Warning of Global Financial Crisis

It seems that I'm not the only voice warning about the coming financial crisis (pointed out by various commenter at CR):

1. BIS renews slump fears as global economy pays the price. June 30, 2008
   

   A year ago, the Bank for International Settlements startled the financial world by warning that we might soon face challenges last seen during the onset of the Great Depression. This has proved frighteningly accurate.

2. Fortis warns of American meltdown. June 29, 2008
   
3. Barclays warns of a financial storm as Federal Reserve's credibility crumbles. June 28, 2008
   
4. RBS Sounds Alarm On Markets. June 18, 2008
   

And there are opinions on the response, like "What we can do in this dangerous moment" by Lawrence Summers and CR's commentary to Summers' options.

If you ask me, it's better to let things fall and then pick up the pieces rather than "try to do something" and end up prolonging the pain and the aftereffects.

Copyright 2008, DannyHSDad, All Rights Reserved.

Foreclosures coming to your neighborhood

If you think you are (and will be) immune from the coming foreclosure tsunami, you need to check out realtytrac. The (P)re-foreclosures and (A)uctions on the map will point the way to future REO (B)ank-owned properties -- and will force your neighborhood prices to be lowered all around.

Here in Orange County, CA, we have seen homes owned by bank (REO) be listed for 40+% off. For example, one home we saw was bought for $600K last year (Feb 2007) and the bank repossessed the home and put it on the market for $325K last month (May 2008) and it went pending in matter of days.

And just yesterday I saw home (surrounded by "P"'s and "A"'s and "B"'s) for sale with the following notes:

Looking for a Steal? Well, STOP LOOKING!! YOU FOUND IT! This is NOT A FORECLOSURE & NOT A SHORT SALE! MOTIVATED SELLERS Want this Home Sold TODAY!!! [details deleted] Did YOU SEE THE PRICE?? It's NOT A MISPRINT and YOU Are Not Dreaming. LOWEST PRICED Regular Sale Property Around! Bring your checkbook! HURRY!!!

So, all those foreclosed homes will lower the comps and hurt normal sellers. These days, all the normal sellers stand out since their asking price is something like $100K or $200K higher than short sale or REO prices. In fact, just few blocks away from this above home was another normal home for sale with about the same spec except the list price was $200K higher!!!

And to think that we've just reached the end of the beginning of this downturn: we'll be getting bank failures, company failures, personal bankruptcies, unemployment and/or lower hours/paycheck, higher taxes, lower pension payments, and more foreclosures/REOs. I personally believe that this downturn will be long and painful: Great Depression II or GDII.

Copyright 2008, DannyHSDad, All Rights Reserved.

Free Credit Scores for 6 to 12 months

According to Today's Show, "FREE CREDIT SCORES FOR ALL CONSUMERS? ALMOST..."

More details will be revealed on June 16 at www.listclassaction.com.

So don't sign up for your 30 day free scores when you can get one for months. The only caveat is that it isn't the commonly used FICO score. But it'll give you a relative strength of your credit score.

Copyright 2008, DannyHSDad, All Rights Reserved.