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October 9th, 2008
02:40 PM ET

Suze Orman on your fears

Editor’s note: Tonight on AC360° Suze Orman returned to discuss the tumbling financial markets and answered your questions. Here is what she had to say:

Anderson Cooper: A lot of questions, a lot submitted on the AC360° blog. There is down right fear, panic. Is that counterproductive?

Suze Orman: It is not counterproductive, it’s real. It’s how people feel and the markets are made up of how people feel. They buy or they sell based on their emotions, Anderson. It’s how it has always been. When Ali does this thing with the drugs, I was talking to you before we went on air, this is what is happening. People feel they need medication because they are panicking.

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Filed under: Suze Orman
soundoff (25 Responses)
  1. kimberly

    A big problem for middle class Americans that are saddled with credit card debt is they are not going to work with you to lower your interest rate or give you any kind of assistance. I don't believe even after the bail out money is dispersed this is going to change because everyone is scared to death of a major depression. It shows everyday on Wall Street. So, what is the answer to calm fears? This is a tug of war between banks, credit card companies and the middle class who needs help.. someone has to give in order for this vicious circle to end and possibly calm fears and get us on a track to recovery.
    Where and When is this going to happen? 12-18 months is just too long to wait.. Is there no quicker answer?

    October 9, 2008 at 8:29 pm |
  2. Megan Dresslar (Shoreline, Wa)

    Suze Orman is most inspired my life, she is expert financial advice to help the bloggers or the viewers! Thanks for her help to advice people who have problem financial including homes, jobs, gas, stocks, and everything......... I'm enjoy Suze's show real serious.....
    my question is Will stocks going up and steady not to drop before Nov 4th?

    October 9, 2008 at 7:40 pm |
  3. Ross Waxman

    How about simply changing the mortgage amortization of troubled homes from 30 years to 50 years? That would have no impact on the amount of the home that is owed, but would make the payment easier for the home owner to pay. Since very few people live in the same home for 30 years, does it make a difference? That would give the home owner time to wait until the typical appreciation (1 to 3 % anually) brings the home's value back to the moprtgage amount. I would think this is a solution that accomplishes many goals:
    1. Keep homes from being foreclosed
    2. Keep home owners in their homes
    3. Does not require immediate funding
    4. Maintains value of neighboring homes
    5. Keeps banks from having to manage and dispose of foreclosures

    What do you think?

    October 9, 2008 at 7:04 pm |
  4. Clarence Albuquerque

    If people have real fear, they need a real place to share that fear, even if it is in a blog. It seems a blog can feel like a place where others share the same views and experiences. I say: Share On.... whatever the feeling

    October 9, 2008 at 7:01 pm |
  5. kim

    All we can do is keep to the grind stone and not give in. Fear should not conquer us – or desperation. We can not depend on the government to provide – we must help eachother and our own communities first. If everyone did something – like watching out for elder neighbors or making sure the neighborhoods are safe, or volunteer, get rid of excess things that others dont have but can use. It starts in our own back yards then outward. We have to be self sufficient. What if there were no money and no tangible things – what if it was a true survivor situation? Bottom line – could you make it? The problems in the world are huge – and if you think you are going to make a difference macro – you are wrong. It's all about micro now. Bring it back home.

    October 9, 2008 at 6:59 pm |
  6. Joe W

    Before bailing out anyone (banks, insurance, mortgages, etc), shouldn't there be stronger legal framework to make people responsible and accountable for the money the government is about to give away?

    October 9, 2008 at 6:00 pm |
  7. David V Colvin

    Would the last american left alive , please turn off the lights...

    October 9, 2008 at 5:30 pm |
  8. Craig Plank, Wichita, KS

    I just wish Suze Orman and other self-described "experts" would shut their traps! Ms. Orman and others of her ilk reap vast sums of money dispensing this fear. Sure this is serious but it's not the end of the world.

    October 9, 2008 at 4:48 pm |
  9. Mina, Reston VA

    Well, Suze, let me be the first one to say, you know what you are talking about. Looking at the Dow today, falling over 600 points in the 8000s, I think you called it couple of weeks ago, saying that you wouldn't be surprised to see Dow in the 8000. There it is!

    I live in Northern VA. We are pretty recession proof. I haven't changed my spending habits, but I've been financially responsible, no credit card debt, max out my 401K, have IRA setup, and save about 15%/month (aside from my retirement), I also have at least 6 months of living expenses saved in cash. However, I'm scared. I'm scared for the others. How can we not panic? Like your segment last night, I think we could all use some Klonopin!

    October 9, 2008 at 4:02 pm |
  10. Bru

    I think we ought to closely look at voting Suze Orman for President. None (NONE) of the candidates have stepped up courageously as she has on this major financial crisis (facing all of us and our country) as she has with truth, facts, possible solutions, realistic goals, a 'let's buckle our seat belts it is going to be a bumpy ride' let's get to work message.

    It is shameful what these few greedy, power hungry men in a few years time were able to wipe out what honest, hardworking Americans have built up for over a couple hundred years. Our founding fathers would be just ashamed of the turnout of this debacle on this great country. From a few great men who created the Declaration of Independence and Bill of Rights and the rise of people with strength to these infamous few who have brought our country to this new low for their self serving – righteous, entitlement attitude.
    Where were our government officials and our media all these years; being spun war stories, out being fattened or sidelined by the grease of the lobbyists...nobody is taking accountability – so cowardly, just playing the blame game and doing more spin. We've been so easily distracted & have concentrated on who's at rehab, had extramarital affairs, made racist comments, who were unpatriotic, who only spoke but did not stand up to or for issues just a small voice of 'present'. Where's the thunder? Where's our leaders?

    October 9, 2008 at 4:02 pm |
  11. Brett Harwell

    Before it's all over, the DOW will reach a low of 3,640.

    October 9, 2008 at 3:26 pm |
  12. Sam from Dickerson Run, Pa.

    Personally I am not panicky. I am leaving my money in the 401k and when the markets explode upward I stand to make a lot of money. If the market collapses then everybody loses no matter where their money is (even cash) because money will be worthless in a bankrupt economy.

    October 9, 2008 at 3:11 pm |
  13. paul franks

    MAYBE the panic is caused by the MEDIA's craze for putting the fear is everyone, if you look back at the real numbers of past market drops we have not even seen what has happened in the past. The Media people need to reassure the AMERICAN PEOPLE THAT WE HAVE BEEN HERE BEFORE and if they cared they would give the true numbers. NED Davis research has some good numbers

    October 9, 2008 at 3:09 pm |
  14. Michelina

    If W could find a backbone, even for just a brief moment, he should immediately fire Paulson and hire Suze. We'd be fine in 6 months, tops.

    October 9, 2008 at 3:04 pm |
  15. brenda moskowitz

    I have all of my money invested in NY muni bond funds...tax free. In the last 30 days i have lost 33% of my principal. This money is my retirement money as I am 52. I hear how stocks will come back but what about bonds? What does it take other than interest rates going down, which they did to 5.91% and I stil lost money? Should I wait it out or cut my losses and re invest and in what!

    Please help, everyday is costing me thousands!

    October 9, 2008 at 3:02 pm |
  16. Judith Nachshin

    Since there is a financial crisis and ultimately a credit crunch through only partially the fault of the American people, how about a FICA Score reset. Give all Americans a chance to re-group their credit score. Re-set all American's FICA score to the top. Like a "Second chance". The same "Second chance" we are giving to the Financial Institutions. This way, it's not only the Financial Service Industry getting a "Bail Out" but the American People too. It provides immediate relief, it's great public relations and great politics. A Win- Win.

    October 9, 2008 at 2:38 pm |
  17. Mary Schaper

    Unemployment/Stimulus package #1
    I think a point is being missed with the Unemployment Rate going down marginally. Let's keep in mind that the Stimulus package that extended unemployment benefits is coming to an end. This means that one has received unemployment, received the Stim #1 package, and still no job, now what? To the good side, I am learning how to cook simple meals and Macdonalds has become a wonderful meal out! mary/minnesota

    October 9, 2008 at 1:56 pm |
  18. Mike from SF-Bay Area

    A Bailout alternative:

    1. Mortgage lenders to identify "troubled mortgages"
    2. A new APR to be calculated based on a fair formula for the duration of the loan, taking into consideration spikes (for example: Prime Rate, or an average of the teaser rate and the current outrageous rate)
    3. The new APR should result in backing out all fees, interest, negative amortization...from the principal
    4. Government to buy the loan, lender to write-off the loss (if not in possession of the asset)
    5. Government to refinance the loan (at a fair value)
    6. Local government to reassess the home value and calculate the new property tax rate. In order to keep them honest, local government to pay the difference between the assessed value and the actual selling price (in case the asset is sold)
    7. Until this process is finished, local government should accept partial payment. And only add penalties/fee on the portion of the property tax that has not been paid

    Lenders get money right away while getting rid of bad assets, homeowners keep their homes, local governments get their property taxes faster.

    Regards,
    Mike Nejad

    October 9, 2008 at 1:51 pm |
  19. Lilibeth

    Thanks, Suze, as always, for sharing your expertise!

    October 9, 2008 at 1:26 pm |
  20. Linda Panich

    During the 10am news update today the subject of credit card use "Living within ones' means" was briefly discussed. A reference made by CNN's commentator eluded to the penalties we the prudent consumer face when canceling or closing zero balance accounts.
    What can we do to STOP our credit scores from being down graded when we voluntarily close these excess accounts?

    October 9, 2008 at 1:22 pm |
  21. Cindy

    IMO I think Suze is going a bit to far with her assessment. The way she talks she is going to have people out there scared to death and doing ridiculous things. Thank God Ali was on and told the truth as he sees it.

    Cindy...Ga.

    October 9, 2008 at 1:21 pm |
  22. jim

    I think this whole mess is nothing but a enormous Enron. Crooked CEO's with thier hands in Washington's pockets. Lots of cooked books with no oversight. Government regulates everything we do, what happened on Wall Street? Clean up Wall Street and Congress, then with new blood, things might change. It's election time, no incumbents should get a vote. Every American should question those running for office, to be sure they are not in the the same country club as the CEO's.

    October 9, 2008 at 1:12 pm |
  23. Jona Rohrs

    One of my major concerns is health insurance. Unfortunately, I was laid off twice this year once in February and the other in September. After my first lay off, our family was able to get on my husbands medical insurance plan but due to the lack luster economy my husbands company had to drop medical insurance coverage thus one of our options was COBRA. Did I mention my husbands pay was cut by 20% due to the economic woes.

    In my humble opinion, COBRA offered by employers is completely mind-boggling. My last employer offered family COBRA coverage at the cost of $1184 per month. My unemployment check per week, with taxes taken out, is $328. Anyone can do the math here folks. COBRA takes over 90% of my income. Should I pay my high gasoline bill or high heating bill or high electric bill or COBRA? Should I eat or worry about paying COBRA? Now do you understand why families go without health insurance?

    So my question to the policitians is how can the government help with COBRA payments? How does anyone expect families to pay for this? It's just mind boggling. Someone somewhere needs to combat this problem.

    Now with this a said, I did find health insurance through an insurance company. The underwriter is Anthem. My premium for my husband, daughter and myself is $354 per month with a $6000 family deductiable. Hopefully no one in my family will have to go into the hospital because the $6000 deductible will need to come from my 401K of which is losing tons of money every minute.

    Thank you AC. I watch you almost everynight and enjoy your program.

    October 9, 2008 at 12:55 pm |
  24. Jim

    The problem is the Patient has terminal cancer & it was not caught early- it has spead throughout the entire body-all you can do is keep the pain down while the patient dies.

    October 9, 2008 at 12:39 pm |
  25. Joyce Raglin

    I have a 403b under the investment plan should I change to a savings only?

    October 9, 2008 at 12:21 pm |