Part of the documentary, In Debt We Trust…

In the beginning of this video, a church in Norfolk, Virginia takes donations from it’s church members to help one member liquidate all of their debts. Then the person is told to cut up his/her credit cards! Sounds like a good plan? Sure! Maybe all churches should implement this plan.

It’s interesting to note that this documentary actually came out in 2006. I think many experts had been predicting that the credit/debt bubble was going to eventually burst.

And now? Here we are!

I sympathize with Onigiriman when he laments about the current financial crisis. It’s really starting to personally takes its toll on me too. As a middle-aged dude who’s got savings, some stocks, a retirement plan and some life insurance, not to mention a mortgage payment… the thought of financial doom is definitely weighing down on my family and I.

Onigiriman laments:

I wake up today and find out that Wachovia has melted down. I don’t want to get too graphic, but I swear, I thought I’d find bricks in my underpants. WTF is going on? I mean, I have a CD in Wachovia, not a big one, mind you. I am a man of modest means, but geez, do the freakin’ fat cats exemplified by those on Wall Street and in the current administration have to take this away from me, too?

Supposedly, this whole mess was started by then President Clinton, signing a piece of legislature just before the end of his 2nd term, that made it easier for low-income folks to buy a home. But, the big problem is that in the era of the two Bush terms of this decade, people ran with it… really got into some heavy debt with housing and credit cards. The housing market took a dive for the worse and people’s homes, instead of appreciating were losing their value… in many cases, to the point where the money they owed for the house was more than the house itself!

Anyway, we then witnessed the stock market take the big plunge and investment banks started tanking. I have my life insurance with AIG and they tanked!

With gasoline prices rising dramatically earlier in the year, everything from food, clothing, to basic necessities also increased. And what we have is a pretty bad economic situation for most of us.

What surprises me is that other than Onigiriman and myself, I don’t hear from other bloggers about their personal plights. This leads me to believe that they are either indifferent to the situation, are doing extremely well financially that it doesn’t really affect them, or they are worried about it but they probably don’t want to think or write about it.

I’m already living as frugally as I can. I try not to go out unless I absolutely have to. I don’t dine out much, and I’m literally watching my pennies and nickels and dimes.

This economic crisis is rough folks. I see at least 3-4 houses right now around my neighborhood that are “bank owned” and up for sale!

This is un-officially being called the largest bank failure in the history of the U.S. Economy. Today Washington Mutual was closed by the Federal Government and and its assets sold to JPMorgan Chase & Company to the tune of $1.9 billion.

The above Washington Mutual commercial is kind of prophetic, in that it shows what appear to be banking executives (?) getting ready to jump off of a tall building.

NEW YORK/WASHINGTON (Reuters) - Washington Mutual Inc was closed by the U.S. government in by far the largest failure of a U.S. bank, and its banking assets were sold to JPMorgan Chase & Co for $1.9 billion.

Thursday’s seizure and sale is the latest historic step in U.S. government attempts to clean up a banking industry littered with toxic mortgage debt. Negotiations over a $700 billion bailout of the entire financial system stalled in Washington on Thursday.

Washington Mutual, the largest U.S. savings and loan, has been one of the lenders hardest hit by the nation’s housing bust and credit crisis, and had already suffered from soaring mortgage losses.

Washington Mutual was shut by the federal Office of Thrift Supervision, and the Federal Deposit Insurance Corp was named receiver. This followed $16.7 billion of deposit outflows at the Seattle-based thrift since Sept 15, the OTS said.

[ This entry is my contribution to the Rice Bowl Journals Collaboration Project for September ]

As I look at my little coin collection of pennies, nickels and dimes, I’m thinking…

So, our own government is planning to bail out those big investment banking firms to the tune of $700 billion dollars, maybe more. Read more

On September 18 the Fed cut its target for the fed funds rate by 50 basis points (0.5 percentage points), from 5.25% to 4.75%. The move surprised many analysts who had been expecting a more modest cut of 25 basis points. For those versed in the Austrian theory of the business cycle, as developed by Ludwig von Mises, the aggressive Fed “stimulus” is ominous indeed. Not only will it pave the way for much higher price inflation than Americans have seen in decades, but it will also exacerbate what could be the worst recession in twenty-five years.

This bit of news was from late last year, which (back then) predicted a possible worst recession in 25 years scenario.

Since then, millions of Americans have lost their homes through foreclosures, we’ve seen gas prices climb to unimaginable heights, and inflation and higher prices on everything from food and entertainment to retail goods have taken its toll on the average consumer.

I was going to buy some arranged flowers for the home when I noticed that the price was twice as much compared to last years prices! Of course, gas? I don’t even wanna go their right now, it’s too depressing.

I’m no expert and I confess to not understanding what all the experts say, but everything sure as heck points to a Recession in 2008. And you can feel it in the air… everyone is bracing for it.

My wife is optimistic however, and believes everything will turn around towards the end of the year. And, was that my imagination? The gas prices fell by 10 cents or so? Hmm…

I intend to keep my chin up, and to roll with the punches…

…And Will I Really Save Money In The Long Run?

I confess that I own a gas guzzling SUV, but let me explain. I had a few valid reasons for buying a Ford Expedition back in 1997:

1. Because I come from a large Filipino family, we needed a large vehicle for out-of-town trips to visit relatives and to go to Vegas!
2. I’m a musician who plays drums and keyboards, so I really needed something large to carry all that equipment all over town to gigs.
3. I admit that I feel safer driving an SUV home from gigs. I’ve had my share of close calls with drunk drivers in the wee hours of the morning!

It Would Be So Cool To Own A Mini Cooper, But…

That said, I’ve been keeping my eye on a Mini Cooper, or Toyota Prius, or some other Hybrid car in order to save money because of the rising costs of fuel. But, it would have to be something that had enough trunk space or could adjust so that I could load my drums (thus my dilemma). Read more