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chitown · 15-09-2007, 10:21 PM

Sufficiency Economy Sufficiency Economy Sufficiency Economy Sufficiency Economy Sufficiency Economy Sufficiency Economy Sufficiency Economy

Thats the answer......

Milkman · 26-09-2007, 05:29 PM

Lot's of discussion about wages, housing and general cost of living.

Here's an article about the rising cost of car ownership and how many are overspending on cars and relying on high debt and long-term loans just to drive.

Quote:

If you're constantly broke and can't figure out why, the answer may be sitting in your driveway.
Americans are spending more on their vehicles than ever before -- more than $8,000 a year on average -- and it's driving some to the breaking point.

Credit counselor Bill Thompson of Jacksonville, Fla., estimates that one out of every four clients his agency sees has overspent -- sometimes dramatically -- on a car.
"They may be spending 15% to 20% of their (take-home) pay on just the car payment," said Thompson, who supervises credit counseling for the nonprofit Family Foundations, "and that doesn't include insurance, gas, maintenance and all the other costs of owning a vehicle.

And sometimes there's more than one whopping payment. Sandra McGeary, a counselor at Consumer Credit Counseling Services of Western Pennsylvania, says she regularly sees middle-class families struggling with two payments in the $400 to $500 range. The burdens are so big that it doesn't take a major disaster, like a job loss, to send them over the edge.
"This fall they started coming in saying, 'We were doing so well. We don't know what happened,' " McGeary said. "I'll ask, 'Where did you cut back in your budget when gas prices went up?' and they'll usually say, 'What budget?' . . . A lot of times they don't know how much they can really afford, and they didn't cut back elsewhere" when their transportation expenses rose.

Once they've bought, they're stuck.

Once you've committed to a car payment, though, your options are few, particularly if your loan is greater than the car's value. Whether you drive it or not, you've got to make the payments, and you've got to insure it.

We're prolonging the agony

The signs of vehicular overspending are everywhere:

Average transportation spending grew more than 12% between 1999 and 2005, according to the U.S. Bureau of Labor Statistics, at a time when median income growth was basically flat. Even when adjusted for inflation, we're spending more: 8.3% more in 2005 than in 1995, with people in the lowest and highest income brackets accelerating their spending the most. <LI style="PADDING-RIGHT: 0in; MARGIN-TOP: 0in; PADDING-LEFT: 0in; FONT-SIZE: 10pt; MARGIN-BOTTOM: 12pt">More than 80% of car loans are for terms longer than four years (which, a couple of decades ago, was considered a long loan). The average loan term has grown from just under four years and seven months in 1990 to over five years and four months in 2006. Longer loan terms mean that people build equity in their car more slowly, which in turn means that borrowers will be "upside down" on their vehicles -- owing more than they're worth -- for three years or more on the typical purchase. <LI style="PADDING-RIGHT: 0in; MARGIN-TOP: 0in; PADDING-LEFT: 0in; FONT-SIZE: 10pt; MARGIN-BOTTOM: 12pt">One out of four -- 25.6% -- of cars that are financed include debt rolled over from a previous vehicle, according to vehicle research site Edmunds.com. By the end of last year, the average amount of negative equity in these deals was more than $4,000.
Rolling debt from one car to another is, in case you didn't know, a terrible idea. You'll pay higher interest rates because so much of what you owe isn't secured by the car itself.

And being "upside down" can really leave you up a creek if the car is totaled or stolen. You can protect yourself somewhat with so-called gap insurance, which covers the difference between what you owe and what you get from your insurer, but that's another hit on your wallet.

Entire: The real reason you're broke - MSN Money

Milkman · 01-10-2007, 09:12 PM

This article focuses on a dental student and a law student, but the costs have increased 100% for everybody. Even State Unies. The U.S. government's solution: raise the lending cap. Just let them borrow more money. When the ceiling in reached, these students can borrow from privates institutions. Once a person gets into that much debt as such a young age, they'll never get out of it.

Quote:

Tuition zooms; so do fears over student loans

By Marcy Gordon
The Associated Press

BOB CHILD / AP
Dentist Paul-Henry Zottola, in Rocky Hill, Conn., is paying $1,600 a month on a student loan as well as the payments on his mortgage and a loan he took out to start his practice.

The near-doubling in the cost of a college degree the past decade has produced an explosion in high-priced student loans that could haunt the U.S. economy for years.

While scholarships, grant money and government-backed student loans — whose interest rates are capped — have eased the burden for some, many families and individual students have turned to private loans, which carry fees and interest rates that are often variable and up to 20 percent.
More people in the next generation of workers will be so debt-burdened they will have to delay home purchases, limit vacations, even eat out less to pay loans off on time.

Kristin Cole, 30, who graduated from Michigan State University's law school and lives in Grand Rapids, Mich., owes $150,000 in private and government-backed student loans. Her monthly payment of $660, which consumes a quarter of her take-home pay, will jump to $800 in a year or so, confronting her with stark financial choices.

"I could never buy a house. I can't travel; I can't do anything," said Cole, a legal-aid worker. "I feel like a prisoner."

Parents are still the primary source of money for many students, but the dynamics were radically altered in recent years as tuition costs soared and sources of readily available and more costly private financing made higher education seemingly available to anyone willing to sign a loan application.
Students with no credit history and no relatives to co-sign loans (or co-signing parents with tarnished credit) were willing to bet that high-priced loans were a trade-off for a shot at the American dream. But high-paying jobs are proving elusive for many graduates.

"This is literally a new form of indenture ... something that every American parent should be scared of," said Barmak Nassirian, associate executive director of the American Association of Collegiate Registrars and Admissions Officers.

Entire: Business & Technology | Tuition zooms; so do fears over student loans | Seattle Times Newspaper

Milkman · 15-10-2007, 01:30 PM

Nobody really knows what, if anything, will happen with the American financial markets. Here is a snippet from an article about "Black Monday" which happened on October 19, 1987. The U.S. financials dropped 23% in one day. I still believe in the regression (ROM) in general however. Some similarities of conditions in 87 and today. At the bottom there is a link to this chart and the entire article.

Chart not working. Oops.

See link if you care. Apologies:

Could the Crash of '87 happen again? - Eye on the Economy - MSNBC.com

raycarey · 16-10-2007, 09:08 PM

this should probably be in the 'funny pics' thread, but it isn't a cartoon or a photoshopped image.....it's genuine.

looks like everyone's having a good laugh.

http://www.nytimes.com/2007/10/16/wa...on/16bush.html

raycarey · 16-10-2007, 11:47 PM

earl took the time to give me a red for the above post, but didn't respond to it here on the thread.

why's that earl?

and while i have your attention, what are your thoughts on bush standing in front of sign that says 'fiscal responsibility'?

Milkman · 17-10-2007, 02:11 PM

Treasury Secretary issues a warning.

Paulson warns of damage to come

By Ben White in New York and Eoin Callan in Washington
Published: October 16 2007 19:32 | Last updated: October 17 2007 00:43

Hank Paulson, the US Treasury Secretary, warned on Tuesday that the downturn in the nation’s mortgage market would burden the economy “for some time” as several big banks, the largest homebuilder and a major construction equipment maker all highlighted the growing impact of the housing decline.

Mr Paulson’s grim remarks came as James Owens, CEO of Caterpillar, the equipment maker, called the current housing decline the worst since the second world war. DR Horton, the largest US homebuilder, said nearly half its orders were cancelled in the last quarter.

Taken together with discouraging bank earnings, the housing news helped push stocks lower and bond prices higher as investors worried about the possibility of a US economic slowdown.[/quote]

Entire: FT.com / World - Paulson warns of damage to come

Milkman · 06-11-2007, 10:46 AM

This may be an exaggeration, but U.S. Auto-Loan dilinquincies were at a record high recently. subprime, Alt-A + auto loand + almost $1 trillion in credit card debt, higher gas prices eating into consumer spending to pay bills and feed 70% of the economy.

This may be a recipe for the perfect financial storm. We'll have to wait and see.

Quote:

The $915B bomb in consumers' wallets

Americans have record credit-card debt and banks are starting to sweat an uptick in default rates, reports Fortune's Peter Gumbel. Why some fear this could be the next subprime.

By Peter Gumbel, Fortune
October 30 2007: 1:15 PM EDT

(Fortune Magazine) -- This past summer's subprime meltdown involved about $900 billion in now-suspect securitized debt, reckless lending, and consumers who buckled under the weight of loans they couldn't afford. Now another link in the consumer debt chain - credit cards - is starting to show signs of strain. And the fear that the $915 billion in U.S. credit card debt (an uncannily similar figure) may blow up has major financial institutions like Citigroup, American Express, and Bank of America strapping on their Kevlar vests.
Last month, as banks reported their worst quarterly results since 2001, concerns about rising credit card delinquencies began to make their way onto earnings announcements alongside mentions of subprime woes

First Citigroup (Charts, Fortune 500), reporting a 57% decline in earnings, cited higher consumer credit costs and said it would put aside $2.24 billion in loan-loss reserves to cover future defaults.

Link: The $915 credit-card bomb in consumers' wallets - Oct. 30, 2007

raycarey · 06-11-2007, 12:02 PM

Quote:

Originally Posted by Milkman

This may be a recipe for the perfect financial storm.

agreed. but didn't you think it would have happened by now? jesus christ, oil is nearly $100/barrel and hundreds of thousands of familes are being thrown out of their houses.

Milkman · 06-11-2007, 01:05 PM

Quote:

Originally Posted by raycarey

Quote:

Originally Posted by Milkman

This may be a recipe for the perfect financial storm.

agreed. but didn't you think it would have happened by now? jesus christ, oil is nearly $100/barrel and hundreds of thousands of familes are being thrown out of their houses.

The final effects of the subprime have not occurred yet. There will be more ARMs re-adjusting upward in 2008. Higher gas prices, if they stay high and/or increase will eat into disposable income that could be used to: 1) pay off consumer debts, and 2) buy things.

I think the next 2 years will be the window of time to see what, if anything, happens.

Jet Gorgon · 06-11-2007, 01:17 PM

It's almost like the junk bond era. Lots of banks and lending institutions are in doo at the mo. Their 3Q earnings crashed and the outlook is doo as well. Nobody will buy their subprime or Alt A debt either. Fed is scared to raise interest rates but inflation is nudging up. High gas prices are hurting lots of industries. I'm hurting coz I live in Canada and I'm paid in US dollars. I want a protest march. Where's Al Sharpton when you need him?

Milkman · 06-11-2007, 01:34 PM

Quote:

Originally Posted by Jet Gorgon

It's almost like the junk bond era. Lots of banks and lending institutions are in doo at the mo. Their 3Q earnings crashed and the outlook is doo as well. Nobody will buy their subprime or Alt A debt either. Fed is scared to raise interest rates but inflation is nudging up. High gas prices are hurting lots of industries.

Yeah, this is happening. I check the gas prices in my hometown on gasbuddy.com.

Quote:

I'm hurting coz I live in Canada and I'm paid in US dollars. I want a protest march.

Jet, I thought you were a Canadian. But your paid in USD, so I presume you're an American working for an American company based in Canada?

Jet Gorgon · 06-11-2007, 01:42 PM

^ Milkman, I lived overseas so long, no Canucks will hire me (no local references, la). 555 So I work online for a NY company. They know my net worth by my work. I am Canadian by birth. About ready to move Stateside tho.

Milkman · 25-01-2008, 03:21 AM

Yep. Things are just rosy.

Quote:

updated 9:44 a.m. PT, Thurs., Jan. 24, 2008

DETROIT - Ford Motor Co. said Thursday it will offer buyout and early retirement packages to 54,000 U.S. hourly workers in an effort to cut more jobs and replace workers with those making a lower wage.

Entire: Ford offering buyouts to all hourly workers - Earnings - MSNBC.com

Milkman · 01-02-2008, 04:19 PM

Allowing people to tap into their 401Ks with a debit card is putting a band-aid on a bullet wound and will exacerbate problems down the road (the future).

Quote:

New Debit Card Borrows Against 401k
Thursday, 31 Jan 2008, 7:17 PM EST Created: Thursday, 31 Jan 2008, 6:48 PM EST

In a move that financial analysts are calling a dangerous gamble, one company is offering a debit card that lets you tap into your 401k savings.

With the threat of a recession looming, many families are looking for ways to get some quick cash to make it through these hard times.

Borrowing against your 401k isn't a new concept, but financial planners say making that money so easily accessible through a debit card greatly increases the potential danger. Money taken out of a 401k now could mean less money left for retirement.

The Reserve Solutions ReservePlus debit card lets employees borrow against their 401k plan by making withdrawals at ATMs, paying interest on the money withdrawn.

Link: MyFox Washington DC | New Debit Card Borrows Against 401k

raycarey · 01-02-2008, 04:44 PM

^ this will be the road to ruin for many.

Milkman · 01-02-2008, 04:59 PM

Quote:

Originally Posted by raycarey

^ this will be the road to ruin for many.

Many Americans used their home equity as an ATM machine with HELOCS.

Now that that, is not an option, just tap into the 401K.

A lot of people are gonna be old and broke.

15-09-2007, 10:21 PM	#541 (permalink)
chitown "The Big Onion" Join Date: May 2007 Location: Bangkok Posts: 4,546	Sufficiency Economy Sufficiency Economy Sufficiency Economy Sufficiency Economy Sufficiency Economy Sufficiency Economy Sufficiency Economy Thats the answer......

15-10-2007, 01:30 PM	#544 (permalink)
Milkman Gone Off Join Date: Dec 2005 Location: shelf Posts: 9,390	Nobody really knows what, if anything, will happen with the American financial markets. Here is a snippet from an article about "Black Monday" which happened on October 19, 1987. The U.S. financials dropped 23% in one day. I still believe in the regression (ROM) in general however. Some similarities of conditions in 87 and today. At the bottom there is a link to this chart and the entire article. Chart not working. Oops. See link if you care. Apologies: Could the Crash of '87 happen again? - Eye on the Economy - MSNBC.com

16-10-2007, 09:08 PM	#545 (permalink)
raycarey texpat's sexual obsession Join Date: Jan 2006 Location: deleting posts in issues Posts: 5,498	this should probably be in the 'funny pics' thread, but it isn't a cartoon or a photoshopped image.....it's genuine. looks like everyone's having a good laugh. http://www.nytimes.com/2007/10/16/wa...on/16bush.html

16-10-2007, 11:47 PM	#546 (permalink)
raycarey texpat's sexual obsession Join Date: Jan 2006 Location: deleting posts in issues Posts: 5,498	earl took the time to give me a red for the above post, but didn't respond to it here on the thread. why's that earl? and while i have your attention, what are your thoughts on bush standing in front of sign that says 'fiscal responsibility'?

17-10-2007, 02:11 PM	#547 (permalink)
Milkman Gone Off Join Date: Dec 2005 Location: shelf Posts: 9,390	Treasury Secretary issues a warning. Paulson warns of damage to come By Ben White in New York and Eoin Callan in Washington Published: October 16 2007 19:32 \| Last updated: October 17 2007 00:43 Hank Paulson, the US Treasury Secretary, warned on Tuesday that the downturn in the nation’s mortgage market would burden the economy “for some time” as several big banks, the largest homebuilder and a major construction equipment maker all highlighted the growing impact of the housing decline. Mr Paulson’s grim remarks came as James Owens, CEO of Caterpillar, the equipment maker, called the current housing decline the worst since the second world war. DR Horton, the largest US homebuilder, said nearly half its orders were cancelled in the last quarter. Taken together with discouraging bank earnings, the housing news helped push stocks lower and bond prices higher as investors worried about the possibility of a US economic slowdown.[/quote] Entire: FT.com / World - Paulson warns of damage to come

06-11-2007, 01:17 PM	#551 (permalink)
Jet Gorgon What the Dormouse Said Last Online: Today 05:03 PM Join Date: Apr 2007 Location: Rabbit Hole Posts: 7,298	It's almost like the junk bond era. Lots of banks and lending institutions are in doo at the mo. Their 3Q earnings crashed and the outlook is doo as well. Nobody will buy their subprime or Alt A debt either. Fed is scared to raise interest rates but inflation is nudging up. High gas prices are hurting lots of industries. I'm hurting coz I live in Canada and I'm paid in US dollars. I want a protest march. Where's Al Sharpton when you need him?

06-11-2007, 01:42 PM	#553 (permalink)
Jet Gorgon What the Dormouse Said Last Online: Today 05:03 PM Join Date: Apr 2007 Location: Rabbit Hole Posts: 7,298	^ Milkman, I lived overseas so long, no Canucks will hire me (no local references, la). 555 So I work online for a NY company. They know my net worth by my work. I am Canadian by birth. About ready to move Stateside tho.

01-02-2008, 04:44 PM	#556 (permalink)
raycarey texpat's sexual obsession Join Date: Jan 2006 Location: deleting posts in issues Posts: 5,498	^ this will be the road to ruin for many.

05-02-2008, 06:58 PM	#558 (permalink)
Milkman Gone Off