It hasn’t affected my lifestyle in any way. 
Actually, the recession is saving me money. I’m doing some building at the moment and the cost of materials is down.
Things have been going well for me recently (sales of my hair growth health supplement “Orang Potion” have really taken off).
I’m doing my part. We bought a new washer-dryer and I got an iPhone.[/quote]
And I’ve been doing my part, spending like there’s no tomorrow. I’ve poured well over NT$10 million into this economy in the last few months.[/quote]
I bought a new monitor, and I’ll buy another one next month. It’s also a good time to move to Core i7, as RAM prices are down.
I’m another who has spent like crazy lately, although most of what I’ve bought has been necessary or at least beneficial. It should start making me money, so in the long run I’ll come out on top. Right now I feel kinda broke because of it though. 
I still have my job (thank god) but am changing my lifestyle especially in the little things in life. Like leaving home early and take the bus instead of a cab. You pay as little as one tenth of what you would’ve paid in cab fare. When I absolutely have to take a cab, I call for one and get the 5% discount on the fare. When I was shaving this morning, I realized my razor blade needed changing, but decided against it. An extra couple of days use would save me some $. Things that would’ve gone into the trash before are being recycled so as to save on the cost of Taipei’s official garbage bags. Yeah, it’s taken an economic downturn to make me more environmentally conscious. 
The recession affected my lifestyle BIG time! But in a positive way. I bought a house (valued in excess of NT12 million) for just NT 6 million. 
[quote]The recession affected my lifestyle BIG time! But in a positive way. I bought a house (valued in excess of NT12 million) for just NT 6 million.
[/quote]
That would make the value of the house 6 million, right? The valuation was simply wrong or fanciful or both.
[quote=“Fox”][quote]The recession affected my lifestyle BIG time! But in a positive way. I bought a house (valued in excess of NT12 million) for just NT 6 million.
[/quote]
That would make the value of the house 6 million, right? The valuation was simply wrong or fanciful or both.[/quote]
Anubis, You mean the asking price was NT12 million, instead of the value quoted by a bank, right? Otherwise, it would be either wrong, like Fox said, or very hard to believe. Anyway, congratulations! :bravo:
[quote=“Fox”][quote]The recession affected my lifestyle BIG time! But in a positive way. I bought a house (valued in excess of NT12 million) for just NT 6 million.
[/quote]
That would make the value of the house 6 million, right? The valuation was simply wrong or fanciful or both.[/quote]
Well thats kinda what happened here in America. Peoples home values have dropped by half or more. Problem is that a lot of people were speculators. They bought in at an introductory interest rate thats artificially low for the first 2 years or 3. And they thought that the house price will increase dramatically in that time so by the time the real interest rate kicks in , they are ready to sell AT A PROFIT. And expecting this profit, they also took out a loan against the future perceived value of their home. And what happens? When the time comes for the real interest rate to kick in and suddenly their 2500/month payment goes up to 5600/month they cant pay and the loan goes bad. The bank takes it back and cant unload it on the market even at half off.
Five percent of mortgage loans are sour. That doesnt seem a lot but was enough to trigger this current crisis.
Everyone believed this real estate hype and bought into the bubble. Banks lent money like crazy to developers and to citizens who really had borderline credit. Those people couldnt pay. Even those who were not speculators but bought too much house for the low interest rate thinking that they would be seeing a better income through a better job, a raise at work or whatever. And when those things didnt happen and instead they lost their jobs.
We have this mess.
Far cry from the crazy dot.com craze in california in 2000/2001
That’s not speculation, that’s stupidity and greed.
The banks will be happy to hear you’re keeping your money on your account and NOT spending it :roflmao: more for them to speculate with … 
That’s not speculation, that’s stupidity and greed.[/quote]
Sounds like gambling to me. A sure way to lose your shirt.
Lost the private jet.
Tommy I think you hit the nail on the head. Fundamentally, how many people can afford a 2,500 US a month mortgage payment in CA? The per capita personal income in CA in 2007 was only 41,580. Conservative lenders (there are some, but are few and far between) say that you shouldn’t have total debt exceeding 36% of your gross income. Using that 2,500 as a basis, your total mortgage payment a year would be 30,000. Now to find how much you have to make, as a minimum, to not exceed 36% debt to income ratio divide 30k by .36. That comes out to be 83,333 per year. That’s just a little less than the combined income of a two people making the average salary (83,700). Most lenders don’t want to see you with more than 28% debt to income ratio; they call it the maximum housing expense. That would mean the couple needs to make a combined 107,142 dollars per year to not exceed that ratio.
What does that have to do with the housing price you might ask? A 400k dollar house with 10% down and the other 90% on the mortgage note, at 6.5% interest has a monthly payment of 2,800.44. A 300k dollar house with 0% down, and 110% mortgage to cover closing costs (a sub prime example) at 6% interest has a monthly payment of 2,567. Right now the overnight average interest rate on a 30 year fixed is 5.27%. Imagine how bad it must be if you were paying interest only on the loan then it jumped to 11 or 12%.
Given that all of this is averaged, that means there is a significant portion of the CA population are living in houses they can’t afford at all. The homeownership rate in the US was right around 67-68% in 2008. For California, in the 2000 census, the homeownership rate was 56.9%. Now the shocking statistic, CA’s median home price fell 38% from December 2007 to December 2008, from a high of 402,000 to 249,000. Based of these numbers, at least 7% of the population of CA was in houses they could never hope to pay off. Their only goal was to buy, hold for the prices to increase in the near future of two to three years, and then sell for a profit. As a note, the 7% may be wrong, but judging from the number of foreclosures, it seems to be pretty accurate.
Well… the fact that I’m in Taiwan and not in San Francisco State University has a lot to do with the recession. Right when I was applying for student loan the recession hit. The bank decided to drop my loan and I couldn’t find any loan at an appropriate interest rate. So with no money I came back.
And the recession also affected my major. I was originally studying to become an investment banker, not very smart to do that anymore!