Posts Tagged ‘personal finance’

Mark Cuban writes of the coming implosion of the education bubble. He parallels it (accurately, IMHO) to the housing market. What’s the takeaway? Be very careful about where you go to school and how much you are paying for it.

 

There are several excellent points in this article. First, debts that cannot be repaid won’t be. A person underwater by tens or hundreds of thousands of dollars is eventually going to default (the majority of them anyway). There are exceptions, bust most will not stand by and pay a premium for years on end while their neighbors pay a fraction of the cost for the same housing. Further, as the banks are bailed out again and again and no relief is given to the homeowner, default becomes palatable.

Second, the government has sacrificed our economy to the banks profit. The bailouts and continued programs purported to “help homeowners” – themselves just thinly veiled bailout vehicles for the banks – can be characterized in no other way.

Finally, the government as a sovereign entity holds absolute power over the corporation. That they have not forced resolution only backs up the second point; the economy takes a back seat to corporate profit and political power.

This will not end well. Instead, it will end in the destruction of millions of financial futures.

Millions of lives have been financially ruined (through some fault of their own, to be sure…but there are contributing macro factors). Millions more will be ruined as they struggle to hold on and continue to pay their mortgages in the hope the banks and politicians will act to stem the tide, rather than profit from it.

Read the whole thing.

 

The question I have after reading this article is, “Do we as a society want to live in an environment where charging 350% APR is even debatable as unethical?”

It is so wrong that things are so upside down, that we allow the poorest among us to be charged 350 percent…especially when the richest among us have access to vastly more sums at zero (or close) percent.

I don’t have an answer, just a deep sense of the wrongness of this dichotomy.

 

 Most states allow a lender to pursue a deficiency judgment for years after a foreclosure.  Further, acknowledging that debt to a collector during those years can “refresh” the statute of limitations on thr debt.  This is why a short sale or bankruptcy is the preferable route; it deals with the debt up front.  

Banks are not your friend.  They are not your ally.  They do not – as an institution – have your best interests at heart. 

 Damn criminals.  That’s all I have to say about that.

believe it, having tracked our spending on this very item for awhile.  A coffee maker (or espresso machine) would have paid for itself several times over by now.  It’s an easy trap to fall into, though…the upfront costs for a nice machine are much larger than the daily cost of a coffee. 

 As always, Mish has great words.  However, the comment thread is even better than Mish’s post…it gets deep fast.

 From Kelo to this most recent ruling, the judicial system seems hell bent on placing the corporation above the citizen.  By forcing arbitration, they have given big business – banks, specifically – yet another lever over the consumer.  

Get out of debt and stay that way.  Remove their control mechanism.  

I am aware that last sentence sounds like something a conspiracy theorist would say.  I am okay with that.