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smokydevil
Smokydevil  (Level: 163.0 - Posts: 5381)
Mon, 11th Jan '10 1:10 AM

THE ECONOMY

I was interested in discussing the economy a little, it looks pretty bad right now, whatever improvements we've seen. I'm taking a number of economics classes in school and beefing up on the topic whenever I can, but does anybody besides me have a better understanding of our current economic plight than I do?

I've heard economists on the radio and TV saying that recovering from this kind of recession could take ten years, and that we might have to get used to double digit unemployment for awhile.

What do you guys think caused all of this? Anybody have anything to add about the previous or currently proposed efforts of Obama on this matter?

mplaw51
Mplaw51  (Level: 179.5 - Posts: 1582)
Mon, 11th Jan '10 10:55 PM

It seems that there wan't enough regulation of mortgage lending and the selling of the bundles of loans was problematic as well. Many of those loans were not rated high enough to be in those bundles and the core was rotten as a result. Countries were buying these bundles let alone big boys who went belly up. Greenspan seems to be taking a hit also doesn't he for not raising the interest rates a few years back? It's not my area of expertise.

No one thought to save money from the biggest of the big to the guy on the corner. It ended up hurting us all. This is fairly simplistic of course but mortgage lending seems to me to be the root of it. All the companies that have been given a bailout have been overextended....because they spent and didn't save. Where's that rainy day thinking?

Part of me thinks they maybe should have been allowed to fail but then it would have become personal. Someone I know would have been affected. It would no longer be this abstract "thing" that is ailing our country and making things so much more difficult for us all. Both of my sons have been employed on and off throughout it all but that just feels like life to me for some reason. My husband is self employed and no one wants to spend money improving their property, or adding on to their existing house. This is where it's tough. Even folks with money are afraid to spend it. I get that, I don't want to but I do. Thank goodness I have a pretty good job so we're keeping our heads above water. So many people out there are drowning in debt. It's bad news. I count myself lucky that I just have to make some changes to make it work.




oogie54
Oogie54  (Level: 201.6 - Posts: 1120)
Mon, 11th Jan '10 11:48 PM

I also believe the mortgage industry was a major contributor to the fall of this house of cards. On the part of the lenders and investors hoping to profit largely in a short period of time, probably knowing full well that the bubble would burst, but betting they could pass the hot-potato quickly.....and also the people who were accepting a variable interest rate loan they knew they wouldn't be able to pay when it ballooned. Greed and stupidly borrowing what can't be paid were an obviously idiotic combination, and for those of us who used common sense and modest economics stuck in the middle of this sucks the worse. A lot of my friends and family members are out of work and financially strapped although they were not trying to live beyond their means, just victims of the whole fiasco.

mplaw51
Mplaw51  (Level: 179.5 - Posts: 1582)
Tue, 12th Jan '10 6:20 AM

I have to admit, that being stuck in the middle is better than many who appear to be facing ruin. We faced hard times in the early 90's and I kept telling my husband that if he still had his business at the other end, he was coming out on top. Same thing goes here. Instead of being busy 5 days a week and telling people they may have to wait he works one or two days a week. It is what it is. When it snows, he moves that because he has big equipment. Hardest working man I ever met.

We're some of the lucky ones even though we've had to tighten our belts a notch or three. You're right about the greed. I don't think a lesson's been learned though. It seems like the me generation has come back to visit and I'm not talking about the young. I wonder what social ramifications this recession/almost depression we'll see in years to come? I'm in my late 50's so I'm not sure what I'll see play out, but there will be consequences, don't you think?

oogie54
Oogie54  (Level: 201.6 - Posts: 1120)
Tue, 12th Jan '10 10:56 AM

I believe the country can't be what it was anymore, we'll either learn from this as a nation, or continue to slide down the slope. Countries like China have been quietly bargaining for oil reserves and forming corporate alliances with other nations that have weakened the standing of US in the global economy, not a recent development, probably over the last several US pres. terms. No sound economic policies were in place,and it's a bit late to recover the ground we've lost in the world economy. The American people are going to have to unlearn what media and social pundits have fed them about buy-now-pay-later-keep-up-with-the-trend-and life-of-luxury is what you deserve even if you can't afford it. I see a real need for rebuilding small community affiliations and a good neighbor policy where we think about others and not just ourselves.

smokydevil
Smokydevil  (Level: 163.0 - Posts: 5381)
Tue, 12th Jan '10 2:22 PM

Wow, I'm enjoying this conversation.

I'm actually in fairly big trouble because of the economy. My wife can't find work anywhere, and even though I still have my two jobs (while going to school) I don't make enough to cover our bills without her working any longer, and the state is no help to someone like me. My debt is high from a bad first marriage, a marriage where she quietly ran up my credit cards without permission, opening new cards in my name and putting some of those cards in her name and so forth.....sigh. That's what I get for not paying attention I guess. The" we should let people fail so they learn personal responsibility" group don't really take people like me into account, who's not really responsible for his own debt. Though my ex-wife makes court ordered payments on a much reduced "settled" amount, they are so small they really do nothing for me.

We'll keep looking, we've been relying on the help of family to get by.

This generation really is a buy now pay later group, my personal finance book said the recommended rules changed with the advent of credit cards. Accountants like me don't even recommend that people save the three to six months necessary to cover your bills like they used to!

Credit Cards are such a joke. I've been listening to politicians talk about reforming the credit card system...but what has been done? I even heard that Obama was planning or even did do something....but what I don't know.

I don't expect personally expect America to remain the super power it once was either. I feel like we are locked into this overly-materialistic view of things that just doesn't include the old kind of values that certain pockets of the population had that made so much of a difference to our country historically.

smokydevil
Smokydevil  (Level: 163.0 - Posts: 5381)
Tue, 12th Jan '10 4:28 PM

BTW, was that too much info? Lol, we are doing fine, as long as family keeps paying back the money they owe me....I think we'll make it out of this, whatever the economy does. Hope I didn't scare anybody....

oogie54
Oogie54  (Level: 201.6 - Posts: 1120)
Tue, 12th Jan '10 6:12 PM

LOL Not too much, the majority of Americans are affected by this problem. I haven't had a raise in three years,with none coming anytime soon, I drive an eleven year old vehicle which I repair myself, my housing is provided by the company as part of my wage package and the newest piece of furniture I have is a bed that I bought four years ago. I had financed a motorcycle a couple years ago for $125 a month which I'm paying off next month. I would like a new TV and computer to replace the old ones I have,but am just gonna get by for a while. I bought my parents a new washer/dryer set couple months ago, and I just don't want to spend money unnecessarily in case they need my help again. I live very modestly, and always have, I don't like being in debt and living paycheck to paycheck ala the"American Way". Not sayin I got it all figured out, just know what I'm comfortable with, really wish the majority of the nation could think in terms of what is practical and what aint.

mplaw51
Mplaw51  (Level: 179.5 - Posts: 1582)
Tue, 12th Jan '10 10:47 PM

I have to believe there are more people like us. Lots of "regular folks" have done mostly the right things, paid bills on time, saved a little, didn't go too far into debt, etc. That makes the whole economic downfall a bit more difficult to swallow. We're holding our own but can't take any more on than we have. My husband bought a new dump truck 5 years ago and now has only three more payments. That's a major celebration since that's a mortgage payment!! We need that vehicle so he can do work, so I get the "spend money to make it" idea that went along with this purchase. It's the spend money cause I want to thinking that seems to be the problem.

I've taken to shopping at a consignment shop called The Silk Purse. They have great clothes that look new and cost next to nothing. Who knows (or cares) that someone else wore them? I bought a beautiful crystal necklace and earrings there and wore them to my son's wedding last May. I chuckled at the number of compliments I received about the set.

I have a friend whose cousin's life has turned upside down over the economy. She doesn't know to cook or clean. Her husband has never mowed the lawn. How can anyone let the control of their life get away from them like that? Do they understand they've lost control? I get the luxury of paying others to do these tasks, but not knowing how to do them yourself? Wake up!!! They seem proud of their stupidity. I'd like to crack them. These people are almost sadder than those who fall into the federal poverty limit.

I need to rely on myself to keep my life right. I work on that shoulder to shoulder with my husband. I don't put it in his hands to make sure my life works out. I don't mean that in a sexist or feminist manner. My former sister-in-law put her life in my brother-in-law's hands and then divorced him when she didn't like the way her life was turning out. Hello??? Is anyone home? .....sorry I seem to have found myself on a soapbox. Part of this entire economy boondoggle seems like some people have just allowed others to take control. I just have to shake my head. I'll step down now.

And no, Jeremy, it wasn't TMI....

smokydevil
Smokydevil  (Level: 163.0 - Posts: 5381)
Wed, 13th Jan '10 2:34 AM

Well, since we are on topic, what do you guys think of Obama's consideration of taxing banks to help the American public collect on bailout money? I like the following link, short but a little more informative than some:

http://corner.nationalreview.com/post/?q=ZWM3YTc0Yzc0ZTY3M2VhZTFlMDkyYzhjZDQ0ZjNkZTU=

I know that the banks have already payed back the bailout money, but I like the idea. As if the bailout money was the ONLY damage done.....I think they need to repay some of the rest of us who have been out of work and losing income because of them.

smokydevil
Smokydevil  (Level: 163.0 - Posts: 5381)
Wed, 13th Jan '10 3:10 AM

I guess my biggest concern with it is just that the costs would merely be passed on to consumers, and I already have a low opinion of how the banking industry operates as it is.

(For those who missed out on my discussion of the banking industry in Trivial Tangents, I think it only had twelve posts to it or something, here it is:
http://www.sploofus.com/bbs_detail.sp?post=200695&cID=6

But don't feel obligated to read it, I'm just posting for those who have the time to read it or want to.)

mplaw51
Mplaw51  (Level: 179.5 - Posts: 1582)
Wed, 13th Jan '10 6:49 AM

I like the idea also but the pound of flesh that we know they'll feel is their responsibiltiy to pass along to the consumer makes me leery. I deally it should be something that can't be turned over to the consumer but I'm sure that's not legal either.

A young staff member at work had a debit card and kept using it when she had no money. She now owes the bank $1300.00, way more in fees than in actual overdraft. She can't get an account elsewhere (her words) because these banks communicate with each other to prevent this kind of jumping. I shake my head because I have to ask, "didn't you know your balance?" but debit cards are easy to come by and it isn't explained that this hole is dug pretty quickly. God knows when she'll pay that money off, it might as well be $13,000.00

It will be interesting to see what comes of this in Obama's budget. More interesting to see how folks like us just trying to get by may get hammered. That's the rub isn't it?

smokydevil
Smokydevil  (Level: 163.0 - Posts: 5381)
Wed, 13th Jan '10 2:41 PM

So let me get this straight, I could be way off base here, but the bailouts of these large instiutions originally started with TARP and George W. Bush?

I heard on the news that banks that rewarded CEO's with certain bonuses would be taxed more under Obama's plan...not sure if this would make a difference or not. Supposedly the bonuses these CEO's get is upsetting to a large number of people (according to CNN anyways)??? CNN had an article about how these bonuses generally get spent. http://money.cnn.com/2010/01/11/news/economy/bank_bonuses/index.htm?postversion=2010011212

Botox for men?

I don't know if I'm upset by these bonuses or not, I guess what upsets me sometimes about America isn't that there are differences in pay, it's just the DEGREE of the differences in pay, too much wealth concentrated in the hands of a few for me.

I'm with you Maureen, 1300 would be the same as 13,000 for me too.

smokydevil
Smokydevil  (Level: 163.0 - Posts: 5381)
Wed, 13th Jan '10 4:21 PM

Doesn't our personal spending habits though play a role in politics as well? Don't we sometimes feel we can't shoulder further taxes because we don't think we have it to give?

My sociology teacher said the values of thrift and industry were huge in making America into a superpower.....and just watching how my grandmother reuses and saves everything, I can tell she's from a different generation than I am where we throw away everything.


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