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Financial situation...

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Dick2

Well-known Member
I know some of the neighbors are having financial problems, but on the ABC news last night they showed the current conditions.

47% of the population are in this situation. If they lost their jobs today, their available cash would last them 3 weeks. If they cashed in their retirement and savings account, they could be broke in 8 weeks.

No wonder the economy is not recovering very fast.
 
(quoted from post at 09:18:12 01/30/15) I know some of the neighbors are having financial problems, but on the ABC news last night they showed the current conditions.

47% of the population are in this situation. If they lost their jobs today, their available cash would last them 3 weeks. If they cashed in their retirement and savings account, they could be broke in 8 weeks.

No wonder the economy is not recovering very fast.
Click to expand...

No worries....if you fail there is a government program to help you out...
 
The obvious solution to help the economy is to tax more to double unemployment benefits, more free college, and double the minimum wage.

This will eliminate all jobs.

Er, I mean, will eliminate all economic problems.

Paul
 
I have the dubious pleasure of looking into the financial lives of hundreds of people every year. Disgusting in many cases. Most people will not wait and save to get something, they just borrow the money. If something goes wrong, they just stop paying. In one case the fella was hiding his purchases at a relatives house so they could not be repossessed. Back in the "boom" years you could borrow well over the value of your house and most of them did this. That "value", by the way, was inflated by appraisers who knew only too well that if they gave a true value they would lose their contract with the mortgage company. So I had a lot of people coming in here with mortgages that were more than twice the true value of the home. I am not sure there ever was a "boom" because it was supported so heavily by debt. People started losing their jobs and businesses started to close after 9-11. Then the credit came due and houses were being repossessed right and left. Some are still empty and rapidly decaying. And today? They are all chomping at the bit to do it all over again. Not the kind of life that we lead around here.
 
Yes, but they are angling to pay a huge portion of people's health insurance premiums and THOSE have gone up at a scary rate over the last 6-7 years. Seems like everywhere I called was quoting $1000-1500 per month. Kind of hard to be self sufficient when your health insurance alone today is more than the mortgage you paid off 15 years ago. I don't know yet but I have a feeling that these health insurance calculations on tax returns this year are going to make me nauseous. I'm still trying to get it clear in my head but, on the face of it, the insurance companies began raising rates exponentially as soon as it became clear who was in the lead in the presidential race two election back. I suspect in anticipation of government payments which would go unquestioned, unlike if the consumer were paying it themselves. Just wondering what we will all do for insurance if the government can't pay the premiums and the new standard rate is four times as much as we paid before BO took the throne?
 
My president has told us on T.V. that we are starting to come back and employment is comeing back. (L.O.L) He wants to tax the rich, He wants all of use to pay for two years at a collage for those students. He wants use to give out what I think is a free lunch. The rich people I know have made jobs for people like me. I clean up after those who are lazy for some strange reason they just do not know how to clean. I want to save but I got to live off of what I make.
When I do a side job every body pays me very little they say they can go to mexico and get it done cheaper.No body I know really has money.My president is just fooling us.
 
Here is a good example I have this friend who had his own company. He would go out and hlp out people with there land. Levaling it out, working on drainage issues, and so much more. When California homes values crash so did his company it went down to nothing. People who owed him did not pay and he lost his house and his company to the banks. Now all he has his four cars a trailer that he lives in. Two of these autos are in my Back yard. He did not get help from any body but me. The California economy is still trying to come back. He is now working for some body eles an is useing thier equipment.
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Not only have there premiums gone up, but the deductibles have gone out of site & "you can keep your doctor" under external_linkcare-ha ha.
 
That eating out is fine by me,as long as they're eating steak. I guess even burgers for that matter.
 
1. This is not new news.
2. This has nothing to do with the state of the economy.

People who can't/won't save for a rainy day have been around for hundreds of years. Roughly half the working population seems about right, as I seem to remember a similar statistic being presented in some economics class... 20 years ago!
 
I learned something last week I did not know. If you remove one state from the numbers - there are now 200,000 less jobs today then were 6 years ago. When you ad that one state (Texas) back in the US has "created" 1.4 million net jobs since January 2009.

While it doesn't sound terrible you have to remember the population has grown by 10 million Americans in the same time frame.
 
Also there are 10,000 Americans retiring every day
seems like these jobs would be available if the economy is good.It must be that most of these jobs are not being filled or maybe these are counted as jobs 'created'?
 
(quoted from post at 12:35:21 01/30/15) I learned something last week I did not know. If you remove one state from the numbers - there are now 200,000 less jobs today then were 6 years ago. When you ad that one state (Texas) back in the US has "created" 1.4 million net jobs since January 2009.

While it doesn't sound terrible you have to remember the population has grown by 10 million Americans in the same time frame.
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5 million of those "new" Americans you speak of needed a towel to dry themselves off once they got here.

Gene
 
I was able to retire at age 58. What worries me is that the money I put away wont last when inflation causes the price of a loaf of bread to go up to $25 a loaf.

18 trillion in debt is gonna catch up with us one of these days, and the stock market will come tumbling down one of these days.

Gene
 

There's money out there. You're just not looking in the right places. I was watching the Barrett & Jackson custom car auction on the velocity channel. I think the cheapest car sold in the $50,000.00 range. The average seemed to be $80,000.00-$125000.00. I wonder who has that kind of money?
 
Actually those people are not part of the 10 million - that's probably another 2-3 million on top of the 10.
 
(quoted from post at 13:15:12 01/30/15)
There's money out there. You're just not looking in the right places. I was watching the Barrett & Jackson custom car auction on the velocity channel. I think the cheapest car sold in the $50,000.00 range. The average seemed to be $80,000.00-$125000.00. I wonder who has that kind of money?
Click to expand...

Lots of new oil money. Even though prices are down now, many of those folks made plenty in the past few years.
BillL
 
I don't think you have right. It's not that there is money if you look in the right places it's that the gap between the haves and the have-nots is increasing with the haves growing wealthier and the have-nots not gaining at all or loosing slightly.
 
(quoted from post at 17:18:12 01/30/15) I know some of the neighbors are having financial problems, but on the ABC news last night they showed the current conditions.

47% of the population are in this situation. If they lost their jobs today, their available cash would last them 3 weeks. If they cashed in their retirement and savings account, they could be broke in 8 weeks.

No wonder the economy is not recovering very fast.
Click to expand...

I wonder how many of the 47% have smart phones, high speed internet, cable tv, car payments, and credit card debt?
 
(quoted from post at 18:35:54 01/30/15) I don't think you have right. It's not that there is money if you look in the right places it's that the gap between the haves and the have-nots is increasing with the haves growing wealthier and the have-nots not gaining at all or loosing slightly.
Click to expand...

Thats part (most) of the problem though, poor people have poor ways. Give a bum a fist full of cash and watch him make one poor decision after the other with that money. Now do it again with another bum and watch the same thing over and over again. Its a pattern that repeats itself so much so that there is a saying about it.... Poor People Have Poor Ways.

Now if you do the same thing with a wealthy person, you usually wont see the same poor decisions made. Thats why its said if you gather up all the money in the United States and divide it all up and give everybody an equal share, in 100 years the "wealth gap" will be back to what it is now. Right now, its close to 20% of the people owning 80% of the wealth.

Without breaking that endless cycle, the poor will continue to make the same poor mistakes. Now, how do we fix it? There is no solution unless we are willing to have somebody else control a poor persons money and make decisions for them. Who wants that?
 
Today I listened to someone discuss "quantitative easing", the printing, printing, printing of money with no backing. Causes big time inflation eventually, like happened in the late 70's. Anyway, now where the overwhelming bulk of the unbacked money is going, is into the stock market, and that's why we seem to be hitting new records almost daily it seems. Folks, especially folks at the upper scale that are big into stocks are...paper rich, for now. On the lower end, something near 50% of our nation is on welfare in one form or another, even if only food stamps. The folks in the middle, the shrinking Middle Class are getting crushed. One has to ask themselves who is it whom it is that has the Fed printing presses working overtime to churn out backless money at the same time is promising welfare to anyone whom wants it, legal citizen or not, and the same time recently promised to look out for...the Middle Class. It would be comical, but it can't be.

Do like Warren Buffet did to get his start. In the late '70's when my country almost went under, the stock market nearly collapsed, and business after business either collapsed or its value went to nothing, that's where Buffet made his real money. He bought them up, invested when they could be had for nothing or next to nothing, then waited for the economy to turn around, gain value. If you can afford it...

It is, what it is.

Mark
 
Please explain your cause-and-effect rationale. There's no doubt that most Americans don't have enough savings, but why is that responsible for a slow economic recovery?

Actually, the tendency of people to save more of their income in uncertain times was blamed for slowing the recovery back in 2009. The better the economy, the less people save because they aren't worried about losing their jobs.

BTW, unemployment is now at 5.6 percent, the lowest it's been since before the 2008 financial crisis. And it's dropping rapidly. You may not want to accept it, but the economy is improving, and it's improving pretty fast.
 
>Today I listened to someone discuss "quantitative easing", the printing, printing, printing of money with no backing. Causes big time inflation eventually, like happened in the late 70's.

Sounds like you've been listening to Peter Schiff, or one of the other gold bugs. It's best to consider that Pete might have an agenda, considering he's in the business of selling gold-based investments. A few years ago, Schiff was predicting massive inflation and $5000 gold. Didn't happen, but that hasn't stopped him from continuing to make his irrational predictions. And of course a broken clock is right twice a day.

The situation today isn't really comparable to the seventies. I remember interest rates over 10 percent. Today they're nearly zero. QE isn't "printing money". It's a way to effectively lower interest rates further when they're already close to zero. The US Federal Reserve is most likely done with QE; it has done its job to bring down unemployment. If QE was the disaster Schiff claims it to be, Japan and Europe wouldn't be using it now.
 
(quoted from post at 07:37:40 01/31/15) Please explain your cause-and-effect rationale. There's no doubt that most Americans don't have enough savings, but why is that responsible for a slow economic recovery?

Actually, the tendency of people to save more of their income in uncertain times was blamed for slowing the recovery back in 2009. The better the economy, the less people save because they aren't worried about losing their jobs.

BTW, unemployment is now at 5.6 percent, the lowest it's been since before the 2008 financial crisis. And it's dropping rapidly. You may not want to accept it, but the economy is improving, and it's improving pretty fast.
Click to expand...

5.6% U3. 11% U6. Quite a difference. And lets not forget that the current labor force participation rate hovers in the 62% area. I wonder what the numbers would be if we added in all those who have gone from the labor force into the welfare force or underground economy or just live off theft and relatives? If the labor participation rate was at it's peak of 67% as it was in the 90's or up to 2004, the UE numbers would be drastically different.
 
(quoted from post at 07:51:02 01/31/15) >Today I listened to someone discuss "quantitative easing", the printing, printing, printing of money with no backing. Causes big time inflation eventually, like happened in the late 70's.

Sounds like you've been listening to Peter Schiff, or one of the other gold bugs. It's best to consider that Pete might have an agenda, considering he's in the business of selling gold-based investments. A few years ago, Schiff was predicting massive inflation and $5000 gold. Didn't happen, but that hasn't stopped him from continuing to make his irrational predictions. And of course a broken clock is right twice a day.

The situation today isn't really comparable to the seventies. I remember interest rates over 10 percent. Today they're nearly zero. QE isn't "printing money". It's a way to effectively lower interest rates further when they're already close to zero. The US Federal Reserve is most likely done with QE; it has done its job to bring down unemployment. If QE was the disaster Schiff claims it to be, Japan and Europe wouldn't be using it now.
Click to expand...

QE is buying back debt with newly printed money. It's an accounting trick. They are paying off a dollar of debt with 70 cents. Nothing too tricky about that.
 
Wall Street thru the big banks and the US Gov't are getting the money for nearly no interest that the Fed 'creates' out of thin air,in the meantime every Dollar they create lowers the value of the ones that are being held by everyone else.Been to the grocery store lately? You'll see your Dollars are worth less all the time.Wait until the Chinese free floats their money like Switzerland did,it'll have 5X the effect on the US Dollar as Switzerland did on the Euro.
 
(quoted from post at 20:35:54 01/30/15) I don't think you have right. It's not that there is money if you look in the right places it's that the gap between the haves and the have-nots is increasing with the haves growing wealthier and the have-nots not gaining at all or loosing slightly.
Click to expand...

This is true. The media, the progressives and those who have never studied history make a big deal out of it, as though it's unusual. It's not. But it's something to point fingers at and lay blame to. Here's the catch guys- you could take all the money and worth from the top 1% of the richest US citizens- the Buffets, Gates, Waltons, etc- and you could run the country for about 3 weeks. Lets be generous and say it's 3 months just for kicks. Then what? You have $3.5 TRILLION dollars in Federal spending alone. $6.4T in Federal and State spending. Who do you go after once you bankrupted the top 1%? You go after the "new" top 1% and it continues and continues. It might last you a year, maybe 2. By then you're down into the top 25% as the "new" top 1%. Want to guess who that is? That's a lot of us.

The problem with pointing fingers at the "rich" is that on the grand scale a lot of "us" are "the rich". The gov't could go full scale communist, seize everything and we'd still be in the same boat. The guys running the show would "deserve" more because they were running things. Anyone think the Dear leader of North Korea goes to bed hungry and cold? The point is that the "have and have nots" buzz words are a distraction form the actual problem which center around a group of gov'ts spending too much, not acting responsibly in a fiscal sense and using tax dollars as bribes to the sheeple who can't see why their checks keep getting smaller.
 
Bret, I did not say the economy is as good as it could or should be. Only that it has improved significantly since '09. And it's not just a matter of abstract numbers; here in Motown the difference is palpable. Six years ago my co-workers were being laid off left and right. I escorted three of them to the door myself. Today, my same employer is hiring like crazy. Back then, there were upwards of thirty foreclosure notices in the daily newspaper. I just checked today's paper: There was ONE notice. (And that notice was for a million dollar house, hardly evidence that the middle class is suffering from unemployment.)
 
Thing of it is that most people with nothing made poor life decisions. Now that can be because of the way they were raised, becoming a slave to any number of things including drugs, booze and gambling or other factors including job loss. Lot of kids graduating college got sold bill of goods and didn't research career fields before deciding what to study. Or some kid who doesn't have the ability taking a trade course that will always see them as a worker and never the boss.

As far as money management is concerned: They really don't prepare kids for life after high school. Sure math and English are important. But they should be teaching kids how to balance a checking account, money management and budgeting. They should also receive classes dealing with loans and interest rates. Reading simple contracts should be in there too.

But you can't teach common sense. That has to be learned and with some takes years to develop. Look at the people after Katrina. Some of the poorer folks were handed pre paid debit cards for 600 bucks to allow them to buy clothing and other necessities. And them the people being interviewed who got 300 dollar "make overs" with that money then were crying because they needed money for food and clothing. Not saying those people were stupid but they did stupid "feel good" things.

Rick
 
>QE is buying back debt with newly printed money. It's an accounting trick. They are paying off a dollar of debt with 70 cents. Nothing too tricky about that.

If you want to oversimplify the work of the Fed, fine. But the real question is whether or not QE will lead to hyperinflation, as gleefully predicted by Schiff, et. al. To date, there is zero evidence to support that theory.

I'm going to make a prediction for one year from now: Unemployment will be between 4 and 5 percent, inflation will be below 2 percent and Peter Schiff will still be saying hyperinflation is right around the corner, hoping against all odds that his broken clock is right this time.
 
(quoted from post at 10:56:06 01/31/15) >QE is buying back debt with newly printed money. It's an accounting trick. They are paying off a dollar of debt with 70 cents. Nothing too tricky about that.

If you want to oversimplify the work of the Fed, fine. But the real question is whether or not QE will lead to hyperinflation, as gleefully predicted by Schiff, et. al. To date, there is zero evidence to support that theory.

I'm going to make a prediction for one year from now: Unemployment will be between 4 and 5 percent, inflation will be below 2 percent and Peter Schiff will still be saying hyperinflation is right around the corner, hoping against all odds that his broken clock is right this time.
Click to expand...

I was never a gold guy. I know some people are and over 40 years they'll do all right. My concern is more mundane and simple- what happens when the gov't can't get enough? I mean, yeah, they can print more and more money, but what happens when the world market shakes it's head and walks away from the dollar? It's starting already. Oil is our only savior in sight I see and I imagine the D's and R's will want to take as much of that as they can get too.

The problem is w.e are in an unsustainable paradigm.
 
So when will this apocalypse happen, Bret? Howard Ruff was telling us back in '79 that the dollar would soon collapse. This was a time of double-digit inflation, so it at least seemed plausible. Nonetheless, 35 years later we're still waiting for Howie's predictions to come true. I ain't holding my breath another 35 waiting for the Schiffster to be right. I'll be pushing up daisies before that happens, and Wall Street will be under six inches of water from rising sea levels.
 
(quoted from post at 12:32:49 01/30/15)
(quoted from post at 09:18:12 01/30/15) I know some of the neighbors are having financial problems, but on the ABC news last night they showed the current conditions.

47% of the population are in this situation. If they lost their jobs today, their available cash would last them 3 weeks. If they cashed in their retirement and savings account, they could be broke in 8 weeks.

No wonder the economy is not recovering very fast.
Click to expand...

No worries....if you fail there is a government program to help you out...
Click to expand...

Only if you live on Main Street or Wall Street.
 
(quoted from post at 18:42:35 01/31/15) So when will this apocalypse happen, Bret? Howard Ruff was telling us back in '79 that the dollar would soon collapse. This was a time of double-digit inflation, so it at least seemed plausible. Nonetheless, 35 years later we're still waiting for Howie's predictions to come true. I ain't holding my breath another 35 waiting for the Schiffster to be right. I'll be pushing up daisies before that happens, and Wall Street will be under six inches of water from rising sea levels.
Click to expand...

Well Mark if I knew that I'd be paying people to work on my tractors instead of laying in the snow fixing them myself. According to the GOA, it's 12-15 years out. According to other sources it's anywhere from 2-30 - never. Take your pick. The problem is no ever seems to see a problem coming. No one saw the 08 bubble coming, no one anyone would listen to anyway, no one saw the tech bubble collapse coming, no one saw the Great Depression coming. Myself, I still don't understand why the system is up and running. Well, that's not true, I do understand. I just can't comprehend how smoke and mirrors support the system.
 
(quoted from post at 06:41:41 02/01/15)
(quoted from post at 18:42:35 01/31/15) So when will this apocalypse happen, Bret? Howard Ruff was telling us back in '79 that the dollar would soon collapse. This was a time of double-digit inflation, so it at least seemed plausible. Nonetheless, 35 years later we're still waiting for Howie's predictions to come true. I ain't holding my breath another 35 waiting for the Schiffster to be right. I'll be pushing up daisies before that happens, and Wall Street will be under six inches of water from rising sea levels.
Click to expand...

Well Mark if I knew that I'd be paying people to work on my tractors instead of laying in the snow fixing them myself. According to the GOA, it's 12-15 years out. According to other sources it's anywhere from 2-30 - never. Take your pick. The problem is no ever seems to see a problem coming. No one saw the 08 bubble coming, no one anyone would listen to anyway, no one saw the tech bubble collapse coming, no one saw the Great Depression coming. Myself, I still don't understand why the system is up and running. Well, that's not true, I do understand. I just can't comprehend how smoke and mirrors support the system.
Click to expand...

Bret actually there were several people yelling that the O8 bubble was coming, heck they even ran news stories on it. Started seeing news stories on that in 01/02. As long as credit was easy no one cared. Most of the people in the Tech fields knew that the .com bubble was going to burst. My #2 son told me it was going to burst about 2 years before it did. But for the unknowing investor it pay high returns and they never looked at assets. They didn't own anything! They leased office space and furniture and rented computers and servers. When they went belly up not only did the stock value go to zero there was nothing to sell off. Investors got 0 return. But investors saw those high returns and got dollar signs in their eyes!

Rick
 
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