The Latest Global Down-Turn (or whatever the latest buzz word is) 1

[prohammy]

This isn't meant to be UK-centric but here goes.....

I just wanted to get a feel for what my fellow Engineers thought about the present credit-crisis and the affect it has had on your own jobs and job prospects.

Do you feel that the job market has been squeezed?

Or is there any difference between now and twelve months ago?

At a time when we in the UK have had a few decreases in mortgage rates (nothing as aggressive as those in the US) but are suffering a rapid rise in basic costs such as electricity, gas & food, I have been wondering......

Where do I go from here?


Kevin

“It is a mathematical fact that fifty percent of all doctors graduate in the bottom half of their class." ~Author Unknown

"If two wrongs don't make a right, try three." ~Author Unknown

 

[btrueblood]

Vc66, somewhere I thought I read a post where you said you "were pregnant". Maybe I'm mistaking your handle for another one very similar, or maybe your meaning was collective and not singular, I apologize either way.

Kenat, yeah. That's why we got the h%^^ out of SoCal, or Cal in general; we were DINK engineers with Master's degrees, and were still looking at about 5 years of saving on our combined income for anything "close" (< 1 hr commute), and those were crumbling shacks on postage stamp lots. Even houses in the desert are too dang expensive, and no way could I survive a 1- to 1.5 hour commute, that is heart attack city for me.

Dunno. Everybody wants a house, everybody wants to live close, own two cars. I think with fuel prices going higher, we are going to start to see a resurgence in inner-city living, there is some already happening in downtown Seattle with old warehouses being converted to condos (and boy are they pricey).

 

[KENAT]

I grew up in the South of England so the CA house prices aren't quite as alarming to me as others but still, in many places out of reach unless we're really willing to slash our standard of living.

KENAT, probably the least qualified checker you'll ever meet...

 

[MechEng2005]

I purchased my first home less than 1 year ago. I do think it was a good time. Home prices in my area hadn't really dropped, but they had stopped increasing and homes had been on the market for some time that there was certainly more room to negotiate with sellers.

As far as cost, the total cost was about 2.5x our annual income. Though we did have savings and did not borrow the full amount.

I do think that the economy has hurt some people that didn't do anything "wrong" or planned poorly. However, I know a number of people that bought more than they could afford. When my wife and I went in to get pre-approved for a home mortgage, we told the lender how much we wanted to be pre-approved for based on what we determined we could afford after looking at our budget and spending. I'm pretty sure that we could have gotten a loan for 1.5-2 times as much. It seems that if you have a fair amount for down-payment, the lender isn't too worried. They know that between the down-payment and repossessing the home, they will get paid. This means the buyer has to be very cautious. The lender isn't going to be looking out for them. And making sure you can afford things you buy should be a personal responsibility anyways. It is somewhat disgusting that the lender would set people up and tell them they can afford things that they most likely cannot though.

Anyways, I'm rambling, so it's time to end this post.

-- MechEng2005

 

[moltenmetal]

The mortgage interest deductibility for tax purposes in the US added fuel to this particular little fire.

In Canada, where there is no mortgage interest deductibility from taxes, it hurts badly to take on a big mortgage, and it makes sense to pay down your mortgage as fast as humanly possible. No guaranteed investment of any sort gives you an after-tax return anything close to what the banks want for a mortgage up here. Of course, the financial folks still suggest you max out your RRSP (our version of the US 401K plan) before you make extra payments on your mortgage, but that's only good advice if you're getting awesome returns in your RRSP. The bank always gets their piece- guaranteed- and ultimately that piece is after-tax dollars.

We have no corresponding "credit crunch" in Canada, though a few of our banks got their fingers caught in the "commercial paper" cookie jar, or when the bond insurers threatened bankruptcy. But we're still so tied to the US economy that our boat will sink along with theirs to a significant extent regardless.

 

[LCruiser]

Here's a pinch for the US that's related in the Big Picture:

http://apnews.myway.com/article/20080625/D91H2TT80.html

How does $1,000 lost per person in an instant feel?

 

[cranky108]

Wonderful, the goverment wants to help.

You know what they say, politations like babies should be changed often, and for the same reason.

Personally, I think that on the back of your property tax assement there should be a box to check that is said sold.

 

[ewh]

... and guess what their slipping in with that bill... ALL credit card transaction to be reported to the IRS

Senate bill summary text:
"Payment Card and Third Party Network Information Reporting. The proposal requires information reporting on payment card and third party network transactions. Payment settlement entities, including merchant acquiring banks and third party settlement organizations, or third party payment facilitators acting on their behalf, will be required to report the annual gross amount of reportable transactions to the IRS and to the participating payee. Reportable transactions include any payment card transaction and any third party network transaction. Participating payees include persons who accept a payment card as payment and third party networks who accept payment from a third party settlement organization in settlement of transactions. A payment card means any card issued pursuant to an agreement or arrangement which provides for standards and mechanisms for settling the transactions. Use of an account number or other indicia associated with a payment card will be treated in the same manner as a payment card."


Believe it if you need it or leave it if you dare. - [small]Robert Hunter[/small]

 

[Zapster]

ewh,

Why should we be concerned about credit card transaction being reported to the IRS. I would not have a problem with just about anyone taking a look at my credit card transaction records. Is it a identity theft issue?

 

[ewh]

It isn't just credit cards, it is any electronic transaction. Since when does the govt have the right to examine our bank accounts just because it can?
It is not worth the angst of going into it here on these fora, as many people don't care that our basic rights are rapidly disappearing. Why worry if you haven't had to use them?

Believe it if you need it or leave it if you dare. - [small]Robert Hunter[/small]

 

[KENAT]

Good ol big brother. Shaw was just off by a couple of decades, give or take.

KENAT, probably the least qualified checker you'll ever meet...

 

[ischgl99]

The purpose of the transaction reporting looks like a way to check for unreported income based on how much someone is claiming as income on their taxes vs what they actually are spending. Spend more then what the IRS thinks you should and suddenly you are audited. The FBI uses this method to look for drug dealers and has caught some spies this way. The reasoning is, spend more then you should and there is likely some illegal activity going on. I can imagine many business travelers will be caught up in unnecessary audits if that is what they are going to use it for. I just hope the states are not allowed access to this, think of all the out of state transactions they could start collecting "use" tax on that we "forgot" to claim on our income tax.

 

[ewh]

The purpose is pretty much understood. So is the purpose of a concertina wire. It won't hurt unless you do something "wrong".

Believe it if you need it or leave it if you dare. - [small]Robert Hunter[/small]

 

[DonPhillips]

Next, the states will want to review the credit card records to verify no out of state internet transactions with no paid state taxes are slipping by.

Don Phillips

http://worthingtonengineering.com

 

[SomptingGuy]

I was thinking of that too, unpaid sales tax on mail order goods.

- Steve

 

[jmw]

Shaw or Orwell?

JMW

http://www.ViscoAnalyser.com

 

[cranky108]

I wouder if this would include paypal? For everything else just use cash.

 

[DonPhillips]

It depends on how you use Paypal. I have mine set up for checking accounts and credit cards - depending on what I am buying and when, to manage cash flow.

Don Phillips

http://worthingtonengineering.com

 

[jmw]

Incidentally, it seems the money lenders are their own worst enemies.
Having embarked on a campaign to lend as much money to as many unsuitable credit risks as possible (and some in the US are to be investigated by the IRS is it? the same should happen in the UK)they now have apolciy to further exacerbate the problem.
It appears that the number of mortgage applications they have approved has fallen dramatically.
Of course, you can see their point, if property prices are falling then even if they drop 100% mortgages and require 10-20% deposits, the rate of fall is such that pretty soon the borrowers 10-20% has been wiped off the value and then the remaining equity won't cover their 80-90% lending.

In the past, when you went to buy a house in a rising market, the mortgage company's valuer just walked through the valuation process and approved the money. Of course, the estate agents want to sell houses and that means they need sellers and the way to get sellers is to promise them they can get a good price. SO now we have a potential conflict between the estate agents valuation and the Mortgage company's valuer's evaluation.

The nett effect is fewer buyers with less money looking for and expecting falling prices.

The very change in mortgage company attitudes is actually going to force prices even lower and we have the makings of a full scale property price collapse. Now whatever property values should be, it isn't good for the economy to allow a collapse. However, while the UK government is quite happy to bail out Northern Rock and even nationalise it, how ready will they be and how pro-active can they be in helping stave off a meltdown? One suspects that committing to the enormous cost of god knows how many wind farms is going to take every available penny.

On the other hand, you have a sneaking sympathy for a government that has discovered, in Google Earth, a unique way to revalue everyone's properties and put up rates only to find the house prices starting to collapse, though possibly the government's property valuers will have a completely different formula for calculating values for taxation purposes.

If you travel around the Uk you may see a number of older houses apparently featuring blind arcading in their architecture. Actually, this is not a design feature, it harks back to the time the government introduced a window tax and property owners promptly began bricking up their windows. One suspects a good few swimming pools will get filled in in in a similar manner. (Another good reason is that apparently. on Facebook, certain people are using Google Earth to identify houses with swimming pools and then arranging "flash parties" (who wrote that SF story about Flash Riots... made possible by Start Trek style "beam me up Scotty" transporters? well it appears you don't need the transporters, you just need Facebook and Google Earth to have the same devastating effect).


JMW

http://www.ViscoAnalyser.com

 

[cranky108]

I've tried one of those value my house on line sites, and according to them it's value is $0. Which is much less than what the tax people say it's worth. But maybe the $0 figgure is right as I haven't had an offer on it for the 4 months I've had it on the market.
I also looked it up on Google earth, and it shows the old roof, so I know the photo is several years old.

 

[DonPhillips]

I was surprise by how old those aerials are. My uncle in Youngstown dismantled his old above ground pool and gave it to one of his son-in-laws over 5 years ago but the aerial as of yesterday shows the pool.


Don Phillips

http://worthingtonengineering.com