Comments on: Lessons From Hell

By: Michelle P

Michelle P — Sun, 19 Oct 2008 00:30:26 +0000

12. Have a contingency (Read EMERGENCY) fund because life happens! Note: Sudden unemployment is an emergency. Sadly, vacations, big screen TVs and the latest trend are not. Know the difference.

13. Teach your kids all of the above.

By: Laurel

Laurel — Sat, 18 Oct 2008 11:40:41 +0000

My grandson got one of these loans. I was flabbergasted. He got a $200,000 loan because of how he handled his saving account. He had no job, no savings..And yet he has done well. He made two apartments and has rented them out. He has built a painting service to a rehabilitation business. He has savings. I do not advocate this. The problem is that the people who were in the banks buying these packages were the heart of the problem. And it was ALL OVER THE WORLD.

By: Nathan

Nathan — Sat, 18 Oct 2008 04:52:11 +0000

“10. Your home is not a bank.”

I’d rephrase this as: Your home is not a money tree!

This country needs a big kick in the @ss!

By: Moneymonk

Moneymonk — Fri, 17 Oct 2008 17:53:08 +0000

LOL I love #1 and # 5

By: Simon C

Simon C — Fri, 17 Oct 2008 16:34:22 +0000

Almost all mortgage originators are paid on commission – it doee not matter if they are a broker or a banker. I have done both and was paid in exactly the same way. Please level your crticism at mortgage originators – dont unfairly single out brokers.

By: JT

JT — Fri, 17 Oct 2008 03:04:07 +0000

Number 12

Don’t believe the president when he tells you not to regulate or monitor business or financial institutions because it is better to let them be free to operate as they see fit. The only thing this has accomplished is to allow the top 1% in the country to accumulate an enormous amount of wealth at the expense of the remaining 99%.

By: William

William — Fri, 17 Oct 2008 02:34:42 +0000

JLP –

In re: “we did get the bailout and look at what the market is doing. You guys are smart!”

I think you’re missing the point.

The market is a psychological beast that gets things wrong in the short term, but nails valuations over the long run. The pressures facing ANY Treasury Secretary or Presidential administration are twofold: dealing with the underlying economic factors and the psychological well-being of the market.

For historical examples, I’d suggest reading Robert Rubin’s book, In An Uncertain World. He, and the Clinton administration, tackled similar problems with both the Mexican and Asian Economic Crises of the 90s. How did they decide how big to make those international bailouts? They were looking for a number large enough to take care of the underlying factors AND appear large enough to reinstate overall confidence.

Why $700 billion, and not $500 or $600? Look at Paulson’s testimony before Congress. He wanted a really big number to boost overall confidence!

The failure to pass it the first time basically nullified this effect – it was still a large package, and can potentially address the underlying factors (longer term), but it didn’t provide the shock value needed.

We’re facing a barrage of bad economic news, and that is what the market is reacting to. It’s pricing in the anticipated drop in corporate revenue and consumer spending for months to come.

By: Percy

Percy — Thu, 16 Oct 2008 23:45:51 +0000

JLP, how about saving a little every month.

Also unfortunately our government has not yet learned to live within its means. They are printing
and borrowing money like there is no tomorrow.

By: Tim

Tim — Thu, 16 Oct 2008 21:54:53 +0000

nice summation.

By: Jim

Jim — Thu, 16 Oct 2008 21:37:14 +0000

Fatigue is getting me too.

Another lesson I’ve seen too many times lately:

12. If you are retired or close to retirement then the bulk of your retirement savings should not be in the stock market.