The Panic of 2007

Are you personally anxious about the financial markets and the implications of the mortgage payment crisis on your own personal or work finances?

Nine Shift was quoted in the NY Times last year as predicting a decline in the Dow Jones Average caused by a financial collapse similar to the Panic of 1907, and for the very same reasons. Some of you have granted me a one year extension on the prediction, and I appreciate you allowing me to be one year off.

But this is probably it. The word "panic" was mentioned twice on NBC in the last two weeks. The global markets are affected. The central banks (Federal Reserve in the U.S.) has had to intervene several times already. The worst of the mortgage defaults is forecast to be this October. And of course the stock market has ceased its gains this year.

What do you think? And are you personally anxious by it all?

Comments

[John Carney]

I am not personally worried as I never borrow what I can't afford to pay back but I am worried for those homeowners who borrowed what they qualified for and not what they could afford.

As an example, I have a friend who was having serious problems making a $500 a month rent payment on an apartment so she went out and bought a 3-bedroom home for $900 a month because that is what the bank told her she could afford.

These are the individuals I feel sorry for.

[Jenny Bell]

All I can say is thank goodness I didn't do a ARM when I recently bought my first home. We had consider interest-only or ARM loans when we were shopping, but in hindsight my parents were right (again!) we went 30-year fixed so we will keep our house.

[Christina Kelley]

Thanks to your suggestion on page 70. I donated a computer to one of my 9
low income students in my EvCC Customized Job Skills Training Course this
morning. The class had a brainstorming session to determine how I should
make the decision and then secretly voted to determine which of the 4
students in need would receive the computer so they could also be part of
the giving. Just thought I'd let you know that YOU MAKE A DIFFERENCE. Great
Book!

Life is good,
Christina Kelley, Everett Community College
Customized Job Skills Trainer