What is going on? Food Shortages / Recession Talk / High Oil Prices(Gas)/Home Prices?

[canuckcarguy]

Originally posted by Antonito


Forget the advertisments, if we're going to make legislation for help, legislate proper economic education in highschool. Even when people get told Y and Z, they don't care because they don't have financial foresight

I couldn't agree more.

In a rental property I owned a few years ago, I had a very nice tenant. He was in his 4th year of Engineering, was born and raised in Canada. He had a retail job to pay the bills, and was just moving out of his parents' house.

When I asked him for post-dated cheques for his rent, he had to go to his bank and order cheques, since he'd never had any. And then I had to show him how to fill them out.

Now he has a big job, a big car, a big house, and (presumably) big debt. I doubt he has any idea how any of it works.

[Xtrema]

Originally posted by benyl


That hasn't changed for decades. I remember in the 80s, my parents used the "Do not pay" financing to buy a TV.

I love all the great financing promotions like do not pay.

But I always make sure I can pay it out right NOW before I take those promotions.

[Antonito]

Originally posted by canuckcarguy

But on the house front, our lenders are acting like American lenders were acting 10 years ago. We tend to follow their trends. They had payday lending 5 years before we did. Our pawn shop industry is where theirs was some years ago. And the "sub-prime" lending industry here is less-developed, but growing fast.

Luckily for us, the US's problems are going to save us from following them down that road

[Eleanor]

Originally posted by benyl
The best part is that Bush lowered taxes... Where does all the money come from? They just print and lend more making the situation worse.

I think that as a prerequisite to becoming the president, you should be required to take an economics, finance and accounting course. LOL

Bush can't lower taxes, that power doesn't rest with the executive, it was congress that made all those decisions....

I know the president has a hand in it coming around, but the idiots in congress still let it all pass.

[canuckcarguy]

Originally posted by Antonito


Luckily for us, the US's problems are going to save us from following them down that road

I'd like to agree with you. And that might be the case.

But have you noticed any decrease in those flyers that come in the door, with the "your house is your credit" philosophy? These guys are still lending money as fast as the borrowers will take it...

I've loaned money for years, including against houses, and I'm at my most cautious right now. But there are plenty of lenders and investors out there burning through money.

[sexualbanana]

Funny that this topic came up. I just read this article and I agree with everything said 100%.

Why Gen Y is Broke

[Dren]

Such a Changing world...seemed to happen soo Fast !

[TomcoPDR]

Originally posted by benyl


Two out of 3 of my cars are paid for. One is a lease as it is a deduction for one of my businesses. My mortgage payment is 15% of my monthly income. I bought my house 1.5 years ago and I have 15 years left on my mortgage. I am getting married in 3 weeks and she makes more money than I do. So our mortgage payment will drop to 5% of our combined income. I don't think that is anywhere near living beyond my means. I am not bragging, but you asked.

Nobody tells you to go and borrow money. It is a choice you make. Sure there is peer pressure to live the "bling" lifestyle.

Interesting article about the US spending habbits:
http://www.cbc.ca/news/reportsfromab.../20080325.html

Originally posted by canuckcarguy


I'm a big believer in personal accountability, and I frankly don't have a bunch of sympathy for people who over-reached and made unrealistic financial decisions, and are now paying the price. But certain percentages of both Americans and Canadians will borrow as much as you'll lend them.

^^^ really good points and comments both of you.

I remember in the mid-80's as a kid, everyone made fun of my dad taking up some "expensive" assumable mortgage houses, in his late 30's ended up working at McDonald's for extra income to pay for them too (rent income does not completely cover expenses), buying no-name food, I didn't get no #23 Air Jordan's but $15 K-Mart shoes.

Guess we're ok now because of my dad's cheap spending teachings, but I'd still like to be able to splurge on $95 lunches once in a while.

[HuMz]

Originally posted by canuckcarguy




But on the house front, our lenders are acting like American lenders were acting 10 years ago. We tend to follow their trends. They had payday lending 5 years before we did. Our pawn shop industry is where theirs was some years ago. And the "sub-prime" lending industry here is less-developed, but growing fast.

The thing is though the sub-prime mortages aren't growing fast here in Canada at all. Thats what makes our lenders that much different and leaves alot more optimism in our real estate market here in Alberta. In 06 the states had 26% of new mortages to sub-prime borrowers compared to only 3% in Canada.

[eblend]

Originally posted by benyl


Two out of 3 of my cars are paid for. One is a lease as it is a deduction for one of my businesses. My mortgage payment is 15% of my monthly income. I bought my house 1.5 years ago and I have 15 years left on my mortgage. I am getting married in 3 weeks and she makes more money than I do. So our mortgage payment will drop to 5% of our combined income. I don't think that is anywhere near living beyond my means. I am not bragging, but you asked.

Nobody tells you to go and borrow money. It is a choice you make. Sure there is peer pressure to live the "bling" lifestyle.

Interesting article about the US spending habbits:
http://www.cbc.ca/news/reportsfromab.../20080325.html

If your paying that low for your house payments....why are you feeding the banks?! Jack up your monthly payments to be like 50% of your income and be finished with your morgage in a few years, otherwise you are just throwing interest at them.

I wish I was in a position where I could buy a house in this city, but obviously I know the market is on the downturn so I am not taking the plunge anytime soon. I rather pay 1100 in renting then something stupid like 3000 a month for the next 30 years. I will wait it out for now. When me and my girlfriend get married (aug 24th of this year) and she gets her nursing job (already certified with experience, but in Japan) then our household income will be high enough to warrant a house purchase, even in this market.

And the thing about credit cards. I don't know why people are so stupid when they use it. I use my credit card simply for convenience of having everything on one bill. I don't bother using debit or cash ever (unless I absolutely have to) because then you are spending your own money a month and a half early, so why not get interest on that money for that time, and let the credit companies take the hit. I pay off my CC in full every single time, and its super convenient for me as I can see all my purchases on a single bill. I think the reason for my success with credit cards is because I have the money ahead of time for stuff I purchase, whereas many people purchase first and hope they can pay off later, and as often the case, they can't and end up in the continious loop.

[rc2002]

Originally posted by HuMz


The thing is though the sub-prime mortages aren't growing fast here in Canada at all. Thats what makes our lenders that much different and leaves alot more optimism in our real estate market here in Alberta. In 06 the states had 26% of new mortages to sub-prime borrowers compared to only 3% in Canada.

'

Subprime or not, in a highly speculative market where people put little to nothing down and count on rising home prices to make a quick buck, when the market turns there will be defaults even for prime borrowers. Alberta is shielded right now, but if unemployment rises and defaults occur, fire sales could snowball this into a huge issue.

[rc2002]

Originally posted by eblend

And the thing about credit cards. I don't know why people are so stupid when they use it. I use my credit card simply for convenience of having everything on one bill. I don't bother using debit or cash ever (unless I absolutely have to) because then you are spending your own money a month and a half early, so why not get interest on that money for that time, and let the credit companies take the hit. I pay off my CC in full every single time, and its super convenient for me as I can see all my purchases on a single bill. I think the reason for my success with credit cards is because I have the money ahead of time for stuff I purchase, whereas many people purchase first and hope they can pay off later, and as often the case, they can't and end up in the continious loop.

That's exactly what I do as well. The credit card company is giving you a free loan every month and a half, take it and do something with it.

[in*10*se]

Originally posted by benyl
Just because you are making payments on something, doesn't mean you own it.

so true of all bmw drivers....



(had to say it)

[Legless_Marine2]

Originally posted by canuckcarguy


I couldn't agree more.

In a rental property I owned a few years ago, I had a very nice tenant. He was in his 4th year of Engineering, was born and raised in Canada. He had a retail job to pay the bills, and was just moving out of his parents' house.

When I asked him for post-dated cheques for his rent, he had to go to his bank and order cheques, since he'd never had any. And then I had to show him how to fill them out.

Now he has a big job, a big car, a big house, and (presumably) big debt. I doubt he has any idea how any of it works.

That's hilarious - Sounds exactly like me. I was likewise reluctant to get on the "financial grid". I've done so slowly, and responsibly - I now have a mortgage, and a few credit cards.

I'm still a bit out of my depth in regards to comfort with financial matters, but nonetheless live responsibly, and within my means.

[Legless_Marine2]

Originally posted by Dren
Whats happening ?
Will this affect Alberta much? Heard stories that Ontario is already in recession?

Views? ideas....

The news really does seem more pessimistic than usual. It's gotten a few people around me quite riled.

[A790]

The US economy as completely fucked my industry up. Advertisers that were paying well have cut back on their spending, which in turn means less revenue coming through the advertising channels, which means I get a small cut of it.

But, I have no debt, so I'm pretty carefree about it. I use my credit card for all purchases, big or small, since I get 1% cashback on it (have collected over $1,200 since January), and it gets paid off every month.

Using debt as a means to leverage your income isn't a bad thing so long as you keep your wits about you and save some money. I mean, why finance that $1,600 TV when it's realistically another month or two of saving? I'd rather wait, buy the TV outright, and NOT have to pay 28.8% interest.

[Canmorite]

Originally posted by A790

I mean, why finance that $1,600 TV when it's realistically another month or two of saving? I'd rather wait, buy the TV outright, and NOT have to pay 28.8% interest.

And in that time, it will have come down in price by $100