tag:blogger.com,1999:blog-35190061.post116051548716757546..comments2023-10-17T03:59:01.588-07:00Comments on Doctor Housing Bubble Blog: I Am Facing Foreclosure: Response to CaseyDr Housing Bubblehttp://www.blogger.com/profile/12407700951720008626noreply@blogger.comBlogger6125tag:blogger.com,1999:blog-35190061.post-1160771115738416292006-10-13T13:25:00.000-07:002006-10-13T13:25:00.000-07:00Caroline:23.8% of American households have no cred...Caroline:<BR/><BR/>23.8% of American households have no credit cards at all -- no bank cards, no retail cards, nothing.<BR/><BR/>Another 31.2% of the households the Fed surveyed paid off their most recent credit card bills in full.<BR/><BR/>So together, the households that owed nothing on credit cards equaled 55% of the total.<BR/><BR/>I would be interested to see stats regarding income relative to debt.Dr Housing Bubblehttps://www.blogger.com/profile/12407700951720008626noreply@blogger.comtag:blogger.com,1999:blog-35190061.post-1160764083999611322006-10-13T11:28:00.000-07:002006-10-13T11:28:00.000-07:00I wonder what percentage of households have LESS t...I wonder what percentage of households have LESS than $1000 credit card debt, and what their average income is? And what percentage of households have no credit card debt at all?Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-35190061.post-1160713248881863722006-10-12T21:20:00.000-07:002006-10-12T21:20:00.000-07:00According to Wikipedia:“In 1745, the Catholic teac...According to Wikipedia:<BR/><BR/>“In 1745, the Catholic teaching on usury was expressed by Pope Benedict XIV in his VIX Pervenit, which strictly forbids the practice as such, although he adds that "entirely just and legitimate reasons arise to demand something over and above the amount due on the contract" - such reasons could include the risk of loss, the time value of money in the modern economy, etc.”<BR/><BR/>http://en.wikipedia.org/wiki/Usury<BR/><BR/>Besides that, you can also read regarding debtors prison:<BR/><BR/>“A debtor's prison is a prison for people unable to pay a debt to another. Prior to the mid 19th century debtor's prisons were a common way to deal with unpaid debt. In the United Kingdom, the Debtors Act of 1869 abolished imprisonment for debt (although debtors who had the means to pay their debt, but did not do so, could still be jailed for up to six weeks).”<BR/><BR/>The point I was trying to make in a historical context is that lending standards are now at the opposite end of the spectrum. Once they were morally wrong now they are seen as no big deal to a large part of the population. Even bankruptcy carries no social stigma. Banks even only a few years ago had to ensure that the mortgages they gave out had some chance to be repaid. 20 percent down was a good way to ensure this. Now with Mortgage Back Securities (MBS) they needn’t hold loans longer than a month.Dr Housing Bubblehttps://www.blogger.com/profile/12407700951720008626noreply@blogger.comtag:blogger.com,1999:blog-35190061.post-1160685809932162122006-10-12T13:43:00.000-07:002006-10-12T13:43:00.000-07:00Debt wasn't illegal. Debtor's prisons were for un...Debt wasn't illegal. Debtor's prisons were for <I>unpaid</I> debts. Of course, a lot of hardworking people ended up in debtor's prison, just as many people today end up in bankruptcy (say, due to illness or divorce or a death in the family).<BR/><BR/>Usury was illegal and the highest moral authority of the times (The Good Book) had specific prohibitions against it. <BR/><BR/>So what side are you on? Do you think debt is a crime? I don't really believe you're advocating public hangings here... are you?Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-35190061.post-1160517522509648982006-10-10T14:58:00.000-07:002006-10-10T14:58:00.000-07:00Banks love debt. If anything, they would love to ...Banks love debt. If anything, they would love to keep you paying interest for the rest of your life. And you are right that many people go into massive debt due to necessity. Take a look at these sobering facts:<BR/><BR/>• More than a third -- 36% -- of those who owe more than $10,000 on their cards have household incomes under $50,000, according to the VIP Forum analysis.<BR/>• 13% who owe that much have household incomes under $30,000. <BR/>• The percentage of disposable income used to pay debts is still near record highs.<BR/>• The median value of total outstanding debt owed by households rose 9.6% between 1998 and 2001.<BR/>• Bankruptcies set another record in 2003, with 1.6 million personal filings, the American Bankruptcy Institute reports.<BR/>Meaning that lower income folks are getting hit hard. But the stats aren’t as bad as you may think:<BR/>• Only 29% of households owe $1,000 or more on their cards.<BR/>• 21% owe $2,000 or more.<BR/>• 6% owe $8,000 or more.<BR/>• 4% owe $10,500 or more.<BR/>• 1% owe $21,400 or more.<BR/>So there is a wide gap here. Those that do not know how to manage debt REALLY do not know how to manage debt. And those that do generally do rather well with credit card debt. The more sobering stat is the one that Americans have a negative savings rate. If one has very little debt and no savings where does the money go? Housing in large metropolitan areas. Healthcare. Energy and food. Unfortunately inflation (according to the BLS and CPI at least) hasn’t kept up and neither have wages.Dr Housing Bubblehttps://www.blogger.com/profile/12407700951720008626noreply@blogger.comtag:blogger.com,1999:blog-35190061.post-1160515997288019202006-10-10T14:33:00.000-07:002006-10-10T14:33:00.000-07:00Part of the problem is that banks encourage debt -...Part of the problem is that banks encourage debt -- in some cases literally hounding people with direct mail and other advertising to apply for high-interest credit cards.<BR/><BR/>Then the banks whine to Congress about defaults. Consequently, debt laws were recently changed -- in favor of the banks. Debtors can't just wipe the slate clean any more. The banks have a right to hound them for payment to the grave.<BR/><BR/>And alas, the main reason for credit card debt in this country isn't a "culture" of spending. It's family illness. People lose their jobs and face high medical bills. They go into debt to save a life. Then their own lives are ruined.<BR/><BR/>Interest rates are usurious. The feds used to send mafiosi to jail for asking six for five. These days, banks are charging 25% in some outrageously egregious cases -- and that doesn't include tack-on fees.<BR/><BR/>What we need is a Congress of Democrats and a president who is a Democrat so the laws can be reversed and the banks can be stomped back to size.The New York Crankhttps://www.blogger.com/profile/04489472134701718697noreply@blogger.com