I really like listening to the Carpenters and singing along with them. But right now, I feel for the carpenters as this economy makes it tough to listen to their hammers at work. Supposedly, it is all turning around. We are told that now is the time to pounce on the homes with the assistance of the Federal Government through their $7,000-$8,000 first time home buyers handout.
I would strongly advise against it for two reasons. First, read the fine print. You’ll find the poison pill in that offer is a big one. Second is you would be acting prematurely.

The foreclosures and the pain is not stopping any time soon. It will get worse and the prices of homes have to keep on dropping. The first wave of foreclosures were the speculators who invested in housing in hopes of getting their money back. When the spiral down started, they were left holding the bill and defaulted. The second wave are those who were given loans they never should have been given. We can thank the USA federal government for screwing it up. But now is the Coming 3rd Wave of Foreclosures. What are they? The third wave are the victims of the rapidly growing unemployment issue.

Currently, the USA unemployment rate is considered to be 9.4% on the conservative side. As this article delves into, a more realistic number is 16.4% when everything is factored in. I have seen or heard of many hard hit in this area between my two jobs (one virtual, one at the office). They just can’t pay all the bills. To make matters worse, the mixed and chaotic messages coming out of Washington D.C. are paralyzing the business field. Businesses have to plan for the future through yearly budgets and long term projections. They can’t when threats are of increasing taxes, greater burdens of health care coverage costs, and the lethal Cap & Trade. Quite simply, they have to err on the side of caution to maintain a profit margin. That means terminating employees or not expanding. Sure a few companies are expanding but many are forced to shrink or sit in a wait and see pattern.

One thing that has to be pointed out is the likely 4th wave of foreclosures if the Cap & Trade massive tax increase goes through. Some reports say it will cost each household $3,000 to $8,000 more each year because of the increased costs of everything. Also remember, tax credits do not equal cash in pocket. What it will do is push many couples or household living on the financial edge over the edge despite their employment status.

This doesn’t cover America’s Retirement Crisis that is getting worse with all of this government intervention into the private sector. Those investors that are demeaned by the President and media are often those in charge of the pension plans for companies or public servants. Combine that with the looming Baby Boomer retirements and subsequent downsizing of their homes and you have the making for a major housing mess.

What do I recommend? Be like a wise businessperson. Wait until all of the insanity settles before making a move. We are. I’ll leave you with one more point to ponder. It is based on the Law of Supply & Demand and the excessive spending in the USA of the last 20 years.

Many consumers have figured out a basic principle in money management. Don’t spend more than you have. Live within your means. For too long, many in the USA lived life by digging in debt. It is time to pay the bills. The nation will be better when the politicians figure that out as well.

Thanks for reading!

Live Well and make it a great day,

Anah

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