Back to Doom & Gloom

Hope you all had a nice holiday weekend… now back to regularly-scheduled programming…

Very interesting blog post by Charles Hugh Smith here, discussing the impending recession/depression/whatever that’s coming our way.   The slow death of the FIRE economy like a slow-motion tragedy of sorts, and it has yet to truly affect many American households.

The recent drop in mortgage rates has piqued my interest enough to call several of the local mortgage brokers I know.  When we moved into our house a few years back, I locked in to a 30-year fixed conventional loan at 6% interest, figuring that would be the lowest rate I’d see anytime soon.  Well, rates are lower now… the question is whether I would qualify for the best rate possible with today’s tighter lending standards.   A lot will depend on the current valuation of my house, which is likely lower than the fantasyland valuation my local assessor has assigned to it.   We’ll see what, if anything comes of this.   I have no idea how long I’ll stay in this house, but if I can shave some cash off the monthly payment, then what the hell.

Especially after reading Mr. Smith’s article, I’m doubly glad to have made the jump to a new job earlier this year.  I left a job with an insurance company and am glad to have done so.   Like many other folks, I’m looking to see what I can do to trim the fat from my monthly budget, and some overly-large life insurance policies on myself and my wife are on the chopping block.    I wonder how many other households in worse financial shape are coming to the same decision?  Being well insured is nice, but looking at the current economic environment, I am wondering about how wise it is to be sending a decent chunk of money to insurance companies that may or may not be in trouble.  If I were older than my current 39, I might be more risk-averse I suppose.

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I had to go out to the local big box store on Friday to pick up some things for my wife’s annual holiday baking session.   Arriving around noontime, I was surprised at the store traffic.  There were people there shopping, of course, but I was also able to grab a few things, walk to the registers and find multiple cashiers just sitting there waiting for someone to approach.   I’m not one for ‘Black Friday’ shopping madness, but I’m guessing this is not the way things would have been last year or before that.

From the sounds of it, if the holiday shopping season isn’t a blockbuster (and odds are good it won’t be), a number of major retail chains will file for bankruptcy.   I wonder how that will play out in the service economy we have become over the last few decades.

I don’t know about any of the rest of you, but this has been a wierd month or two for me.  Watching the financial mess spread has been both reassuring and maddening at the same time.  It’s reassuring for me in the sense that I feel that the things I have read and written about over the last few years are more than just tinfoil-laced conspiracy rantings.    It’s maddening to see the ‘deciders’ in charge of things obviously picking and choosing which companies will live and which will be consumed.   It’s also maddening to see the media and politicians toss around figures like $300 Billion like it’s just so much chump change.   Modern money is based on debt, and we have racked up some huge debt obligations that will have to be paid off at some point in the future.  I wonder how badly we are screwing the next generations over trying to avoid paying the piper for past excesses.

This may put me in the minority, but I would rather take the financial pain now in hopes of making things better for my children when they are adults.   Economic crises are the times when social chaos erupts, and I would rather get it over & done with soon while my kids are both under the age of ten.  That’s just me, though.

We are living in interesting times, and I don’t like it.  Because I’ve been reading about this stuff for the past 4-5 years, much of today’s news events are not unexpected for me at least in terms of the broader themes.   In some ways I think this is a curse, for I’m getting more stressed out about it than most of the people around me.   If you see more breaks between posts, you’ll know why.

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