Lately, all that I have seen in the news is the increasing unemployment rate, the downward spiral of the stock market and the increasing foreclosure rates. To add to that, we have all of those in the financial and economic world proclaim that we are not in a depression rather a recession. Now these well educated and experienced professionals tout all kinds of evidence that support that statement. Obviously I do not agree with them but rather than trying to argue that point, I thought my time would be better served by investigating and stating the facts as they are.
First why don’t we get a clear understanding of the definition of recession? By most economist standards, the definition of recession is a decline in the Gross Domestic Product for two or more consecutive quarters.
That leads to the question, what is an accurate definition of Gross Domestic Product? Gross Domestic Product or GDP is the total value of all final goods and services produced in a particular economy; the dollar value of all goods and services produced within a country’s borders in a given year.
A depression by most economist definition is any economic downturn where real Gross Domestic Product declines by more than 10 percent.
Now that we have a clear (???) understanding of the terms recession, depression and GDP, let’s examine the facts as they are occurring right before our very eyes. I do not know of a household in America that is not suffering in some shape, form or fashion regardless of how much income that household makes. If you were a guru on the stock market, you are hurting because the stock market is at its lowest point in over 25 years. If you were a 20 year employee at a national company like Circuit City, General Motors or a bank like Washington Mutual, Wachovia or Countrywide (take your pick) then you have probably suffered from cutbacks, layoffs or terminations. Finally, if you are dealing with the possibility of losing your home then it is probably due to one of the aforementioned situations so what is a hard working law abiding citizen to do? Where do you turn for a solution while attempting to maintain your dignity when economists are bickering over the issue of whether we are in a recession or a depression?
Now I am not a smart guy but here is the way I see it since I now understand the difference (since it is pretty obvious to me that there has been a 10 percent or more decline in GDP) between a recession, a depression and GDP that this does qualify as a recession. Add to that the fact that most Americans have been suffering for the past year or more which passes the “definition of depression “test for me. This brings me to the conclusion no matter how you look at it and no matter how you apply the definitions of the terms we are all suffering from tough times.
We have to get away from the book definitions and look at the real world suffering that is going on in households today which should force us to focus on real solutions and provide real help to all of us that have been affected!
So what does it matter if we are in a recession or depression when the answer does not solve the truly critical question which is…when will there be a solution?
Monday, March 9, 2009
Monday, November 17, 2008
" I Dare You"
As I sit here today preparing to write my weekly blog, I am struggling on what to write about given what I want to focus on or rather what is my motto. Then it hits me! Why not write about the very thing that is impacting most households today. With that being said, this week’s subject is about helping those individuals facing the possibility of foreclosure and what they can do right now and how that effort will cost them absolutely nothing (except time) but at the same time is priceless.
Every day we hear on the news about how some family has lost their home or are on the brink of losing their home. If you are not about to lose your home then you are suffering because others around you are losing theirs and bringing the neighborhoods value down.
I would like to tell all that read my blog to do the following. If you are fearing foreclosure then fear not. If you are not fearing foreclosure but are suffering from what is going on in the economy and need some relief then consider the following:
1. Pick up the phone and call your mortgage servicer!
2. If you are fearing foreclosure and want to stay in your home, tell your servicer what is going on and do your level best to seek a solution!
3. Document your conversation, who you spoke with, their position, the time you spoke with them and the date you spoke with them!
4. Ask who is their immediate boss and keep asking until you get to the decision maker!
5. Once you get o the decision maker, ask for a solution that is reasonable and one that you can comply with and be assertive…I think you will find out that the mortgage servicer wants to work with you if you give him something to work with but it starts with the first step of calling.
If you are merely a homeowner in need of relief, feel free to do the same, you have nothing to lose…besides, companies that have been in business for over 100 years and are going out of business so have no shame in asking for help! Just because you are suffering from harsh times does not mean that your pride and dignity also has to suffer. Don’t allow conventional thinking to destroy your financial future when others have employed unconventional concepts to make it through the tough times.
You have the right to maintain your dignity!
You have the right to take care of your family!
You have the right to stand up for yourself!
Finally, make the choice today to no longer be a victim. Make the choice that just because others have lost their home due to being uninformed that it does not and will not happen to you. I dare you to take charge and make the bold step of telling your mortgage servicer/lender that you want them to give you a forbearance, a rate reduction or a new 30 or 40 year term. I am certain that they will strongly consider granting you one of if not all of your request and in the end you all win!
So when you win, remember to give our FATHER the GLORY!
Every day we hear on the news about how some family has lost their home or are on the brink of losing their home. If you are not about to lose your home then you are suffering because others around you are losing theirs and bringing the neighborhoods value down.
I would like to tell all that read my blog to do the following. If you are fearing foreclosure then fear not. If you are not fearing foreclosure but are suffering from what is going on in the economy and need some relief then consider the following:
1. Pick up the phone and call your mortgage servicer!
2. If you are fearing foreclosure and want to stay in your home, tell your servicer what is going on and do your level best to seek a solution!
3. Document your conversation, who you spoke with, their position, the time you spoke with them and the date you spoke with them!
4. Ask who is their immediate boss and keep asking until you get to the decision maker!
5. Once you get o the decision maker, ask for a solution that is reasonable and one that you can comply with and be assertive…I think you will find out that the mortgage servicer wants to work with you if you give him something to work with but it starts with the first step of calling.
If you are merely a homeowner in need of relief, feel free to do the same, you have nothing to lose…besides, companies that have been in business for over 100 years and are going out of business so have no shame in asking for help! Just because you are suffering from harsh times does not mean that your pride and dignity also has to suffer. Don’t allow conventional thinking to destroy your financial future when others have employed unconventional concepts to make it through the tough times.
You have the right to maintain your dignity!
You have the right to take care of your family!
You have the right to stand up for yourself!
Finally, make the choice today to no longer be a victim. Make the choice that just because others have lost their home due to being uninformed that it does not and will not happen to you. I dare you to take charge and make the bold step of telling your mortgage servicer/lender that you want them to give you a forbearance, a rate reduction or a new 30 or 40 year term. I am certain that they will strongly consider granting you one of if not all of your request and in the end you all win!
So when you win, remember to give our FATHER the GLORY!
Monday, November 10, 2008
Common cents and the day after
Today as I sit in my office I am both overjoyed and still in a daze concerning the historical election. Overjoyed because of the overwhelming voter response for the primary election and dazed by the actuality that the majority of eligible voters put aside their differences and voted for the next President based on what I believe to be common sense (there’s that word again), sound judgment, substance and the overall character of the individual. The nation decided to move forward versus looking back. I have always been proud of the United States but I have never been prouder than I am right now. What this election represents is a paradigm shift in the way we as a nation think. It represents that the majority of us are starting to realize that we are all the same once you get past the pigment or lack of pigment in our skin. It is also moving to realize as I am sure many others have thought that they are actually alive to see an African American as President and that he was elected because mainstream America is in agreement with all other ethnic minorities and put him in office. We should all pause and make it a point to realize the consequences of our actions and be extremely proud of the statement we made to the world.
That being said….what do we do the day, week and year after we have elected the first African American as President of the United States and what do we demand of him, after all he is the “Commander in Chief?
Here are my suggestions for President Barack Obama:
1. Get to work immediately on putting together a better health care plan. One that makes sense for all citizens regardless of economic status and one that is truly affordable. Make sure that insurance companies provide services and are not just in business of generating huge profits. I say this because right now most insurance companies are in the business of identifying and avoiding providing coverage to those who are in the most need of health care as a business model.
2. Get to work on mandating the big oil companies to do more with the profits they make like subsidizing alternative energy, creating cleaner fuel products and community development. Why can’t they make a bigger contribution to society since they are presently making record billion dollar profits!
3. Solve the mortgage crises. When people lose there homes, they are most often losing there biggest and sometimes their only real long term investment. In other words, when people lose their homes they are also losing their hope (faith) that they can do better in today’s society. All dreams start with hope so please allow those who have homes an opportunity to maintain their dignity and find a way for those that are willing to be homeowners to remain homeowners!
Finally, look at the resources available for those that have been affected by unemployment. There are a lot of good men and women that have been affected by job loss. If you look at items 1, 2 & 3 you will see that all these issues are contributing to the overall platform that you ran on and pledged to fix.
President Elect Obama, I believe you are the most talented, intelligent, articulate and eloquent world leader that I have ever seen (and you have not even been inaugurated yet). I also believe that you will deliver on your platform promises of restoring hope and dignity to the people of this nation. I know it will not be easy but I am sure you knew that as now you will have at least four years of the CHRISTOPHER COLUMBUS experience….you will discover AMERICA!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
That being said….what do we do the day, week and year after we have elected the first African American as President of the United States and what do we demand of him, after all he is the “Commander in Chief?
Here are my suggestions for President Barack Obama:
1. Get to work immediately on putting together a better health care plan. One that makes sense for all citizens regardless of economic status and one that is truly affordable. Make sure that insurance companies provide services and are not just in business of generating huge profits. I say this because right now most insurance companies are in the business of identifying and avoiding providing coverage to those who are in the most need of health care as a business model.
2. Get to work on mandating the big oil companies to do more with the profits they make like subsidizing alternative energy, creating cleaner fuel products and community development. Why can’t they make a bigger contribution to society since they are presently making record billion dollar profits!
3. Solve the mortgage crises. When people lose there homes, they are most often losing there biggest and sometimes their only real long term investment. In other words, when people lose their homes they are also losing their hope (faith) that they can do better in today’s society. All dreams start with hope so please allow those who have homes an opportunity to maintain their dignity and find a way for those that are willing to be homeowners to remain homeowners!
Finally, look at the resources available for those that have been affected by unemployment. There are a lot of good men and women that have been affected by job loss. If you look at items 1, 2 & 3 you will see that all these issues are contributing to the overall platform that you ran on and pledged to fix.
President Elect Obama, I believe you are the most talented, intelligent, articulate and eloquent world leader that I have ever seen (and you have not even been inaugurated yet). I also believe that you will deliver on your platform promises of restoring hope and dignity to the people of this nation. I know it will not be easy but I am sure you knew that as now you will have at least four years of the CHRISTOPHER COLUMBUS experience….you will discover AMERICA!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
Monday, November 3, 2008
Common (cents) Sense and the Presidential Election
As I sit in my office today, I am contemplating what to write about and have a serious discussion on. Then it hits me like a ton of bricks…write about the election and how it will impact the economy. Write about how both candidates promise to change the status quo when it comes to health care, tax cuts and creating jobs. Lastly, write about how which candidate makes the most common sense concerning these topics and which candidate is considered out of touch. So here goes! The good, the bad and the ugly. After all has been said and done by the end of this week’s blog, I am sure that I will offend many and at the same time have many that will agree with me. In any event, if I say something that offends you, feel free to let me know via commenting on my blog.
The Good
Both the Democratic and Republican Presidential candidates promise to make health care more affordable, cut taxes for the majority and create jobs but they differ on how they are going to go about implementing these promises. Both candidates promise that there will be a new day in our nation’s capitol. A day where “pork barrel” spending will be no more and where lobbyist will not influence the politics of the day. One is inspirational and eloquent and full of charisma. The other is and has been considered a “maverick” for the way he breaks from his party on certain issues. Both of them think that they are the best choice for President and both know that there will only be one at the end of the ELECTION DAY. Both will be better than “the one” we currently have as President but again there can only be one. So who will it be? Let me apply the common (cent) sense I have learned in my 42 years and then challenge you the reader to comment with your opinions.
The Bad
The industry definition of recession is, “a period of economic contraction” contraction being the operative word. The common (cents) sense definition of recession is when more and more of the population have to do more with less and it becomes a cycle and spreads. Regardless of the definition we are in a recession from where I sit. We are all victims of a declining economy and we have not seen the bottom so hold on for the ride.
The Ugly
We are in the worst housing market I have seen in my lifetime. Thousands have lost or will lose their homes because of poor mortgage product choices, investor purchases, predatory lending and/or being uneducated about the buying process. The sad thing about this housing crisis is that we spent over 700 billion to bail out Wall Street and neglected to address the homeowner.
Common Cents Solution
From where I sit, the solution is simple and here goes:
1. Vote for BARACK OBAMA (I hope the country agrees with me)!
2. Have the new President partner with John McCain on the important platform issues to solve the economic and foreign policy crises!
3. Force the Banks, Fannie Mae, Freddie Mac and private investors who are the servicers of most mortgages to rewrite and modify (not refinance)the mortgages on all “upside down" mortgages!
4. Allow the servicers to write off the loss at no penalty to the bottom line (make it a tax shelter or something)!
5. Do the right thing when it comes to healthcare by making it reasonable and affordable for all who need it!
These are my thoughts and I welcome your comments so let me have it!!!!!!!!!!!!!!!!!!!!!!!
The Good
Both the Democratic and Republican Presidential candidates promise to make health care more affordable, cut taxes for the majority and create jobs but they differ on how they are going to go about implementing these promises. Both candidates promise that there will be a new day in our nation’s capitol. A day where “pork barrel” spending will be no more and where lobbyist will not influence the politics of the day. One is inspirational and eloquent and full of charisma. The other is and has been considered a “maverick” for the way he breaks from his party on certain issues. Both of them think that they are the best choice for President and both know that there will only be one at the end of the ELECTION DAY. Both will be better than “the one” we currently have as President but again there can only be one. So who will it be? Let me apply the common (cent) sense I have learned in my 42 years and then challenge you the reader to comment with your opinions.
The Bad
The industry definition of recession is, “a period of economic contraction” contraction being the operative word. The common (cents) sense definition of recession is when more and more of the population have to do more with less and it becomes a cycle and spreads. Regardless of the definition we are in a recession from where I sit. We are all victims of a declining economy and we have not seen the bottom so hold on for the ride.
The Ugly
We are in the worst housing market I have seen in my lifetime. Thousands have lost or will lose their homes because of poor mortgage product choices, investor purchases, predatory lending and/or being uneducated about the buying process. The sad thing about this housing crisis is that we spent over 700 billion to bail out Wall Street and neglected to address the homeowner.
Common Cents Solution
From where I sit, the solution is simple and here goes:
1. Vote for BARACK OBAMA (I hope the country agrees with me)!
2. Have the new President partner with John McCain on the important platform issues to solve the economic and foreign policy crises!
3. Force the Banks, Fannie Mae, Freddie Mac and private investors who are the servicers of most mortgages to rewrite and modify (not refinance)the mortgages on all “upside down" mortgages!
4. Allow the servicers to write off the loss at no penalty to the bottom line (make it a tax shelter or something)!
5. Do the right thing when it comes to healthcare by making it reasonable and affordable for all who need it!
These are my thoughts and I welcome your comments so let me have it!!!!!!!!!!!!!!!!!!!!!!!
Monday, October 27, 2008
Common (cents) Sense and the brink of a recession
Greetings all,
If you watch the news, listen to radio or surf the internet you have inevitably heard or read about one of two things…the upcoming Presidential election or the economy. Both of these subjects are historical in nature and even though I am throwing my financial support and efforts behind the Obama/Biden ticket, I am not writing this blog about politics and the change I want to occur on November 4th! This particular blog is about the pending recession (depends on who you are asking?) and what common cents is forcing me to do in order to take care of my family. I speak from the stand point of “head of the house” and I am certain that what we are encountering in my house is being felt in households all over the nation.
Tightening the Budget
One of the things I tell my wife all of the time is that money does actually grow on trees (since money is made from paper and paper comes from trees) but we do not have one of those type trees growing in our back yard. I say this to her all of the time when we are addressing budget issues in the household which is almost daily now. At the beginning of each month and week, I show my wife how much money we have in the budget to handle our affairs and we discuss where we can cut back. Ultimately it comes down to a discussion of “wants and needs”. Basically, my position is, “if it is a want then we don’t need it”. It is my wife’s position to try and get me to be more flexible when assessing wants and needs. Now we have been married for 8 and a half years and she knows that most decisions for me are based on rational thought not emotional ones. This being the case, all non essential spending has been cut out. This means no going out to dinner or movies for the time being and I have cut out my daily mountain dew soda which cost $1.49 with tax. The mountain dew example is the point I make to my wife in showing her how this small sacrifice makes a big difference in our budget which becomes an approximate $45.00 savings per month and a $540.00 savings per year. I then go to our separate checking accounts where I deposit our allowances (we have a separate account for our bills and yet another for our savings etc.) where we discuss/argue on where we can cut back more. At the end of the discussion/argument, we agree on finding additional ways to save money by changing our spending habits. I pointed out to her that she could save money by getting cash back when making a purchase at the grocery store versus going to a non-affiliated ATM to get money because of the ATM fees associated with each transaction which averages @ $4.00 per transaction. In the past, she would frequent an ATM 2-3 times per week thus paying as much as $12.00 per week and @ $48.00 per month in unnecessary fees. She saw my point and now looks for other ways to save. This month we found a way to save an additional $300.00 in our budget which goes a long way in this pending recession! I share this testimony with you and challenge you to do the following by asking you….
Do you think we are in a recession?
Do you have a realistic budget?
Where can you find $100.00 or more in monthly savings?
Now that you have answered those 3 questions what are you going to do next?
If you watch the news, listen to radio or surf the internet you have inevitably heard or read about one of two things…the upcoming Presidential election or the economy. Both of these subjects are historical in nature and even though I am throwing my financial support and efforts behind the Obama/Biden ticket, I am not writing this blog about politics and the change I want to occur on November 4th! This particular blog is about the pending recession (depends on who you are asking?) and what common cents is forcing me to do in order to take care of my family. I speak from the stand point of “head of the house” and I am certain that what we are encountering in my house is being felt in households all over the nation.
Tightening the Budget
One of the things I tell my wife all of the time is that money does actually grow on trees (since money is made from paper and paper comes from trees) but we do not have one of those type trees growing in our back yard. I say this to her all of the time when we are addressing budget issues in the household which is almost daily now. At the beginning of each month and week, I show my wife how much money we have in the budget to handle our affairs and we discuss where we can cut back. Ultimately it comes down to a discussion of “wants and needs”. Basically, my position is, “if it is a want then we don’t need it”. It is my wife’s position to try and get me to be more flexible when assessing wants and needs. Now we have been married for 8 and a half years and she knows that most decisions for me are based on rational thought not emotional ones. This being the case, all non essential spending has been cut out. This means no going out to dinner or movies for the time being and I have cut out my daily mountain dew soda which cost $1.49 with tax. The mountain dew example is the point I make to my wife in showing her how this small sacrifice makes a big difference in our budget which becomes an approximate $45.00 savings per month and a $540.00 savings per year. I then go to our separate checking accounts where I deposit our allowances (we have a separate account for our bills and yet another for our savings etc.) where we discuss/argue on where we can cut back more. At the end of the discussion/argument, we agree on finding additional ways to save money by changing our spending habits. I pointed out to her that she could save money by getting cash back when making a purchase at the grocery store versus going to a non-affiliated ATM to get money because of the ATM fees associated with each transaction which averages @ $4.00 per transaction. In the past, she would frequent an ATM 2-3 times per week thus paying as much as $12.00 per week and @ $48.00 per month in unnecessary fees. She saw my point and now looks for other ways to save. This month we found a way to save an additional $300.00 in our budget which goes a long way in this pending recession! I share this testimony with you and challenge you to do the following by asking you….
Do you think we are in a recession?
Do you have a realistic budget?
Where can you find $100.00 or more in monthly savings?
Now that you have answered those 3 questions what are you going to do next?
Saturday, October 18, 2008
Common Sense and Critical Thinking
Greetings all,
Common sense by definition is practicing sound practical judgement that is independent of specialized knowledge or training...to exercise normal human intelligence. Critical thinking by definition is the process of actively and skillfully conceptualizing, applying, analyzing and evaluating information to reach an answer or conclusion. How do the two of these actions go together as we deal with our financial decisions? Let me be more specific, some people when faced with a financial bind turn to pay day loans, overdraft accounts, and credit cards as the solution to get out of that financial bind. What I would like to understand is why does an individual turn to the afore-mentioned as the answer to the problem? Are they wrong in making such a choice? Am I wrong for asking the question? Why are check cashing and pay day loan companies only in certain neighborhoods? Are they the enemy? Let me make my case concerning these options using common sense and critical thinking!
Common sense tells me that the last place that I would want to go to get out of a financial bind is to a pay day loan, check cashing or a credit card because of the interest rates these companies charge for borrowing there money. In addition, the relief you get from taking out the loan is only temporary thus the only thing that you have accomplished in most cases is delaying the inevitable. Once you have traveled down the path of borrowing money in this manner, it is hard to go back...in some peoples case they can never go back. Thus, they suffer the consequences by having a judgement filed against them, their credit being negatively impacted and ultimately your decisions concerning your finances are dictated to you versus you being in control and making an informed decision.
Critical thinking tells me that if I were to take a moment to analyze my situation maybe just maybe there is a better solution. Maybe I could call my creditor an tell them that I am in a financial bind and I would like to offer a solution that I am sure that they the creditor would accept as long as the solution is reasonable. Now lets compare the benefits of common sense and engage our critical thinking.
Benefit #1
By calling the creditor to offer a solution, you are showing the creditor that you are a responsible account worthy of doing business!
Benefit # 2
Calling the creditor with a solution is often cheaper than going to the pay day loan company!
Benefit 3
The permanent relief you will gain by attacking the problem responsibly far out weighs the temporary relief and subsequent charges you will pay from going for the quick fix!
Finally I would like to ask you the reader this, is the pay day loan company the problem or is the way we have been conditioned by society and the economy the problem? Who is the real enemy? What does common sense tell you in this situation? What does your critical thinking tell you?
Common sense by definition is practicing sound practical judgement that is independent of specialized knowledge or training...to exercise normal human intelligence. Critical thinking by definition is the process of actively and skillfully conceptualizing, applying, analyzing and evaluating information to reach an answer or conclusion. How do the two of these actions go together as we deal with our financial decisions? Let me be more specific, some people when faced with a financial bind turn to pay day loans, overdraft accounts, and credit cards as the solution to get out of that financial bind. What I would like to understand is why does an individual turn to the afore-mentioned as the answer to the problem? Are they wrong in making such a choice? Am I wrong for asking the question? Why are check cashing and pay day loan companies only in certain neighborhoods? Are they the enemy? Let me make my case concerning these options using common sense and critical thinking!
Common sense tells me that the last place that I would want to go to get out of a financial bind is to a pay day loan, check cashing or a credit card because of the interest rates these companies charge for borrowing there money. In addition, the relief you get from taking out the loan is only temporary thus the only thing that you have accomplished in most cases is delaying the inevitable. Once you have traveled down the path of borrowing money in this manner, it is hard to go back...in some peoples case they can never go back. Thus, they suffer the consequences by having a judgement filed against them, their credit being negatively impacted and ultimately your decisions concerning your finances are dictated to you versus you being in control and making an informed decision.
Critical thinking tells me that if I were to take a moment to analyze my situation maybe just maybe there is a better solution. Maybe I could call my creditor an tell them that I am in a financial bind and I would like to offer a solution that I am sure that they the creditor would accept as long as the solution is reasonable. Now lets compare the benefits of common sense and engage our critical thinking.
Benefit #1
By calling the creditor to offer a solution, you are showing the creditor that you are a responsible account worthy of doing business!
Benefit # 2
Calling the creditor with a solution is often cheaper than going to the pay day loan company!
Benefit 3
The permanent relief you will gain by attacking the problem responsibly far out weighs the temporary relief and subsequent charges you will pay from going for the quick fix!
Finally I would like to ask you the reader this, is the pay day loan company the problem or is the way we have been conditioned by society and the economy the problem? Who is the real enemy? What does common sense tell you in this situation? What does your critical thinking tell you?
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