Does Anyone feel like Bailing

[tw]

Originally Posted by Pico and ME

Secure? As in reducing debt?

Absolutely. I was surprised how many don't get this. First pay off the debt with highest interest rates - ie credit card. Pay that off even if at the expense of savings - the lowest interest rate. Then pay off car loans (the next highest interest rate) which a fiscally responsible person does not have anyway.

Some people foolishly refuse to use savings to eliminate high interest rate debt. They don't get it. Money for an emergency is a credit card with no outstanding debt. Money in a savings account at 1% or 2% while the credit card is demanding a 12% interest rate payment? That is a no brainer. Move that 1% saving to eliminate a 12% expense. Do it now. Stop using credit (debit) cards until those balances are zero. Get secure.

This is not an economy to be exposed. If others go bankrupt, then your income or risk gets even worse. Economics does this by many methods – inflation, dropping dollar, corporate downsizing, higher rents and a deadlocked housing market, loss of benefits, or the worst – stagflation.

We also know the more that government does to alleviate this (corporate welfare, tax cuts, increased tariffs, special benefits to domestic industries), then the worse economics takes revenge later.

How bad will it be? Automakers were given $25billion. (GM is only worth $5billion because GM products are so bad and GM has no solution in the innovation pipeline.) Automakers are already going back to government for more money. That means your financial security is at even greater risk.

[Pico and ME]

Ive been working on it since....forever, it seems. I pay out $1000 a month on average to pay off our credit card debt. The good news is that the bulk of it is at 0% interest . I still am putting money away into my savings though and have built up a really nice cushion. If and when G loses his job, I dont want to use credit cards to pay bills, because I wont be able to count on more 0% interest in the future. I'm struggling because we have been hit with major car repairs and a vacation that costs us way more than I wanted. I know I'm not doing this in the most sensible way, but I am working on it.

[smoothmoniker]

Originally Posted by Pico and ME

I'm struggling because we have been hit with ... a vacation that costs us way more than I wanted.

Pico, I don't know you, and have no real knowledge of your circumstances. But the silliness of that sentence there just boggles me.

[Pico and ME]

Oh I know.

It was suppose to be a cheap vacation that my husband decided to do at the last minute...a camping trip at a lake with boating and skiing. I thought we were going to rough it by picnicking and cooking out. Instead we ate out for nearly every lunch and dinner. And we helped pay the gas for the boat, which averaged us a $100 per day. This was my husbands family and I just had to go along with the flow, but I was really irked afterwards. Anyway, it all went on the card. That and nearly $3000 in car repairs. So it seems like Im never getting ahead.

[dar512]

It's one of those things that should go in the rule book they should give you when you get married.

Never take vacation with others or dine out with others when you're trying to save money. You just don't have control of the outcome.

[smoothmoniker]

Originally Posted by dar512

... or dine out with others ...

Oh yes. Absolutely. When my wife and I were first married, I was struggling to make a living as a musician, bringing in like $12k a year while my wife finished her teaching credential and masters degree. Sushi had just become the hot new thing, and all of our friends would go out to "do sushi", order a bunch of food, and then split the tab.

We figured out very quickly that we couldn't afford to do that.

[classicman]

Back on topic -
Greenspan Admits Flaw in Regulation Stance

Greenspan said he was in "a state of shocked disbelief" that his theory about lending institutions was flawed. He believed financial firms would act responsibly on their own to protect their viability and shareholders' interest.

This holds with the greed comments earlier posted by someone here on the cellar - Hmm hey tw, do you remember who that was?

While lawmakers were quick to point out Greenspan's role in inflating the housing bubble, others say there is plenty of blame to go around.

Indeed, the failed mortgage-finance giants Fannie Mae and Freddie Mac were government-supported entities whose main objective was to promote homeownership to low-income and minority Americans. The GSEs were pushed by lawmakers to loosen standards and buy riskier mortgages whose debtors may not have documented their income or provided other evidence that they could afford the home.

Hmm this sounds rather familiar too.

"That's one of the gross misperceptions here," says Rich Yamarone, director of economic research at Argus Research. "You have these lawmakers waving their fingers at [Greenspan], but the they're the ones who adopted all the policies that turned into this. When do we get to turn the tables and wave our fingers at the lawmakers who allowed anybody who wanted to have a home to buy a home -- whether they had a job or income or anything else?"

I believe thats a hat trick for the, as of late, rather unpopular dwellar.

Rep. Ron Paul (R., Texas), a free-market conservative and former presidential contender, goes a step further to say that the existence of a federal bank that sets monetary policy -- rather than the market setting interest rates itself -- is flawed. Paul says the housing bubble was "preventable," but that the Fed and Congress created the financial crisis because they set "artificially low interest rates" while "insisting that subprime mortgages should be made."

"I don't think he offered any solutions and I don't think he admitted that he caused all the trouble," Paul says of Greenspan's testimony. "I think it's more of the same."

"Swish"

Robert Shapiro, chairman of Sonecon and former undersecretary of commerce under President Bill Clinton, says that as Fed chairman, Greenspan undoubtedly knew that the demand for securitized mortgages was "based on a bubble" and that risky assets were being purchased with excessive leverage.

Sets the timeline also previously mentioned.

Greenspan on Thursday took effort to lament the need for stricter regulation, as well as the loss of the subprime mortgage market, which opened the doors of homeownership to citizens otherwise barred from that American dream.

Sounds like the "good & noble intentions that were based upon a poor plan" posted earlier.

[TheMercenary]

Yep, good post classic.

[tw]

Originally Posted by classicman

This holds with the greed comments earlier posted by someone here on the cellar - Hmm hey tw, do you remember who that was?

Who was also calling for lower interest rates, rebate checks, deregulation for people who routinely need most regulation such as stock brokers and equity traders? The White House lawmakers and many members of Congress who are no longer there instead were demanding easier money as if the economy needed fixing.

If reading old quotes, tw called for higher interest rates in and before Nov 2006 as the administration was pushing for lower interest rates to 'stimulate' the economy. Fed’s primary task is inflation - integrity of the money - not to stimulate an economy.

Much of this problem is due to government 'stimulus' even back on 2001. Every year, George Jr is talking about more stimulus - even privatizing social security which to any informed person was total lunacy.

Remember, rather than let airlines fix themselves by suffering economically and therefore eliminating bad management, instead this administration gave the airlines $8billion with no strings attached. Rather than fix the completely defective American steel industry, George Jr put up illegal tariffs. Those tariffs protected the anti-American steel industry and harmed the so productive steel reprocessing industry. Rather than let drug prices in America fall 40% to the same prices all over the world, George Jr pushed through the Medicaid prescription plan that keeps drug prices 40% higher in American AND makes it a crime to buy those exact same drugs from the exact same company in Mexico or Canada. Just another $1trillion over ten years of corporate welfare provided by this administration that is very good at mortgaging massive debts.

In every case, the solution should have been to let recession and market losses force the companies to fix their bad management.

When do we reap what we sow? Now is typically when such money games result in economic revenge. And still to be seen are the losses if we are not the innovators in global warming solutions, stem cell research, pushing space exploration, quantum physics, and a long list of other fundamental new products and markets stifled by our wacko extremists.

classicman could also requote post after post where tw says economics takes revenge years later when government 'fixes' the economy using easy money, tax cuts, rebate checks, and corporate welfare. Warren Buffet was also quoted. The only tax cut is one that also cuts spending. Instead, extremist Republicans (who even angered moderate and more patriotic Republicans) went on a spending spree well beyond what any Democrat ever did. A spree that promotes money games and not product innovation. Economics must now take revenge on us for not seeing through Karl Rove propaganda.

Also find the many posts where tw discusses requiring everyone to replant their lawn every year to stimulate the economy. Just like so many George Jr’s economic stimulus plans. Now we have reaped economics taking revenge.

Requote posts about General Motors who stifled product innovation for decades. Who used money games even with its pension funds in the 1990 rather than face bankruptcy that would have saved GM. Find those posts where the foolish actually praised the Chevy Cobalt and other GM crap. Last year, others were falling for the ‘every five year’ GM spin, "We were making bad cars but now we are making good cars."

GM is still making crap cars as GM was doing (and noted here) even in the early 1990s. As a result, GM is now burning through $1billion per month. GM will not even have a new product model until 2010. How many more $billion months can GM survive without being bankrupt - without fixing their only problem - Rick Waggoner? Government provides $25billion and not demand management change? Economics will have to take even more revenge. But on who?

Let’s see. GM was given $100million to build a hybrid in 1994. A new deal between government and industry where government would help only if industry innovated. Well GM took the money and still has no hybrids 15 years later. When the hybrid was supposed to come to market and did not, when did George Jr punish them accordingly? Oh. We must lavish more money on our most needy industries? Just another example of extremists in action who justify the worst kind of socialism. Economics must take more revenge.

Yes, government in the latest decade did everything it could to even cause houses to be 20% and 40% overpriced. George Jr’s reelection was at risk. We borrowed massively to make houses overpriced. When do those debts come due? Borrowed by playing money games such as massive tax cuts to the rich. Deregulation so that loans could be obtained with NINJA and other "we don't care because we are rich" attitudes. When that did not work, 0% financing. Did anybody notice how 0% financing was just another money game to mortgage the future?

Economics is only taking revenge for America's (and government) economic policies mostly from the last decade. In housing, the most egregious policies were promoted by the George Jr administration including overt stifling SEC regulations and all but encouraging Enron style accounting even in Fannie and Freddie. What was AIG doing just before their crash hit? They were creating another off-balance vehicle. AIG was about to move more debt off their spread sheets - Enron style accounting that is now acceptable with deregulations. The Economist of 18 Sept 2008:

Banks can exploit the regulations’ inevitable blind spots: assets hidden off their balance sheets, or insurance (such as that provided by AIG) which enables them to profit by sliding out of the capital requirements the regulators set. It is no accident that both schemes were at the heart of the crisis.

Why was AIG so carefully writing contracts so as to not be regulated by state insurance commissioners? Under a recently defanged SEC, AIG has about $1trillion contracted but equity now believed to have been only $67billion. A ponzi scheme made possible significantly due to new SEC regulation standards. This company was provided $85billion in government welfare.

From The Economist of 11 Oct 2008:

The trouble is that financial innovation did not occur in a vacuum but in response to incentives created by governments. Many of the new-fangled instruments became popular because they got around financial regulations, such as rules on banks' capital adequacy. Banks created off-balance-sheet vehicles because that allowed them to carry less capital [see above reference to AIG and Enron style accounting]. The market for credit-default swaps enabled them to convert risky assets, which demand a lot of capital, into supposedly safe ones, which do not.

Politicians also played a big part. America's housing market - the source of the greatest excesses - has the government's fingerprints all over it. Long before they were formally taken over, the tow mortgage giants Fannie Mae and Freddie Mac, had an implicit government guarantee. As Charles Calomirisi of Columbia University and Peter Wallison of the American Enterprise Institute have pointed out, one reason why the market for subprime mortgages exploded after 2004 was that these institutions began buying swathes of subprime mortgages because of a political edict to expand the financing of "affordable housing".

History also shows that financial booms tend to occur when money is cheap. And money, particularly in America, was extremely cheap in the past few years. ...

So modern finance should not be indicted in isolation. Its costs and benefits are, at least in part, the result of the incentives to which the money men were responding. But given those distortions, did the new-fangled finance boost economic growth, welfare, and stability?

Critics answer no on all three counts.

Learn from where financial innovation actually works. Venture capitalism funnels money through people who understood the product - come from where the work gets done. Venture capitalism is how productive financing works.

Well economics will take revenge. But economics does not target the offender. Economics takes revenge on the innocent who, for example, ceated this prolem by not speaking out against the wacko extremists who created this mess and actually promoted socialism. No Democrat ever spent money like a drunken sailor - as government has done through the entire 2000 to make the economy look better - to mortgage the future and even completely wipe out every good financial accomplishment by Clinton.

Economics is taking revenge because our right wing extremists all but wanted this meltdown AND are now some of the most egregious socialists - but only for the rich and big corporations.

[classicman]

I have tw on ignore, but I am soooooo tempted to read that post. I think I'll guess instead. I imagine it says all sorts of " i predicted this followed by quoting himself and then a sprinkling of "mental midget" , "wacko extremists" a "George jr." or two and possibly something about emotional posters.... Oh and how the rest of us are stupid and ignorant. How'd I do?

Oh I forgot "vietnam", GM and "mission accomplished." No quote of his is complete without them.

[HungLikeJesus]

classicman, in this post, tw was actually saying nice things about you.

[Shawnee123]

Or maybe he just posted "I hate his posts. His posts suck. He sucks. He always sucks. Whine whine whine."

[glatt]

Actually, I'm impressed by how long tw's post is. Even for him, it's a long post.

[classicman]

Originally Posted by HungLikeJesus

tw was actually saying nice things about you.

HA HA HA HA HA Shit the sky really is falling! HA HA HA HA HA

[TheMercenary]

Part of the Manifesto.