individual personal responsibility, and not helping out people, but is more than willing to open up the wallets to protect businesses that acted without such responsibility.

6. Finally, where does personal responsibility fall into the equation?

More important, where does corporate responsibility fall into the equation?

Don’t listen to this crock of recycled WASP neocon smoke and mirrors. Default and get out while you can. Take as many of your baubles bought during the good times as you can. Throwing good money after bad is bullshit.

Skip the 1st six minutes of this video and be prepared to be amazed by facts. A Harvard law professor shows lots of surprising numbers comparing today’s double-income family with 2 kids vs 1970’s single-income family with 2 kids.

http://economistsview.typepad.com/economistsview/2008/04/the-coming-coll.html

I wouldn’t have guessed today’s family spends 35% less on clothing compared with 1970 (adjusted for inflation) and etc. Watch the video if you want to know where the money actually goes.

“This is what unchecked capitalism, whose primary modus operandi is selfish greed, does. It creates, purposefully, irrational desire for more and more stuff.”

I disagree. It’s people’s lack of self-control that creates these problems, not unchecked capitalism.

Besides, where do we draw the line? What about the 400 lb guy who goes to McDonalds every day of his life and then develops diabetes or cancer? Is it McDonald’s fault for feeding him every day? Should they have turned him away?

I know my example is a litte extreme but it does illustrate the point that PEOPLE NEED TO START THINKING for themselves and make decisions accordingly.

I know all about marketing and the things companies will try to do to get people to spend their money. I use those examples to teach my kids that NOBODY is going to look out for them but themselves!