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"Economic Dominoes Falling"

 
PACSaDouche
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07/17/2008 11:47 PM
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"Economic Dominoes Falling"
Economic dominoes falling: Hereís five you didnít know about
By the time you get to this article you will have probably heard that the US government will bail out the two largest guarantors of the countryís housing mortgage debt, Fannie Mae and Freddie Mac. It was announced by US Treasury secretary Henry Paulson and Federal Reserve chairman Ben Bernanke. While the media rings the bells of alarm on how the sub-prime crisis only seems to be building into a bigger mess before it gets better other issues are ignored, forgotten or not even realized yet.

By briefly paying attention to the news anyone can see that the consumer price index is out of control, making it a public affair that inflation is rising at a record pace. In June of 2008 the Consumer Price Index surged 1.1 percent. The entire yearís inflation rate is currently at 5 percent which is the highest the U.S. has experienced in 26 years. The soaring costs of food and fuel are adding to the woes of Americans that are already facing a credit crunch due to the sub-prime crisis. But what is hiding on balance sheets, trading floors and in the big bankís boardrooms is a list of problems that could easily spiral out of control beyond the sub-prime crisis.

While everyone understands that the sub-prime crisis was created by passing out loans to unqualified homeowners, most donít think about the fact that commercial businesses received the same treatment. Foreclosures are forming suburban neighborhoods into ghost towns and those neighborhoods are needing less commercial property and services. Anything like office parks, movie theaters, fast food, strip malls, warehouses and parking garages are finding customers are drying up as the 7,000 foreclosures a day add up to more vacant homes. Ultimately this leads to an increase in commercial property defaults, vacancy and a lack of funding for new projects in the commercial property industry. Industry leaders like Bloomberg and Morgan Stanley are reporting drops could be 15 percent in 1 - 2 years in the commercial property industry.

Ignoring a potential crash of the commercial property market, American consumers still have a long list of secrets in their pile of bills and balance sheets. Forbes released information here, that in May 2008 consumer credit rose $7.78 billion to $2.57 trillion in total consumer credit debt. While home equity went belly up, consumers turned to credit cards to fund their lavish purchases which helps drive the U.S. economy. When comparing the number of $2.57 trillion in total consumer credit debt to worldwide economies it can become quite breathtaking and unsettling. The United Kingdomís GDP is less than U.S. consumer credit debt totals and so are the GDPís of Russia, Brazil, Spain, France, Italy and Canada. With Americans hurting and pulling back on paying their bills major credit card companies such as Bank of America, Capital One, Washington Mutual, Citigroup and American Express are bracing themselves for at least a 20 percent explosion in credit card defaults.

With crashes and debt pushing the breaking point of survival in the financial markets and consumerís lives, the government is briskly picking up the pace of bailouts of financial institutions and consumerís debt piles. You can see the bailouts in situations like Bear Stearns, IndyMac Bank and Fannie Mae and Freddie Mac. Other bailouts are happening by sovereign funds like Abu Dhabi which forked over $7.5 billion to keep Citibank afloat. All of the bailouts eventually hurt the consumer. When Americans received their $600 tax rebates they paid for it in the next yearís taxes. Currently total credit in the U.S. has went from 150 percent of GDP to 340 percent. This is putting pressure on the value of the dollar as other investors, countries and funds lose trust in the sustainability of the dollar.

If the shell game could be extended for another 10 years some CEOís, accountants and financial advisers would be thrilled but on November 15th 2007, FAS 157 was made effective for all financial statements for the following fiscal years. The new agreement requires that certain assets held by financial companies, including complex investments linked to mortgages, be marked to market. If thereís no market for those securities ó that is, if buyers simply wonít bite ó the required markdown could theoretically go all the way to zero. What FAS 157 will essentially do is to force insurance companies and financial institutions to reveals their rotten assets that they have been hiding in level three asset categories where there is a requirement to value them. Once the cat is out of the bag that these assets are worthless, breathtaking losses will be reported putting extreme pressures on the entire U.S. economy. What exactly is hiding in level three assets? These are the huge derivative positions, the private equity investments and enormous slices of the mortgage market. Banks donít talk about them. The market doesnít put a price on them.

If the market doesnít put a price on level three assets, who exactly is putting a price on them? Accountants are given the privilege of guessing what the level three assets are worth and using a ďmark to modelĒ pricing method. Big financial institutions like Morgan Stanley, Lehman Brothers, Bear Stearns, Merril Lynch and Goldman Sachs were able to pretend their level three assets were worth a great deal but the new FAS 157 regulations that shell game is all but over. In the 2008 fiscal year losses will have to reported when the level three assets are found to be all but worthless.

All of the potential falling dominoes mentioned have been quantifiable in certain ways and the losses can be predicted even if in the worse light in some way. The worldwide derivative markets are a completely different game in themselves. Derivatives are packaged neatly with sub-prime loans and tons of other financial vehicles at large institutions like Goldman Sachs, USB, J.P. Morgan, Bear Stearns, Citibank and HSBC. If the worldwide derivatives market collapses along with total housing wealth, the stock market, bond markets and the value of the dollar the U.S. economy will undoubtedly flirt with a depression.

Before you believe that the sub-prime recovery is around the corner and the economy is ready to turn around, be sure to remember all of the other pieces of the U.S. and world economies that still remain to be tested. One domino has fallen and continues to crash down taking the next in line with it to a level that many never predicted. Presidential candidates talk as if they have a solution with potential tax rebates like you just received in the mail. By the time you receive your next tax rebate you will probably notice the next domino taking itís fall. Prepare now and ignore the chain reaction as it brings balance and integrity back to the world markets.

[link to businessshrink.biz]
Anonymous Coward
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United States
07/18/2008 12:10 AM
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Re: "Economic Dominoes Falling"
Forbes released information here, that in May 2008 consumer credit rose $7.78 billion to $2.57 trillion in total consumer credit debt. While home equity went belly up, consumers turned to credit cards to fund their lavish purchases which helps drive the U.S. economy. When comparing the number of $2.57 trillion in total consumer credit debt to worldwide economies it can become quite breathtaking and unsettling. The United Kingdomís GDP is less than U.S. consumer credit debt totals and so are the GDPís of Russia, Brazil, Spain, France, Italy and Canada. With Americans hurting and pulling back on paying their bills major credit card companies such as Bank of America, Capital One, Washington Mutual, Citigroup and American Express are bracing themselves for at least a 20 percent explosion in credit card defaults.

If that don't scare the shit out of you, nothing will.

It's a big freakin' leap from 7 billion to 2 trillion, any way you slice it.

What's 20% of 2 trillion?
itdincor

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United States
07/18/2008 04:07 AM
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Re: "Economic Dominoes Falling"
bump
Anonymous Coward
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07/18/2008 04:16 AM
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Re: "Economic Dominoes Falling"
Wow.
bump
another dumbfuck
User ID: 370073
Netherlands
07/18/2008 05:18 AM
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Re: "Economic Dominoes Falling"
consumer credit rose [with] $7.78 billion to $2.57 trillion

If that don't scare the shit out of you, nothing will.

It's a big freakin' leap from 7 billion to 2 trillion, any way you slice it.

 Quoting: Anonymous Coward 469827


credit rose WITH 7 billions
another dumbfuck
User ID: 370073
Netherlands
07/18/2008 05:22 AM
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ANYWAY:

What you are witnessing is the acceleration of a complete systemic breakdown of the US and world financial systems and economies. It is happening right before your eyes. It is in your face.

The Scylla and Charibdis of real estate finance, Fannie Mae and Freddie Mac, which are currently in possession of, or have insured, over 5 trillion dollars worth of mortgages, a good portion of which are nothing but toxic waste, have imploded and will now be nationalized in the most egregious example of moral hazard in the history of the world.

As this socialism for the rich transpires, IndyMac Bank has gone up in smoke. This is the second largest bank failure in US history and the largest such failure in over 23 years.

Adding insult to injury, 10% to 20% of the FDIC's insurance reserves have just gone up in smoke along with IndyMac just as the hundreds, and what may eventually turn out to be thousands, of bank failures that are anticipated get started in earnest.

What does that leave for future failures if only one bank failure wipes out a fifth of the FDIC's reserves?

Next up on the chopping block may be Downey, First Federal, Wachovia and Washington Mutual, which are not small fry by any means.

Mattresses and freezers may soon be the savings vehicles of choice for those who can't afford a home safety vault as Depression Era mentality becomes the psychology du jour.
bankrun
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07/18/2008 06:05 AM
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Re: "Economic Dominoes Falling"
Merrill Lynch has warned that the United States could face a foreign "financing crisis" within months
Anonymous Coward
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07/18/2008 06:12 AM
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Re: "Economic Dominoes Falling"
I keep reading about things like this all the time. in fact i have read them since 1998 but here is the thing.
I am self-employed, have a house, wife and two kids. I earn an average wage. We spend same as everyone else. We have a wonderful life. We enjoy ourselves, eat well and drive two cars (old but good). Never ever in my life have i ever come across any problems financially. Never worried about doom and gloom. I have read these reports and yet in real life i don't come across any problems. So what gives?
I mean really....what gives?
Who are these reports meant for?
Who writes them and where do they get their info from?
Why does it not reflect the man on the street and i am one with a family.
I am not debunking this but i really want to know. There are so manyt of you on this forum posting stuff lie these every single day and yet if i sat with you and went through your life you probebly be wondering the same thing as i do.
For a start you all seem to have access to internet. If it is in your job then at least you have a job. if it is at home then you must be able to afford it.
My question is:
Who does this doom and gloom effect? If its meant to be people like me then i am 50 years old with a family to feed and have never ever had any problems.
If it is about the rich people and their money then how does that effect us? as i said 10 years of reading about it and nothing has happened.
your sensible comments please
WW RAUPP

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07/18/2008 06:30 AM
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Re: "Economic Dominoes Falling"
If that don't scare the shit out of you, nothing will.

It's a big freakin' leap from 7 billion to 2 trillion, any way you slice it.

What's 20% of 2 trillion?
 Quoting: Anonymous Coward 469827


One fifth. 400 billion in other words.
To shape the world is to become immortal
Anonymous Coward
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07/18/2008 06:30 AM
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Re: "Economic Dominoes Falling"
is there no one who can offer some sort of sensible explanation to my questions above?
Anonymous Coward
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07/18/2008 06:48 AM
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Re: "Economic Dominoes Falling"
AC 467252

TRY THIS:

>>> NEXT GREAT DEPRESSION <<<
[link to www.godlikeproductions.com]
Anonymous Coward
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Switzerland
07/18/2008 07:04 AM
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Re: "Economic Dominoes Falling"
I keep reading about things like this all the time. in fact i have read them since 1998 but here is the thing.
I am self-employed, have a house, wife and two kids. I earn an average wage. We spend same as everyone else. We have a wonderful life. We enjoy ourselves, eat well and drive two cars (old but good). Never ever in my life have i ever come across any problems financially. Never worried about doom and gloom. I have read these reports and yet in real life i don't come across any problems. So what gives?
I mean really....what gives?
Who are these reports meant for?
Who writes them and where do they get their info from?
Why does it not reflect the man on the street and i am one with a family.
I am not debunking this but i really want to know. There are so manyt of you on this forum posting stuff lie these every single day and yet if i sat with you and went through your life you probebly be wondering the same thing as i do.
For a start you all seem to have access to internet. If it is in your job then at least you have a job. if it is at home then you must be able to afford it.
My question is:
Who does this doom and gloom effect? If its meant to be people like me then i am 50 years old with a family to feed and have never ever had any problems.
If it is about the rich people and their money then how does that effect us? as i said 10 years of reading about it and nothing has happened.
your sensible comments please
 Quoting: Anonymous Coward 467252


Good for you! Hope you can keep it.

This news are more for people who have interests and ties to global economy. Moreover, also for people who are affected by lay offs and now unemployed and wondering on how they would pay their bills.

You have to read OP's message and you will mentally see what's going on to the other side of where you are. Have you noticed some businesses closing? Families moving out of their homes? Where do you live? From your post, you seem to live a modest life therefore, YOUR ENVIRONMENT is AFFECTED WITH WHAT's GOING ON AROUND you.Unless, you are too blind to see or too lazy to notice the real world you are in.

Who does this gloom and doom effect? Many factors and many people are involved but I suggest you read newspapers for a start before you read GLP as this site will shock you.

Better yet, stay in your island world and just enjoy your remaining life with your family.
Anonymous Coward
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United Kingdom
07/18/2008 07:08 AM
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Re: "Economic Dominoes Falling"
bsflag

I believe that the economy will now start recovering.

Near future doom, will have to be astroids, nukes and wars.
BelgianBoy

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Belgium
07/18/2008 07:45 AM
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Re: "Economic Dominoes Falling"
is there no one who can offer some sort of sensible explanation to my questions above?
 Quoting: Anonymous Coward 467252


Maybe you just did the right things?
If you're deeply in debt then I would worry.

I am selfemployed also and I live with the simple rule:
I don't buy what I can't afford (have the cash for).
I do feel the pinch of higher prices, but save accordingly.

The financial system is on a brink. I DO worry about it's effect in the longer run. Wait till the end of this year.
ShowMe State of Mind

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07/18/2008 08:00 AM
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Re: "Economic Dominoes Falling"
is there no one who can offer some sort of sensible explanation to my questions above?


Maybe you just did the right things?
If you're deeply in debt then I would worry.

I am selfemployed also and I live with the simple rule:
I don't buy what I can't afford (have the cash for).
I do feel the pinch of higher prices, but save accordingly.

The financial system is on a brink. I DO worry about it's effect in the longer run. Wait till the end of this year.
 Quoting: BelgianBoy

Ditto.

I am self-employed, as well, we own a mom and pop ISP and we deal only with businesses. We offer a solution that is cheaper than the telephone companies and lately we have been seeing an upswing in our business. Companies can't afford to keep their expensive telephone service. These companies would have never taken a look at us before, trusting their Internet to a small company, but now it makes financial sense.

I am a single mom. My daughter, mother, younger sister and I, all live together under one household. We own our own home, two cars in the garage and a decent income.

However, if the US economy is not effecting you than you must be on an island somewhere... Gas is $4 a gallon, so is milk and rising. My monthly costco trip averages about $300, for the same items over the last two years, this last month it was $450!

This is my first post on GLP and this is one of the topics that I have recently been following that lead me to this forum.

If the economy is not failing you now, good thing! However, I would keep both eyes wide open and when I went to the market, buy a few extra items...just in case, you owe it to your family.
Great minds discuss ideas; Average minds discuss events; small minds discuss people.~Eleanor Roosevelt

~V~
BriZzNiTcH

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07/18/2008 08:06 AM
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Re: "Economic Dominoes Falling"
I keep reading about things like this all the time. in fact i have read them since 1998 but here is the thing.
I am self-employed, have a house, wife and two kids. I earn an average wage. We spend same as everyone else. We have a wonderful life. We enjoy ourselves, eat well and drive two cars (old but good). Never ever in my life have i ever come across any problems financially. Never worried about doom and gloom. I have read these reports and yet in real life i don't come across any problems. So what gives?
I mean really....what gives?
Who are these reports meant for?
Who writes them and where do they get their info from?
Why does it not reflect the man on the street and i am one with a family.
I am not debunking this but i really want to know. There are so manyt of you on this forum posting stuff lie these every single day and yet if i sat with you and went through your life you probebly be wondering the same thing as i do.
For a start you all seem to have access to internet. If it is in your job then at least you have a job. if it is at home then you must be able to afford it.
My question is:
Who does this doom and gloom effect? If its meant to be people like me then i am 50 years old with a family to feed and have never ever had any problems.
If it is about the rich people and their money then how does that effect us? as i said 10 years of reading about it and nothing has happened.
your sensible comments please
 Quoting: Anonymous Coward 467252


i agree - none of this has really affected me yet. im 27 - make a good wage, and support my entire household of 4. i have noticed the cost of everything going up, and with all this news i have not been spending as much as normal. with gas prices, i try not to drive as much. so my habits do affect the economy, as well as everyone else who is holding back spending. i think we are the lucky ones right now.

that being said, my job depends on the real estate industry and i work for a very small company so i am scared shitless right now. if we closed up shop, i would be totally screwed and probably lose everything we have.

also - think of the majority of people working for $7-$10 an hour. how much longer can they afford to drive to work? with groceries going up - im sure they are making some pretty tough decisions on how their paycheck is spent. probably why the credit card debt is rising so fast. soon, they wont have any credit left, then what?

i think these people are also costing the state more money. my boyfriend applied for medicaid to cover a surgery he had earlier this year. they have 45 days to make a determination by the rules. however, because so many people are applying for foodstamps right now, all those medicaid claims are on hold. there are people as far back as october of last year, STILL waiting for an answer - because they are more worried about the foodstamp claims.

so i think it is affecting many people, we are just lucky that it hasnt hit people like us who are making enough to get by. after this is all said and done, i dont think there will be a middle class like us anymore.
"I'm just like you...just not as cool"


fight my brute! [link to brizznitch.mybrute.com]
Anonymous Coward
User ID: 469439
United States
07/18/2008 09:19 AM
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Re: "Economic Dominoes Falling"
Omega's right again....
Anonymous Coward
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United States
07/18/2008 09:31 AM
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Re: "Economic Dominoes Falling"
he op, nice nick! *snicker*

5a
Anonymous Coward
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07/18/2008 09:31 AM
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Re: "Economic Dominoes Falling"
"For a start you all seem to have access to internet. If it is in your job then at least you have a job. if it is at home then you must be able to afford it.
My question is:
Who does this doom and gloom effect? If its meant to be people like me then i am 50 years old with a family to feed and have never ever had any problems."


First of all, I know quite a few people just like you. They are g'ment employees who live on taxpayer furnished health insurance, they are furnished a car and gasoline. They get fairly regular cost-of-living raises and don't have a clue what the rest of us deal with to survive because they do so damn little for the money they are paid. Are you one of these parasites?

How about telling who you work for?

About internet access, we scramble for what we can get. Public libraries are a good service source. A lot of us go wireless and snag online. Some go over to relatives/friends to use computers. For a lot of people who do real work, it is a joke that workers have online access.
Anonymous Coward
User ID: 387092
United States
07/18/2008 09:44 AM
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Re: "Economic Dominoes Falling"
I feel the exact same way sometimes. I read all of these damning reports and I wonder how it affects the everyday man.

Like many people have already said, all you have to do is pay attention to the world around you, even if it's just in your community.

Recently, the number of houses for sale on my way to work has risen by what I would guess 50%. And guess what? those houses are still for sale and will be for sale for some time. Noone wants to buy them or they cant get a loan because all the banks are so tight assed right now.

It is a trickle UP effect if you want to think of it like that. You obviously lead a comfortable life, and thats great, but the people less fortunate than you are feeling it RIGHT NOW. It will not be long until you are being squeezed yourself, and then the upper middle class and maybe even the insanely rich, but I doubt it.

So anyway, open your eyes and prepare however you can to hedge yourself against this economic monster. Euro's, gold, even extra gas and food.

All of those are investments: gas and food are going up (might as well buy them at a cheaper price), gold and euros have been making steady gains on the dollar for months now and it doesnt look like they will be stopped for a while now. Just some suggestions....
Anonymous Coward
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United States
07/18/2008 09:50 AM
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Re: "Economic Dominoes Falling"
"For a start you all seem to have access to internet. If it is in your job then at least you have a job. if it is at home then you must be able to afford it.
My question is:
Who does this doom and gloom effect? If its meant to be people like me then i am 50 years old with a family to feed and have never ever had any problems."


First of all, I know quite a few people just like you. They are g'ment employees who live on taxpayer furnished health insurance, they are furnished a car and gasoline. They get fairly regular cost-of-living raises and don't have a clue what the rest of us deal with to survive because they do so damn little for the money they are paid. Are you one of these parasites?

How about telling who you work for?

About internet access, we scramble for what we can get. Public libraries are a good service source. A lot of us go wireless and snag online. Some go over to relatives/friends to use computers. For a lot of people who do real work, it is a joke that workers have online access.
 Quoting: Anonymous Coward 467405



And what sir is real work? Would you consider it to be having 2-3 hour meetings over the process of a business procedure? Would it be spending coutless hours designing, coding, debugging of custom application code? Would it be installing and setting up an entire system in another state while not traveling?

I'm pretty certain that I wouldnt be able to work without the internet.... I'm sorry you chose the job where you work outside in the heat with a wrench. I like working on my car too but, I dont damn you for getting to maintenance cars all day do I?

Keep your snide sour grapes comments to yourself.
Anonymous Coward
User ID: 470131
United States
07/18/2008 10:10 AM
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Re: "Economic Dominoes Falling"
I keep reading about things like this all the time. in fact i have read them since 1998 but here is the thing.
I am self-employed, have a house, wife and two kids. I earn an average wage. We spend same as everyone else. We have a wonderful life. We enjoy ourselves, eat well and drive two cars (old but good). Never ever in my life have i ever come across any problems financially. Never worried about doom and gloom. I have read these reports and yet in real life i don't come across any problems. So what gives?
I mean really....what gives?
Who are these reports meant for?
Who writes them and where do they get their info from?
Why does it not reflect the man on the street and i am one with a family.
I am not debunking this but i really want to know. There are so manyt of you on this forum posting stuff lie these every single day and yet if i sat with you and went through your life you probebly be wondering the same thing as i do.
For a start you all seem to have access to internet. If it is in your job then at least you have a job. if it is at home then you must be able to afford it.
My question is:
Who does this doom and gloom effect? If its meant to be people like me then i am 50 years old with a family to feed and have never ever had any problems.
If it is about the rich people and their money then how does that effect us? as i said 10 years of reading about it and nothing has happened.
your sensible comments please
 Quoting: Anonymous Coward 467252
My father spent his entire life worring about the bottom falling out,(he grew up with nothing to eat),he missed the greatest time in the history of the world for the worker.
hiding hiding
Anonymous Coward
User ID: 470164
United States
07/18/2008 10:15 AM
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Re: "Economic Dominoes Falling"
"also - think of the majority of people working for $7-$10 an hour. how much longer can they afford to drive to work? with groceries going up - im sure they are making some pretty tough decisions on how their paycheck is spent. probably why the credit card debt is rising so fast. soon, they wont have any credit left, then what?"


Ah, someone who is thinking about the folks who don't make a living wage any more. At, let's use $10/hr. for a 40 hr. week which comes to about $1,700/mo. before taxes. Out of that comes housing (not cheap), food, gas, utilities, clothing, school supplies, car payments, car repairs, etc. Try holding the line on that little money without digging into credit cards to take up the slack. Tough decisions? You better believe it!

Now think about the retirees living on average Social Security of less than $1,000. They are not much better off. Those with pensions are looking at maybe a 23% decrease in their monthly checks, and it can only get worse from there.

I put myself on a budget a long time ago, taking into consideration inflation and a possible cut in my very small pension, so I can see where I have to make cuts in spending. My head's above the water for now, but when the whole world goes belly up, no one will have 2 nickels to rub together.

There aren't any more rabbits to pull out of hats to keep the corporate scam with its Federal Reserve Board and the FDIC going for much longer. We are living in an illusion.
.
Anonymous Coward
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United States
07/18/2008 10:33 AM
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Re: "Economic Dominoes Falling"
I think that what has kept the economy together so far, is that most Americans have the attention span of a 5-year old. Most of them have no idea of what is going on in the world, and don't care. Most people used to get useful information from the evening news. Remember how the Vietnam war was televised? Now, the evening news is just a series of soundbytes mirroring Yahoo! most emailed news. People don't want to know that their way of life is disintegrating. As long as they still have $$ left on their credit card balance, they'll party on.

Don't forget. The real recession hasn't even started.
BriZzNiTcH

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07/18/2008 11:11 AM
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Re: "Economic Dominoes Falling"
Ah, someone who is thinking about the folks who don't make a living wage any more.
.
 Quoting: Anonymous Coward 470164



yea, im one of those folks and I dont forget what it's like and never will. i was very lucky to land the job I have, and my boss is very generous with our pay. I thank my lucky stars every day and pray we dont end up closing over this mess the country is in. I give back to my community with whatever I can spare, and love to help people who need it. I even donated my car when I bought my new one, instead of selling it. Ill never be a rich greedy bastard!
"I'm just like you...just not as cool"


fight my brute! [link to brizznitch.mybrute.com]
Anonymous Coward
User ID: 470186
United States
07/18/2008 11:40 AM
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Re: "Economic Dominoes Falling"
America has been taken to the slaughter house, industry sent overseas or closed down, admitted debt at the Federal level of about $50 Trillion, with about $5 Trillion of non-govt spending GDP. This has all been done by plan and design.

Just because you can't see the collapse occuring now, in front of your eyes, means nothing. The window dressers are keeping the clothes on the mannequins in the front window, while all the inventory and furnishings of the viable business are removed by creditors or sold off to keep the appearance of vitality; that is our National business enterprise situation in a nutshell.

Businesses leave lots of havoc when they downsize and eventually go bankrupt. Sure, the little guy can pick up some crumbs during a downturn, but how does the LG fare when they get stuck with defaults by customers? How much of your takehome income depends on customers paying you promptly? Are you following the vitality of those you do business with? There are many things in play that are beyond anyones control. How are you set to roll with the punches?

The "cascading effects" scenario is entirely valid. All sectors in the economy are inter-related. Perhaps some have gotten wind of the changes coming and positioned themselves to take advantage? Maybe their "model" even plans for barter? Gotta know who your customers are and be sure what they own that you want to trade for. Kind of sounds like the whole premise TPTB are following in this American Slaughter; they know what they want and are out to take it by manipulation and financial mayhem.

Think there is not financial mayhem? Look at the Auto sector, Banking, Investment Banking & Brokerage operators. Then look at what collapsing realty values will do to taxing entities, and the property owners.

At some point, many of your customers will fold, because their is one ultimate truth in business: YOU CAN'T DO BUSINESS WITH PEOPLE WHO DON'T HAVE ANY MONEY!

How much money do you have?
Just because you are floating your boat this month is not germaine to the question.
How Much Money Do You Have/Posess?
How long can you stay afloat if things turn to shit?
How long can you/will you stay in business if you aren't profitable?

Look at what has been "done" to America, all the offshoring/outsourcing and fact that nothing is really manufactured here any longer. Is this a going concern or a going out of business firesale operation?

I caution anyone who can't see what is happening to take some time and investigate the situation. Survey your surrounding and Look Up! They never look up! Something is very likely about to drop right on your head!
Anonymous Coward
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United States
07/18/2008 11:50 AM
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I keep reading about things like this all the time. in fact i have read them since 1998 but here is the thing.
I am self-employed, have a house, wife and two kids. I earn an average wage. We spend same as everyone else. We have a wonderful life. We enjoy ourselves, eat well and drive two cars (old but good). Never ever in my life have i ever come across any problems financially. Never worried about doom and gloom. I have read these reports and yet in real life i don't come across any problems. So what gives?

How can you in your wildest imagination, think, for one minute this will not effect you?......You're self employed...Great...But soon you will realize that you and your customers are running out of money...because it's a "Food Chain"...as your customer runs out of money so will you.....This will effect you soon enough......Whatever you read in 1998 about the "money" situation is small potatoes..This is your worst nightmare........
rathmussen

User ID: 383866
Canada
07/18/2008 12:27 PM
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Ah, someone who is thinking about the folks who don't make a living wage any more.
.



yea, im one of those folks and I dont forget what it's like and never will. i was very lucky to land the job I have, and my boss is very generous with our pay. I thank my lucky stars every day and pray we dont end up closing over this mess the country is in. I give back to my community with whatever I can spare, and love to help people who need it. I even donated my car when I bought my new one, instead of selling it. Ill never be a rich greedy bastard!
 Quoting: BriZzNiTcH


wow! that's fabulous! I hope we all come out of this era wiser and more benevolent like you.

hf
Anonymous Coward
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07/18/2008 12:29 PM
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My husband and I are not wealthy but in the past we've worked hard and paid our bills. We are just like you.
As of right now we only owe on our house and have even made
double house payments. But we had a side family business that we closed last winter. We owed nothing on it...didn't owe the bank or any of our vendors. So why did we close?
Because we could see our business drying up month after month. Oh sure, we'd have some good sales here and there but we could see this housing debacle get worse and worse and everything with it. We got the heck out while we noticed the herd had not quite caught onto the fact that our country was/is in a sorry state of affairs. Since then, three other downtown businesses have closed -- only they had financial difficulties...they spent money on expensive remodeling the year before and we knew they would eventually pay dearly for this. One man who owns an established store (has had it for over 25 years) was chatting with me after Christmas. I didn't want to ask him
how his business was and then he told me they did "okay"...
I told him he'd probably be all right...and then he said,
"All I can say is thank God for good bankers..." And I was thinking....what the heck...is he taking out loans just to stay afloat??? Those of us in retail see it....people are tapped out for the most part...and the people who were spending money like drunken sailors were charging on their credit cards. I really do see a day when some people will go to use their cards and they will not be authorized to use them. Someone else posted that idea and I could also see that happening. My husband and I were the exception to the rule with our business...some people; if they would have been in our shoes would have tried to stay afloat...but
when you can see this thing snowballing and getting dire...
there was no way...The simple facts are that oil is still way too much and this affects EVERYTHING under the sun. And people in general do not have savings in the bank and they are taking money out of their 401k's...so when tshtf...imagine that everyone loses everything, unless you own gold perhaps. Even responsible people like ourselves will be in a real dilema. I mean, right now we're fine...we take our speedboat out...we have gone on vacations, etc...but sooner or later this house of cards is bound to fall. The biggest thing is coming to terms with it in your mind and being spiritually strong. No, I'd say not everything is right in River City.
Anonymous Coward
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United States
07/18/2008 12:43 PM
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Those of us in retail see it....people are tapped out for the most part...and the people who were spending money like drunken sailors were charging on their credit cards. I really do see a day when some people will go to use their cards and they will not be authorized to use them.

You are so spot on, it's not even funny. My parents are clueless. They recently took money out of their (slowly depleting) 401K to spend on my nephews this summer. The 401K is all they have besides Social Security. I tried to tell them to put some of that money aside in case the stock market bottoms out.....their response was, "the stock market always comes back". I think that is most people's mentality right now. They refuse to see the big picture about how everything in the economy is tied to credit. They will leave the 401K as it dwindles down to nothing because....."the stock market always comes back". People don't realize that the gains we've seen in stock values in the last 7 years are tied to credit, and credit is gone. We one see these numbers again for another 10 years.
383623

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07/18/2008 12:44 PM
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ok somebody who knows the market please explain why this so called rally in the stock markets and the falling price oil doesn't impress me. guess i've been hangin' around here too long. i am a DOOMER of the political and financial order with a little nuke paranoia thrown in.

i am 54, dh is 68, retired but still does a little work. i work part-time and we rent a small house. we have 2 vehicles paid for and don't charge anything, ie i don't own anything like the ones that charge do. i think i represent most of the population. very little savings, the old man getting his insurance from medicare and i with nothing.

i guess what i am trying to say is, whichever the market falls and whatever they charge for gas and home heating oil directly effects me. so why do i mistrust this so-called rally and lower oil prices????what is coming down the pike for me and ppl like me????
Highway to Hell





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