Slashdot

But first, an update: As of February, 2008, 10.3% of all homes are "under water" on their mortgages You can read the gory details about half-way down the page ...

Silicon Valley is melting down as well ...

Report: Midwage jobs vanish in Silicon Valley
Tom Abate, Chronicle Staff Writer
Tuesday, February 19, 2008

While other companies are downsizing, electrical contractor Dirk Swanepoel is looking to boost his eight-person Morgan Hill staff.

"The biggest problem I have is a lack of quality people," said Swanepoel, who says demand for electrical work never seems to stop growing. Even when the dot-com bust emptied buildings, electricians had to turn out the lights.

"Unfortunately, we had to go into some of the buildings we had built up and take some of the work down," he said.

Swanepoel's experience is in line with a new report that will be released Friday that identified electrical work as one of the few growing, well-paid fields accessible to someone without an advanced degree. Yet most job seekers don't know such opportunities exist, nor do they have any way to get retrained if they need to make a career switch, according to the 2008 Silicon Valley Index.

The index is an annual snapshot of Silicon Valley, which is defined as all of San Mateo and Santa Clara counties, plus Scotts Valley in the Santa Cruz area and Fremont, Newark and Union City in the East Bay.

For the first time, this report documents an alarming fact: The middle fell out of the region's payroll between 2002 and 2006.

Federal and state jobs data show that 62,050 midwage jobs - defined as having salaries between $30,000 and $80,000 - vanished during that four-year period, according to the report.

During the same four years, employers added 66,200 jobs that paid less than $30,000. And despite bullish times for the likes of Google and Apple, Silicon Valley employers added just 16,790 jobs during that period that paid more than $80,000.

"We have indeed documented a squeeze on the middle. Now we have to figure out what it means and what to do about it," said Russell Hancock, president of Joint Venture: Silicon Valley Network, the public-private partnership group that has been issuing such reports since 1995.

As of this month, 10.3% of all homes in the US are "under water" with respect to their mortgages.

By EDMUND L. ANDREWS and LOUIS UCHITELLE, The New York Times Posted: 2008-02-22 10:03:10
Filed Under: Business News, Nation News

WASHINGTON Prodded in part by some of the nations biggest banks, the Bush administration and Congress are considering costly new proposals for the government to rescue hundreds of thousands of homeowners whose mortgages are higher than the value of their houses.

Not since the Depression has a larger share of Americans owed more on their homes than they are worth. With the collapse of the housing boom, nearly 8.8 million homeowners, or 10.3 percent of the total, are underwater. That is more than double the percentage just a year ago, according to a new estimate of the damage by Moodys Economy.com.

This is only the beginning. 2008 and 2009 are when most of the mortgage resets are expected to occur. Look for 30% of all homes to be "under water".

Some say that this doesn't affect everyone - just the people who HAVE to sell. Of course, just like the rising tide of the bubble lifted up valuations of all homes, not just the ones that were sold, so the bursting of the bubble lowers the valuations of all homes, not just the ones forced to sell.

30% may actually be optimistic. Some bears are saying it'll be 50%. Either way, its a disaster, and one that even 0% interest rates can't "fix". Look for a Japan-style "lost decade".

So, how to survive?

1. If you're under water now, start the "walk away" process. The sooner you do it, the sooner you'll be able to start putting away the difference between rent and mortgage payments. Depending on where you live, you may have a year or more before you're forced to leave - that's a year you can sock away money, rather than throwing it at a lost cause.
2. If you're not under water, good for you so far - but unless you have 50% equity, you may end up behind anyway. In the meantime, if you're not already "divested" from home-ownership, you can't just pick up stakes and move to a better job if you have to; see if you can sell now, before it gets worse;
3. Debt - lose it. Auto debt, credit card debt, all debt. Do anything and everything you can to get out of debt over the next 4 years (the trough - 2011). This way, you'll be able to take advantage of any upswing sometime (hopefully) in the next decade.
4. Hopelessly in debt? Wipe the slate clean. The sooner you "take the cure", the sooner you're on the other side.

This applies doubly if you're in California, Florida, Nevada, or the cities of Chicago, Cleveland, or Detroit.