A common question people have these days is how is someone expected to maintain or get ahead when prices keep going up everywhere you look. Well, I will admit I don't have an answer for each and every person but when times get tough you have to get a real understanding of how much money you are making and even more importantly where is ALL YOUR MONEY GOING. I am in the trenches with you and we have to work even harder to win the war against debt, bill collectors, and crazy spending habits.
To win the battle we have to have a great strategy and understand what we are up against. If you are living in the same world that I am, we are fighting higher oil prices, declining home values, and a slumping economy. Here is a quick summary of our opponents:
People are losing jobs: The financial capital of the world, New York City, estimates job losses to the financial industry which also represents their highest-paid workers and a huge source of tax dollars. They are estimating the losses are very similar to the 2001 time period another time when the economy felt the impacts of a recession.
People ain't paying loans back: The Federal Reserve reported that more people are delinquent across all industry except agriculture (probably because they are making big bucks on high food prices). Some people have stopped paying their credit card bills and those numbers ironically are roughly around the same mark to the 2001 recession. They are watching closely to see if we reach levels that were similar to 1991, another period of economic recession.
Mortgages and the housing industry is a mess: Not only did buyers take on houses they could not afford but how many people do you know that bought huge places way out in some random suburb. These were incorrect bets because most jobs are not located in these remote suburbs and long commutes are very expensive and its harder to sell your home when times get tough...all bad miscalculations that have caused home prices to decline.
People are not pimpin their rides: Car industry experts are predicting people won't be buying as many new cars and threw a chance of a rebound in 2008 out the window. Need proof take this weeks forecast by Ford (F), then yesterday's comments by General Motors (GM). Both said car sales will be horrible and imagine that, GM's stock is trading a levels that haven't been seen in 26 YEARS!! So if you are buying a car, enjoy but do you really want that Range Rover now and all the gas it guzzles.
The Repo man is tired: When people were buying houses they had to keep up with their neighbors and also buy boats. As houses dropped people stopped those boat rides which take gasoline and diesel and cost hundreds and thousands to fuel. And when you can't sell because no one want to buy then you stock paying...and people have stopped paying on boats, cars, bikes and any other thing that you buy with a loan and that means that banks are calling on the REPO MAN.
POSSIBLE PLAYS
On to my recommendations after understanding your Hot Topics. The repossession industry is finally a sexy business because banks want their stuff back. Oddly enough a company came up on my screening this month (which makes sense) and we have a few stock picks for you:
Credit Acceptance Corporation (NASDAQ: CACC)
Asset Acceptance Corporation (NASDAQ: AACC) - Search Urbanomics for the recent recommendations about this stock. And notice how it has been scorching hot since then. I am waiting for any pullbacks and loading up on the REPO MAN
Urbanomics ~ A site where the average person can learn to invest, manage their finances, ask stock and retirement questions in a format that easy to understand.
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