[marvin]

Least we aren't Iceland...

 

[Hi-Finthen]

Quote:

Originally Posted by AlanY /img/forum/go_quote.gif Anyone willing to venture that we'll see the Dow at 8500 by the end of next week?

Yep, the sooner we hit DOW 8,500 (bottom, imo), the sooner the recovery which is due for next spring, if all goes as well as can be expected...

Best hope there is that the recession will not be any longer than that, nor any deeper than 10% unemployment, at best.

 

[breakfastchef]

So. what is the problem for all of your common folks? Your money in the banks is safe and guaranteed by the government. How is the freezing of the crdit markets directly effecting you? If you are a subprime borrower, and you are near default on your loan, you have only you and your lender to blame for the predicament. Not the rest of us.

 

[marvin]

Quote:

Originally Posted by breakfastchef /img/forum/go_quote.gif So. what is the problem for all of your common folks? Your money in the banks is safe and guaranteed by the government. How is the freezing of the crdit markets directly effecting you? If you are a subprime borrower, and you are near default on your loan, you have only you and your lender to blame for the predicament. Not the rest of us.

Because many business owners depend on the continued acquisition of lines of credit to stay in business. Since most of us own or work for a business of some sort, the effects hit home pretty quickly once businesses start failing.

Those lines of credit get harder or more expensive to obtain and, hey, there goes jobs, raises, etc. A few percent increase in the interest rate can drive businesses on the edge into straight into insolvency. Even entities as large as state governments are having credit issues and those employ huge numbers of people.

 

[Uncle Erik]

Quote:

Originally Posted by breakfastchef /img/forum/go_quote.gif So. what is the problem for all of your common folks? Your money in the banks is safe and guaranteed by the government. How is the freezing of the crdit markets directly effecting you? If you are a subprime borrower, and you are near default on your loan, you have only you and your lender to blame for the predicament. Not the rest of us.

I'm not particularly happy about the decline of the Dollar.

What good is $100k in the bank if it only buys you $75k of what it did three years ago?

As for business credit, quite a few employers depend on a line of credit to make payroll. State and local government entities depend on credit to make payroll, too.

 

[Audio-Omega]

How long does it take to get your guaranteed money from a collapsed bank ?

 

[F107plus5]

Quote:

Originally Posted by Seaside /img/forum/go_quote.gif Rich people go richer, while poors can go nowhere. Well... I guess that's how things work.

This may be a bit Off Topic of course; but we were kiddin' around here at home at the Dinner Table a few months ago and I mentioned "my" version of the Pledge of Allegiance to the Flag.

The other day, our oldest Grandson used my version in class when they recited it first thing in the morning. His Teacher said it wasn't right and suggested he not say it again in class.

.....then she slipped him a

.

"My" version, uh; "our" version ends with:

"....with Liberty and Justice for all, who can Afford it."

 

[frozenice]

Quote:

Originally Posted by Seaside Rich people go richer, while poors can go nowhere. Well... I guess that's how things work.

And that is the effect of inflation - everything you own goes up in value. The people that own businesses, stocks and real estate generally do much better in inflationary times and the people who don't have anything the price goes up faster than they can save. The longer this goes on the more those without tend to fall behind and to create the have-mores and the have-nots.

Deflation, on the other hand favours the middle class because the people that have, there worth is going down, down, down and the people that don't own anything, everything becomes cheaper and cheaper and their paycheques goes further and further. Japan went through ( are still going through?) a deflationary period and even though the business crowd is very unhappy the people on the street are taking it in stride.

 

[F107plus5]

Gads; there are a lot of pages here! Maybe this has already been brought up.

Anyway; I wonder how much different things would be today if we had a bunch of "End of WW2 Era Terry Towns(or was it 'Tarry' Town)? You know; like the town that was built right after WW2 to welcome home all the new guys and their new wives right after the war with a nice comfortable, affordable place to start a new life. For those who don't remember; the town was built of very inexpensive mass produced(on site)homes that were bare bones starter homes intended to be affordable real homes that could be traded up from when the family got further along in numbers of babies, and bucks in the bank. They gave next generations of young families a great home to live in while they were moving out from Mom and Dad too.

There were tons of similar subdivisions springing up all over the country at that time. In those days a guy could step outta High School(or the Military)and into a good paying job and be able to buy a new car and a new house and get off to a great start with his first and probably only; new Bride.

I don't know how it is in your neighborhood, but such a thing is outlawed around here as being too low on the tax scale. The local Govt. insists on larger new homes with all the frills to get the tax base up, and they are doing all they can to preclude building anything smaller than about 1200 square feet, with a minimum two car garage. There is nothing new available that a person just starting out can buy.

Of course; with a glut of old homes on the market, the chances of building subdivisions of low cost "Starter Homes" available to recient High School Grads is not only illegal, but financially unfeasible as well.

...then again, in order to save a couple bucks at the Wal-Mart check out counter, all the stuff that used to be made by High School Grads right here in the Manufacturing Sector are no longer being made here anyway, so the grads can't find a job regardless. So what good would it do to make low cost Starter Homes anyway?

 

[Al4x]

Quote:

Originally Posted by frozenice /img/forum/go_quote.gif And that is the effect of inflation - everything you own goes up in value. The people that own businesses, stocks and real estate generally do much better in inflationary times and the people who don't have anything the price goes up faster than they can save. The longer this goes on the more those without tend to fall behind and to create the have-mores and the have-nots. Deflation, on the other hand favours the middle class because the people that have, there worth is going down, down, down and the people that don't own anything, everything becomes cheaper and cheaper and their paycheques goes further and further. Japan went through ( are still going through?) a deflationary period and even though the business crowd is very unhappy the people on the street are taking it in stride.

thanks, i always fnd it slightly difficult to understand finance, its like a living entity with all its organs etc,

that seems quite a good, basic real world effect of who to understand inflation

 

[Seaside]

It was not my intention to say inflation/deflation by my posting though.... it is interesting when you say examples of japan.

I don't think I need to explain what happened in japan because of what. But I was worried when government official said at TV few weeks ago, that US is not going to repeat what japan did... well... that was kinda funny, because US already is doing those kind of things japan did for years.
When we think about it, the reason why this situation happening is little differ b/w two countries, but what's happening itself is not much differ from each other.

Japanese are clever, hard working people, and their economy back then was very strong with no debt. Even those people have to suffer 10 years to see its economy boucing back afther the bubble burst. In the contrary, US is the #1 debtor in the world. In other word, US does not have lot of options, and the situation in US could be even worse than that of japan. It worries me a lot.

 

[bonkon]

I haven't read all the posts, maybe this question have been asked before.

In this time of US economic uncertainty why is the US$ getting stronger against most currencies in the last few weeks? In the last 3 months the $ has gained around 10-20% against the Euro especially in the last 3 weeks.

For US buyers now it is more interesting buying an amp from Rudistor int. in Euro than Rudistor US. in $, that was unthinkable 3 months ago.

 

[frozenice]

Quote:

Originally Posted by Seaside /img/forum/go_quote.gif It was not my intention to say inflation/deflation by my posting though.... it is interesting when you say examples of japan. I don't think I need to explain what happened in japan because of what. But I was worried when government official said at TV few weeks ago, that US is not going to repeat what japan did... well... that was kinda funny, because US already is doing those kind of things japan did for years. When we think about it, the reason why this situation happening is little differ b/w two countries, but what's happening itself is not much differ from each other. Japanese are clever, hard working people, and their economy back then was very strong with no debt. Even those people have to suffer 10 years to see its economy boucing back afther the bubble burst. In the contrary, US is the #1 debtor in the world. In other word, US does not have lot of options, and the situation in US could be even worse than that of japan. It worries me a lot.

Japan may very well have a country with a strong economy and no debt but their conglomerate style companies and banking institutions had a lot of non-performing assets on the books that they have been very slow to get rid of. This inability to come to terms with their mistakes, fix them and then move on has cost them dearly.

Almost all countries that go through a prolonged period of economic boom go through a correction phase - which a common number for the correction phase is 30% of the length of time of the boom phase. My guess (only a guess) is when Japan clears through this economic turmoil they will be rocking for a couple of decades (the autumn phase of the Kondratieff cycle). If I am right Japan is going through the dog days of summer now.

 

[AlanY]

Quote:

Originally Posted by frozenice /img/forum/go_quote.gif Japan may very well have a country with a strong economy and no debt but their conglomerate style companies and banking institutions had a lot of non-performing assets on the books that they have been very slow to get rid of. This inability to come to terms with their mistakes, fix them and then move on has cost them dearly.

And we're repeating exactly the same set of mistakes as Japan.... i) Removing the mark-to-market rule so companies can keep non-performing assets on the books for as long as possible, ii) large credit injections from central banks to prop up the value of assets rather than let them fall to their fair values, and iii) actively trying to resist deflationary forces from working their way through the system.

 

[Konig]

Quote:

Originally Posted by bonkon /img/forum/go_quote.gif I haven't read all the posts, maybe this question have been asked before. In this time of US economic uncertainty why is the US$ getting stronger against most currencies in the last few weeks? In the last 3 months the $ has gained around 10-20% against the Euro especially in the last 3 weeks. For US buyers now it is more interesting buying an amp from Rudistor int. in Euro than Rudistor US. in $, that was unthinkable 3 months ago.

From what I know, since the US credit market is frozen, people who needs USD urgently will have to sell assets or other currencies to get the required funding in USD.

I just do not know if we are gonna go though a depression or hyperinflation...lets see what the administration is gonna do