So there I was, in the car listening to Gayle King (Oprah's best friend) and she is discussing issues with Suze Orman... I didn't think that I would actually hear an endorsement (why I thought suze wouldn't be frank, I do not know), but in true Suze fashion, she was perfectly clear about her choice to better our economy. Barack Obama, she said with absolute confidence. I couldn't find the conversation from the radio show, but I did find this interview from the SFgate.com with some good questions and of course straightfoward answers from Suze, including her choice of BO. This may seem trivial to some, but for those middle class people who maybe don't know who to trust about the economy, Suze seems to be one that they rely on.
Q: How bad do you think the economy will get?
A: First, the question really is how bad could it have gotten if they had not done (a government rescue). It could have been horrific. It is starting to loosen up; things are starting to get a little better.
You're going to see a lot of unemployment; a lot of downward economic trends. People spending less money; retail is going down; automotive sales are in the toilet.
We need to expect a serious, serious slowdown. Everybody needs to think about every penny they are spending. Overall, we are in for a rough year or so.
Q: Unemployment is at 6.1 percent. Could it reach double digits?
A: I think for sure you'll see it at 7 percent, possibly 8. When one looks at that, they have to wonder, am I one of those people who could be losing their job? Every single one of us is affected.
The only great thing that's happened is the price of oil. A gallon of gasoline now doesn't cost as much as it used to.
Q: When might the housing market bottom out?
A: I think it's going down another 10 percent, 20 percent, and I think you're looking to 2010.
Q: How should the U.S. address the foreclosure crisis?
A: You have to be very careful on this one. You already have had many people lose their homes. You have had many people who couldn't afford to buy a home to begin with and now we're going to spend all this money to help those who are in trouble. You have to ask: Is that fair?
If (banks) had thought quickly a year and a half ago, and said, "Let's save the people who are going to lose their homes because it affects the people who won't lose their homes, it affects the bottoming of real estate." If banks had been seriously willing to work with people, we would not be in this situation today.
Q: Whose fault is the foreclosure crisis?
A: People wanted to believe they could have the American dream. When banks and mortgage companies were saying, "You can qualify for a loan, you don't have to come up with money down, you can pay $400 a month for a mortgage that would normally be $1,200," people wanted to believe it. You can't blame them for that.
The real travesty is there was no regulation over banks, mortgage companies, mortgage brokers. No oversight over these people making fortunes off people who did not understand what was happening. No oversight over how those mortgages were bundled and sold off to Wall Street. No oversight over the ratings companies who said those were appropriate.
Q: There are so many bargain foreclosures for sale, but home prices keep falling. For whom is it a good idea to buy a house?
A: If you do not have 20 percent to put down, if you do not have a high (credit) score of 700 and above, if you cannot afford a 30-year fixed mortgage including property tax and insurance; if you don't have, on top of the down payment, an eight-months emergency fund, you should not buy a house.
If you have all those things lined up and you can go in and get a deal of a lifetime (then do it). I don't care if the house (for sale) went from $500,000; if it is on the market for $300,000, I would still go in and offer $220,000.
Q: Which presidential candidate would be better for the economy?
A: Sen. (Barack) Obama, by all means, would be better in every single possible way, and especially for the economy. He would be 10 times better overall. It's not even close.
Q: What do you recommend about investing now?
A: If you are young, this is without a shadow of a doubt the greatest opportunity of your lifetime. You should continue to invest month in and month out in your retirement account. Do not stop under any circumstances.
Q: What other political issues are important this November?
A: I am a resident of Florida where they have a proposition which would make (same-sex marriage) unconstitutional. On Monday I flew there to stand in line for 3 1/2 hours and vote, so I knew it could be counted. Obviously, I voted no on that.
I am urging every single person in the Bay Area, do not let Proposition 8 happen here, people. I am begging you, don't send us back to the Dark Ages. If anyone can turn that around, it is the Bay Area.