[SPQR M3]

Here in Australia, all we read about is how bad the US economy is. I know the media always makes things out to be worse than they actually are, but I was wondering how bad things are from "the street"? I know I am asking on the wrong forum, since most people who own an M3 probably have money and a secure job, but I'm really interested in seeing things from a "normal" person's perspective.

In Australia, the economy is not too bad - yet. We have been protected by strong banks (none gone under yet), and our strong exposure to China, which is softening the blow.

[Blake]

it's pretty bad, all things considered. the dow jones hit a 12-year low today. it's weird to think the average was over 11000 just a year ago and we're looking at an average of low-6000 today. there are blocks of houses that are either for sale or foreclosed with no end in sight. it's not that there aren't buyers, it's just that if you don't have 20% or more to put down on a mortgage, there isn't a bank in the land that will even look at what you have to offer, unless you have near perfect credit and high LTV. it's pretty crazy...i hope this is a once in a lifetime event. whole states are near bankruptcy!

[number335]

It's pretty bad here. Our company had to do some layoffs for the first time in 70+ years of business and we have a freeze on wages. I once thought I had a secure job as long as I worked hard and didn't screw up...not anymore. Real estate values have plummeted and there are thousands of people out of work.

[Citizen Z]

Its doing better than what the news would lead you to believe. The dow being up or down doesn't really impact people on a daily basis other than to depress them because they just finished watching a TV show on how bad things are, not because their life actually sucks. Compared to other recessions, unemployment is surprisingly low. Negative news gets lots of play but I haven't heard many people talking about how their relatives or friends are laid off and had to move across country to live with their parents or siblings or crazy shit like happened in the Great Depression.

[Mega Man]

It's pretty bad where I work too...everyone stays overtime not because they want overtime pay, but because we need to show our usefulness and commitment to our company (lay off coming soon!).

[johnnymu]

Originally Posted by Citizen Z

Its doing better than what the news would lead you to believe. The dow being up or down doesn't really impact people on a daily basis other than to depress them because they just finished watching a TV show on how bad things are, not because their life actually sucks. Compared to other recessions, unemployment is surprisingly low. Negative news gets lots of play but I haven't heard many people talking about how their relatives or friends are laid off and had to move across country to live with their parents or siblings or crazy shit like happened in the Great Depression.

Maybe you haven't but I hear it everyday. Just a typical day driving through my community I can visibly notice a difference, less retail store operational, less cars at the mall, car dealership closed. I have to deal with more crimes now personally cause 2000 inmates were released early here. Yes, I noticed higher crimes in my business cause of this.

I have affiliation with major food distributors and we have these kind of discussions all the time. Coca-Cola, Pepsi have both cut jobs, Sysco distributor has lost 15% accounts due to closings of restaurants. My mailman fear of job security cause he's on the end of the totem pole. My post office also layed off 20%(employees that has been with the company three less than 3 years),My mail is constant late or sent to wrong locations. Other distributors I don't deal with anymore cause of bankruptcy.

Perhaps you just don't talk to the right people but everyday I hear a different story and I see it with my own eyes.

[Hawkeye]

Originally Posted by Blake

it's pretty bad, all things considered. the dow jones hit a 12-year low today. it's weird to think the average was over 11000 just a year ago and we're looking at an average of low-6000 today. there are blocks of houses that are either for sale or foreclosed with no end in sight. it's not that there aren't buyers, it's just that if you don't have 20% or more to put down on a mortgage, there isn't a bank in the land that will even look at what you have to offer, unless you have near perfect credit and high LTV. it's pretty crazy...i hope this is a once in a lifetime event. whole states are near bankruptcy!

Banks here will do 95% financing, I don't know what kind of banks you are looking at...?

BTW, don't you want a low LTV instead of a high one? (I am assuming you are talking about Loan To Value, as in the amount of the loan compared to the value of the asset you are borrowing againt?)

Around my area I would say it is not too bad (midwest). Not too many foreclosed homes, but then again I think people in the midwest are *generally* smarter about their finances and live within their means... or it could just be that everything is cheaper here. Of course there are always outliers to every rule (like me who pretty much spends as much as I make at this point in time)

[number335]

The dow being up or down impacts people's investments/savings and company capital. It's a spiral effect. People are losing money and are afraid to invest, which in turn prevents companies from investing/utilizing that capital they normally would have and end up downsizing. Downsizing means layoffs and less spending and more government intervention, which means more taxes. The dow isn't just some frivolous number.

[Blake]

Originally Posted by Hawkeye

BTW, don't you want a low LTV instead of a high one? (I am assuming you are talking about Loan To Value, as in the amount of the loan compared to the value of the asset you are borrowing againt?)

yes yes, sorry for confusion. i was writing fast.

[cougfan335]

I would say it is pretty bad. If you want to sell your house you have to take it in the shorts. I have friends who have accepted 3 offers and no one could get financing on a $200k condo. My Dad is 55, talking to him retirement options are looking ugly with the uncertainty in the stock market. He's lost 1/3 of one of his retirement accounts.

[Aija]

There is definately a noticable difference on how things were 4years ago as compared today.

-You see more discounts on clothes, shoes. Despite the discounts, people arent shopping as much as before (even when they were much more expensive)

-Everytime you turn on the news...this company is laying off X amount as the other company is laying off Y amount.

-Grade Schools are cutting back on programs like sports.

-Public colleges are cutting back on admitting students

-Used car values is trashed.

Just the other day i went to the valley. What used to be a brand new neighborhood with every house having people living in it is now empty. Literally, I went to see this one neighborhood, EVERY HOUSE was foreclosed in that block

[Rawhide]

Just hope we collapse like the Soviet Union in a fairly quiet way and not go super-critical.

[ideliver]

16% unemployment in my county and climbing....

[johnnymu]

The dealer where I got my bmw is closing
Some public schools are combining as one and taking in double the capacity amount needed.

[cougfan335]

Luckily things are going to turn around any day now. The gov't has yet to meet a hole we can spend our way out of.

[M_Six]

A lot depends on where you live. Out here in corn country the housing market never went ballistic, so there has been no major slump, although new construction is off a bit. Still, prices have remained fairly steady. Unemployment isn't too bad, but that's because two of the major employers are universities. There has been one plant shutdown in my town that cost some jobs and Caterpillar just north of here had a big layoff. Otherwise it hasn't been bad. Still some major construction going on at my university, so most people should be safe for a while. No idea how hard it is to get a home loan now, though. We've thought about an equity loan, but that may be something we wait a bit on.

The real killer is the beating our retirement accounts are taking. My wife has lost a ton. Her fund is bleeding money as fast as she contributes. The conventional wisdom is to ride out the rough times, but at some point you have to stop throwing good money after bad.

[jlaw]

Things are HORRIBLE.

[UncleWede]

My two younger brothers (38, 30) are probably moving in with the parents. Older one is filing chapter 7 to try and save a single investment house in Montana. Other was a DJ but they cut his live hours to less than 20/wk so they don't have to pay benefits. But while he's there, between songs, he has to record voice overs so his voice is on the air 40/wk.
My city cut some serious money, and started to charge people for services. We had to get City Council to pass a new rule about the home buyer assistance program because so many were defaulting and not telling the City. The City Manger did say about a week ago that as long as we don't get reprimanded, we have a job for at least 5 years, but none of his peers in the area could say the same. Sicne you aren't buying as many BMWs, there aren't as many coming thru the city, so we aren't making as much tax on the transport.

[mpimping]

http://www.ajc.com/metro/content/met...ousgeorge.html

[SPQR M3]

Hmm..sounds pretty bad overall.

In Australia we are not doing too bad in our housing, because we have different laws. If you buy a house here with a deposit (ie down) of 20% or less, you get hit with mortgage insurance which you have to wear, and it protects the banks from default. But the major difference between the US and Oz is that over here, if the bank forecloses on you, and the house is sold for less than what you owe, they will pursue you for the difference - from what I understand, in the US, you simply return the keys to the bank and it's then their problem - is this correct?

[darkcloud]

Originally Posted by SPQR M3

Hmm..sounds pretty bad overall.

In Australia we are not doing too bad in our housing, because we have different laws. If you buy a house here with a deposit (ie down) of 20% or less, you get hit with mortgage insurance which you have to wear, and it protects the banks from default. But the major difference between the US and Oz is that over here, if the bank forecloses on you, and the house is sold for less than what you owe, they will pursue you for the difference - from what I understand, in the US, you simply return the keys to the bank and it's then their problem - is this correct?

We have mortgage protection. It's called PMI here. The problem is they didn't require the way you do it up until rather recently. They used to only give PMI to high risk buyers unless they put 20% down. Now they give it to pretty much everyone unless you have 20% to put down.

My wife and I recently bought our first house. It was a family members that had to go to a nursing facility. Our bank gave us a loan of $275k, the main house we were looking at was $210k w/no PMI because of the neighborhood w/only 5% down. The family members house we ended up buying we payed >$100k(not because of the value of the home, she gave us a great deal because she wanted a quick sell and didn't need all the money) and they slapped us with PMI, confusing yes. I was also pissed because it made no sense, I also have a credit score of +770.


Forclosures here are all different. But yea, basically they just give the keys back and walk. They'll typically trash the house too, which is a shame. Then depending on the neighborhood if the house isn't secure people will break in to rip the copper pipes out and steal the aluminum siding to scrape it all. That's solely the ghetto though.

[Seminole]

Originally Posted by cars4lyfe

If and when this mess ever gets resolved, there should be a new law: you must put up at least 20% down payment to buy a house on, say, a house worth $600K and 40% down on a house worth 300K. This will prevent another bubble from ever re-occurring in the residential side of real estate.

You do realize that is that is the same amount of money down on each house in your senario... $120,000 each. Why wouldn't someone just go get the $600,000 instead.