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American Economy: I'm really freaked out. Are you? Help.
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mindmetoo

Joined: 02 Feb 2004

Posted: Wed Mar 19, 2008 7:28 am Post subject:

xingyiman wrote:

The problem with America for 40 years or so is that our banks and other lending institutions have been financing a myth. The Cambodians could live as high on the hog and flaunt wealth like the Americans do IF they were given access to the credit that we have had. How many people really own their Lexus or that big 5 bedroom home? None of them. THe banks all own it and the only reason the average American is enjoying the use of them is that they are making rent/interest payments.

They eventually own it. Credit a tool for expanding the economy. Not many people save up $200,000 before they buy a home. Not many companies finance economic expansion out of saved cash. People are happy to make money by taking a risk on you.

Now if you have evidence the average american's debt exceed his/her net worth, table it.

xingyiman

Joined: 12 Jan 2006

Posted: Wed Mar 19, 2008 7:32 am Post subject:

bacasper wrote:

idonojacs wrote:

But the fact is that if you elect a crooked idiot as President, and then re-elect him over an honest intelligent person, you fully deserve to get what you paid for.

Need I remind you, he wasn't elected?

However bad a president that Bush has been he WAS elected. Al Gore lost the election in every statistical way possible when analyzed after the fact. And the only reason that Al Gore was usurped by the Florida Supreme Court was that he and his campaign were illegally trying to wage a recount in only the Florida counties that would benefit HIM and possibly put him over threshold winning the election. The court had to act in all fairness to the rest of the state. If Al had been allowed to continue then it would have been like saying only the votes from Broward and Dade counties mattered. I agree Bush has been a terrible president but we need to get byond the childish mantra of this election stealing that never happened in the first place. Al had a big negative being shadowed by all the Clinton Scandals and not to mention the very powerful "hate Clinton" constituensy which would have voted for Joseph Stalin should he have ran against the machine. And as for the 2004 election you can thank the Democrats for offering a competely unlectable candidate to run against Bush.

xingyiman

Joined: 12 Jan 2006

Posted: Wed Mar 19, 2008 7:36 am Post subject:

mindmetoo wrote:

xingyiman wrote:

You're right not many people do but not just 20 years ago the average price of a house was about half of what it is now. Have the average wages kept up? Just how long would it take you in a non six figure job to pay off your 200,000 debt? I don't have to table anything, Americans have charged themselves to the hilt. Defaults anyone? argue with those statistics.
And I will add that credit is only a tool for expanding the economy when it is managed responsibly which for the past 10 years of so it hasn't been as evidenced by all the reposessions and housing defaults occuring now.
Americans were not frugally using the credit to build equity but lavishing themselves with vehices and properties that were far beyond their means previously but now attainable due to extended mortgages and loans - lowering the monthly payments so as to make it affordable but inflating he interest paid with the possibility of sudden, accelerated depreciation.

Yes they eventually own it but they own an auto thats not worth a 10th of what they paid in payments and interest and now it's a house that in many cases is not going to be worth half of what they originally bought it for. The problem is exactly what you stated. Companies were TOO happy to extend credit to people who had little or no equity and this is only a reflection of what they were doing in the everall economy as well. There is a whole conundrum of things going on behind the scenes like debt insurance and all that spurned all this on so as to make someone lots of fat cash. Who pays for it all ? We do.

Last edited by xingyiman on Wed Mar 19, 2008 7:59 am; edited 2 times in total

Khenan

Joined: 25 Dec 2007

Posted: Wed Mar 19, 2008 7:56 am Post subject:

mindmetoo wrote:

xingyiman wrote:

Well, I'm certainly not an average american, but I can tell you that my debt - largely student loans, but with a fair amount of CC debt thrown in to make ends meet - is in excess of two years' salary at my current semi-lucrative standard.

I'm not disagreeing with you. I thank Our Lord Jesus Almighty that there are voices of reason in this place. But there are a lot of people in my situation. Granted, I could have avoided this by flipping burgers instead of getting an education, but should we really have to indenture ourselves to the Feds in order to get a decent life for ourselves?

Khenan

Joined: 25 Dec 2007

Posted: Wed Mar 19, 2008 7:57 am Post subject:

xingyiman wrote:

bacasper wrote:

idonojacs wrote:

But the fact is that if you elect a crooked idiot as President, and then re-elect him over an honest intelligent person, you fully deserve to get what you paid for.

Need I remind you, he wasn't elected?

Please. Jeb had the ballots thrown into the ocean, and we all know it.

bacasper

Joined: 26 Mar 2007

Posted: Wed Mar 19, 2008 8:38 am Post subject:

xingyiman wrote:

bacasper wrote:

idonojacs wrote:

But the fact is that if you elect a crooked idiot as President, and then re-elect him over an honest intelligent person, you fully deserve to get what you paid for.

Need I remind you, he wasn't elected?

Well, no.

Why Won�t News Organizations Just Say It? First They Delay the News, Then They Bury It: Gore won

George W. Bush would have lost Florida and therefore the Presidency if there had been a complete statewide recount. This is the apparent result of a review of uncounted ballots in the 2000 Presidential election. The new data, compiled by AP and seven other news organizations, suggests Bush would have won Florida only under a more selective recount of the 4 counties that were the subject of Al Gore�s legal strategy.

But this is not how the major media reported it. Virtually every newspaper in the country said the opposite:� that the recount study showed Bush carried Florida.

This report does not even go into how Jeb Bush hired Choicepoint to compile a list of convicted felons in Florida before the election. Using the severely flawed list, they wrongly prevented 90,000 blacks from voting, 90% of whom were likely to vote Democratic. - bac

MollyBloom

Joined: 21 Jul 2006
Location: James Joyce's pants

Posted: Wed Mar 19, 2008 10:20 am Post subject:

bacasper wrote:

idonojacs wrote:

But the fact is that if you elect a crooked idiot as President, and then re-elect him over an honest intelligent person, you fully deserve to get what you paid for.

Need I remind you, he wasn't elected?

I agree. As my paranoid international posts say, those people at the COFR (Council on Foreign Relations) and Bilderberg elect who they want. Why do you think the media is liberally biased the way it is? Why do you think Ron Paul was not given half the credit in the media and hardly even mentioned some days in the polls? It's because ALL WORLD MEDIA is owned by a certain number of powerful people, and they don't want you knowing anything about him. Ron Paul was THE ONLY CANDIDATE not on the COFR.

What people have to realize is that things that are happening now are part of a very well-oiled machine and have been in the works since the early 1900's. The media have kept us very busy and brainwashed, yes, even myself, and that's why I am scared; when I find out what is really happening, I struggle between not knowing what is really true and pulling away from the life I was taught to live.

Alls I'm saying is, when my boyfriend and I get married, we'll have a bunker all set up with nintendo, fresh water, and hot pockets in the woods.

arjuna

Joined: 31 Mar 2007

Posted: Wed Mar 19, 2008 10:37 am Post subject:

MollyBloom wrote:

Alls I'm saying is, when my boyfriend and I get married, we'll have a bunker all set up with nintendo, fresh water, and hot pockets in the woods.

Hello MollyBloom,

Don't be pesimistic. There are good people with knowledge and ability in all sectors and locations. You see well but not enough to know. But your good will and positivity do make a difference.

Cheers!

mindmetoo

Joined: 02 Feb 2004

Posted: Wed Mar 19, 2008 1:51 pm Post subject:

xingyiman wrote:

You're right not many people do but not just 20 years ago the average price of a house was about half of what it is now[.

So people who went into debt, bought a home, paid the mortgage, have now doubled their money. And bank credit was bad for them how exactly?

Quote:

Have the average wages kept up? Just how long would it take you in a non six figure job to pay off your 200,000 debt?

Most people take a mortgage for 25 years. A home tends to be people's long term equity.

Monthly payment: 25 Years
Interest rate: 5.750%
Loan amount: $ 200,000.00
$ 1,258.21 a month

In America you can write off a lot of interest. So two people working $30K a year jobs net about $3750 after tax. That's doable.

Quote:

I don't have to table anything, Americans have charged themselves to the hilt. Defaults anyone? argue with those statistics.

Which stats?

Quote:

And I will add that credit is only a tool for expanding the economy when it is managed responsibly which for the past 10 years of so it hasn't been as evidenced by all the reposessions and housing defaults occuring now.

Subprime is $100 billion (in a $13 trillion economy). What do you suppose the whole debt market is in the USA? It's a drop in the bucket.

Quote:

Americans were not frugally using the credit to build equity but lavishing themselves with vehices and properties that were far beyond their means previously but now attainable due to extended mortgages and loans - lowering the monthly payments so as to make it affordable but inflating he interest paid with the possibility of sudden, accelerated depreciation.

This is a claim but I'm still waiting to see stats that Americans have borrowed money irresponsibly.

Quote:

Yes they eventually own it but they own an auto thats not worth a 10th of what they paid in payments and interest and now it's a house that in many cases is not going to be worth half of what they originally bought it for.

A car is not an investment. A car is a means of getting to work and earning income, typically. A car allows a wage earner to make more efficient use of his time and earn more money. Homes are an investment for most people, however. But I see no evidence that a home bought today will lose value in the future.

Quote:

The problem is exactly what you stated. Companies were TOO happy to extend credit to people who had little or no equity and this is only a reflection of what they were doing in the everall economy as well.

Yes. People make bad risks. Check out the dot.com days. You might remember a number of years ago Koreans went credit card crazy and they had to introduce the "bad bank" to take care of the bad credit card debt. Korea didn't end. Subprime makes juicy headlines but subprime losses are a drop in the bucket. Look at the yearly revenues of the top banks:

http://money.cnn.com/magazines/fortune/fortune500/snapshots/1561.html

Citigroup has $1 trillion in assets. It wrote off $20 billion in subprime loans. It made $24 billion in profits last year. So this year it breaks even. Hell GM would be as happy to simply break even. I dunno. It's not the end of the world.

xingyiman

Joined: 12 Jan 2006

Posted: Wed Mar 19, 2008 3:38 pm Post subject:

mindmetoo wrote:

So people who went into debt, bought a home, paid the mortgage, have now doubled their money. And bank credit was bad for them how exactly?

Of course there were people who worked the system to their advantage and thoe people were smart in doing so. Bank credit is not bad and that is not what I am saying.

Quote:

Wait a minute.....I thought that making $30,000 a year qualifies someone as a loser, burger flipper, who can only date another fat chick back home who makes $30,000 a year. Correct me if I am wrong but it seems the majority of Dave's posters all left 6 figure jobs to come and work in Korea.

Quote:

Subprime is $100 billion (in a $13 trillion economy). What do you suppose the whole debt market is in the USA? It's a drop in the bucket.

I am not argueing any of the rest of your points because we are not really that far off. All I am saying is that taken with all the other factors in the US economy, such as the wildly swinging stock market, trade deficit, and the fact that the job market has shown no sustained growth in producing anything but low paying service sector jobs in many years - the glory day's of the US economy are over. Now in the short term future it might be a good idea to invest if the rates go low enough but also you have to have money to invest and you aren't going to in a stagnant job market where you are bartending just to pay the rent and that is sadly where many Americans are now. When you don't have the money to subsist and you've got a wallet full of credit cards they'll soon be maxed. My beef really isn't with the credit sector of our economy but with the horrific lack of job development which has been the current administrations fault coupled with the fact that you nearly must use credit as a alternate form of income to survive.
I have friends all over the place with techincal degrees and they can't find any work because the market is saturated by lateral movement between people who already have years of experience taking the otherwise entry level jobs. SO they end up working in call centers and driving trucks because otherwise they'll starve. I own nothing back in America and I am not planning on returning there anytime soon so I have nothing to worry about either way. Can you say the same?

No_hite_pls

Joined: 05 Mar 2007
Location: Don't hate me because I'm right

Posted: Wed Mar 19, 2008 5:46 pm Post subject:

Wow! There are some interesting points being made on this topic especially from Mikeboy122 and Mindmetoo. Mindmetoo I liked your article about the increasing home size, but I have some problems with Americans bragging about their life expectancy because it is still shorter than most other Western countries.

crusher_of_heads

Joined: 23 Feb 2007
Location: kimbop and kimchi for kimberly!!!!

Posted: Wed Mar 19, 2008 5:51 pm Post subject:

bacasper wrote:

idonojacs wrote:

But the fact is that if you elect a crooked idiot as President, and then re-elect him over an honest intelligent person, you fully deserve to get what you paid for.

Need I remind you, he wasn't elected?

He was RE-elected, dumbass.

mindmetoo

Joined: 02 Feb 2004

Posted: Wed Mar 19, 2008 6:51 pm Post subject:

xingyiman wrote:

Wait a minute.....I thought that making $30,000 a year qualifies someone as a loser, burger flipper, who can only date another fat chick back home who makes $30,000 a year.

A couple, each making modest salaries, together have a decent household income and a 200K house is not beyond their means, especially with the tax advantage in the USA. You were wondering who, besides people with 6 figure incomes, could afford to pay off a 200K home.

xingyiman

Joined: 12 Jan 2006

Posted: Wed Mar 19, 2008 7:09 pm Post subject:

mindmetoo wrote:

xingyiman wrote:

Wait a minute.....I thought that making $30,000 a year qualifies someone as a loser, burger flipper, who can only date another fat chick back home who makes $30,000 a year.

Your rates are representative of midwest economic scenarios. I can identify with that as I am from the midwest. That same couple would be just getting by in New York City, Miami, Hawaii, or Los Angeles.
My comment was meant to illustrate that if I came on here bragging about the $30,000 a year job I got back home I would be ridiculed.
I understand everything you are saying and agree with most if it. I am not against credit as you must have it to live back in the states.
From my perspective there are hard times ahead for the country. Will it collapse? Probably not, but it's not a sweet scenario for myself and I would argue lots of people currently residing in this country. I can't go back with enopugh capital to get the kind of house I would want to live in and in a place I would like to live. The places I would like to live would require far more than the $60,000 annully year for my wife and I when you figure in 2 car payments, insurance etcetera. Your situational analysis alothough realistic is modest at best. And can readily be achieved in areas like rural Indiana and SOuthern Missoui. I could do everything that you said AND succeed but in the end I would simply be working a 60 hour week to, once a year enjoy the kinds of recreational opportunities that I have nearly every weekend now. And I have been through the credit mess before and I made it out unscathed. I don't use credit cards anymore and while I don't enjoy some of the more immediate manuverability that cardholders do, I also don't have to worry about making my payments/being evicted and/or getting slapped with a bad credit rating should I lose my job get sick etc.... In my opinion the credit tight rope in America is too risky right now to walk. I have mobility and oportunity that would be a distant dream if I plopped down money on a house in a mundane place to live ($200,000).

xingyiman

Joined: 12 Jan 2006

Posted: Wed Mar 19, 2008 7:17 pm Post subject:

crusher_of_heads wrote:

bacasper wrote:

idonojacs wrote:

But the fact is that if you elect a crooked idiot as President, and then re-elect him over an honest intelligent person, you fully deserve to get what you paid for.

Need I remind you, he wasn't elected?

He was RE-elected, dumbass.

I'm happy you pointed that out crusher. I figured an appeal to logic would result in just another long conspiracy theory.

Say you guys, what happened to all the Black helicopters and jack booted Clinton gestapo thugs? As I recall wern't Clinton/Gore connected to the trilateral bildeburgs.....etc...?

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