The US Economy and Current Financial Crisis

[Guest]

It's actually the 7th in nominal GDP. The US, Japan, Germany, China, UK, France, and Italy would be ahead. Russia, however, would not be.

[Big Ol' Smitty 0]

This conversation made me think of this map I like (I bet Czech will like it too, geography nerd). It shows US states labeled as countries with approximately equally sized economies.

 

[SuperJerk 0]

I don't think you understood the graph.

 

Looking back...okay, you're right, I don't.

[Jobber of the Week 0]

What Moscow does have is a crap-ton of millionaires. More than any other city in the world, judging by some Fortune or other mag study a few months ago.

[MarvinisaLunatic 0]

Quick, someone defend New Jersey's rampant budget problems. Im sure Massachusetts is right up there in terms of paying taxes to the government too.

 

And yes, you were quick to quote my redacted statement about red/blue states (I edited it out to save from having a red/blue state arguement that overshadowed my main point) but that still stands.

 

In the majority of Blue states you will find that the governments of those states refuse to cut bugets even when the revenues they collect decrease, to the point that they have to raise taxes more which only add fuel to the problem. I live in Maryland and Im seeing it firsthand myself with Governor Omalley and his crap that he keeps pulling. Back in 2002 when Erlich took office, he took a 1.8 billion deficit and turned it around in 4 years to a 1 billion surplus, only to have Omalley step in in 2006 and end up with a 1.3 billion budget deficit after his first year, which was used as an excuse to raise the sales tax 20% and to threaten people to vote for Slot Machines (VOTE OR ELSE THERE WILL BE NO MONEY FOR SCHOOLS!!).

[Guest Vitamin X]

Lehman Bros. CEO got knocked the fuck out at the gym just shortly after news of the bankruptcy broke.

 

“From two very senior sources – one incredibly senior source – that he went to the gym after … Lehman was announced as going under. He was on a treadmill with a heart monitor on. Someone was in the corner, pumping iron and he walked over and he knocked him out cold. And frankly after having watched this, I’d have done the same too.”

 

Nice.

[SuperJerk 0]

Quick, someone defend New Jersey's rampant budget problems. Im sure Massachusetts is right up there in terms of paying taxes to the government too.

 

And yes, you were quick to quote my redacted statement about red/blue states (I edited it out to save from having a red/blue state arguement that overshadowed my main point) but that still stands.

 

In the majority of Blue states you will find that the governments of those states refuse to cut bugets even when the revenues they collect decrease, to the point that they have to raise taxes more which only add fuel to the problem. I live in Maryland and Im seeing it firsthand myself with Governor Omalley and his crap that he keeps pulling. Back in 2002 when Erlich took office, he took a 1.8 billion deficit and turned it around in 4 years to a 1 billion surplus, only to have Omalley step in in 2006 and end up with a 1.3 billion budget deficit after his first year, which was used as an excuse to raise the sales tax 20% and to threaten people to vote for Slot Machines (VOTE OR ELSE THERE WILL BE NO MONEY FOR SCHOOLS!!).

Any state government that increases sales taxes deserves to be ridiculed. Sales taxes are the absolutely the most unfair way to raise revenue of any form of taxation.

[Guest Vitamin X]

Yeah, tell me about it!

 

*raises receipts with no sales tax on them thanks to living in Oregon*

[Cheech Tremendous 0]

Yeah, tell me about it!

 

*raises receipts with no sales tax on them thanks to living in Oregon*

 

It's nice not having to pay sales tax, but they rape us homeowners on property taxes.

[At Home 0]

Yeah, tell me about it!

 

*raises receipts with no sales tax on them thanks to living in Oregon*

 

*pouts*

[Jobber of the Week 0]

Having lived in California during a budget crisis or five, I'll say that they do cut things. And spend on things. What they spend on doesn't matter so long as they spend it intelligently.

 

For instance, when Arnold originally ran and promised to cut budgets and taxes, he also supported a measure to subsidize stem cell research on the state level, so that any companies that grow around that research will start in his state.

[NoCalMike 0]

[

 

 

 

California had both Republican and Democratic governors during that time. Mostly Republicans, though. To be fair, the worst hit while Gray Davis (the ONLY Democratic governor from 1983-2003) was in office, though.

 

 

(Just saying.)

 

True, but an argument could also be made that "the worst" was the result of former governor Pete Wilson's mass de-regulation policy. I would consider Gray Davis more of a "do-nothing" govenor. He didn't really do anything to fix or help the situation, but at the same time it wasn't his policies that caused it. He just sat on the ball too long. And also, his recall was a bunch of bullshit. The recall was started about two months after he won re-election by some bitter guy who had aspirations to be governor. He pumped approx 2 million of his own fortune into getting the effort started. I was no fan of Gray Davis, but the recall was lame.

[Guest Vitamin X]

Yeah, tell me about it!

 

*raises receipts with no sales tax on them thanks to living in Oregon*

 

It's nice not having to pay sales tax, but they rape us homeowners on property taxes.

 

I've heard about that, but I most likely will never own a home (at least in the next 10 years) thanks to my outrageous student loan debt, so it won't bother me, at least for now.

 

.. Or I could always move to Vancouver and then do all my shopping in Portland. Tax-free livin'!

[Jobber of the Week 0]

True, but an argument could also be made that "the worst" was the result of former governor Pete Wilson's mass de-regulation policy. I would consider Gray Davis more of a "do-nothing" govenor. He didn't really do anything to fix or help the situation, but at the same time it wasn't his policies that caused it. He just sat on the ball too long. And also, his recall was a bunch of bullshit. The recall was started about two months after he won re-election by some bitter guy who had aspirations to be governor. He pumped approx 2 million of his own fortune into getting the effort started. I was no fan of Gray Davis, but the recall was lame.

Davis lied about the budget, and drifted into re-election because he ran ads against Riordan in the primary and helped a ridiculous Orange County conservative who wanted to outlaw abortions and throw gays in closets get the nomination. The other guy had a family business fiasco haunting him and his only real weapon was to accuse Davis of taking illegal bribes in office a photo that turned out to not be in office at all.

 

Davis raised so much money and Simon blew so much of a fortune on the race that the race was more expensive than the recall. Yet the race also had a record low turnout, more or less reflecting Davis hand-picking his own opponent in all practical terms.

 

The recall was so much more entertaining because practically anyone could run. You not only had Michael Jackson and Gary Coleman on the ballot, but even the serious candidates who made it to the debate were a bunch of clowns. You had several Republicans between Arnold and Issa and McClintock: Arnold the moderate, Issa the guy who actually funded and moved the recall forward in an attempt to further his own career and was one of the first to drop out once it was underway, and McClintock as the crazy social conservative.

 

You had the Lt Gov on the Dems side following the great California tradition of stabbing your boss in the back as you take his place, half-heartedly suggesting people vote no on the recall in addition to voting for him should their no vote fail. He had the uphill battle of trying to sell strategic voting in a soundbyte, and was effectively doomed by Arnold's fame and his own participation in a number of La Raza style organizations that believe California is the rightful property of Mexico.

 

You had the Green guy spouting off all this beyond-socialist shit about how there's no such thing as "illegal immigrants" and Ariana Huffington trying to talk over everyone with colourful analogies.

 

The debate was such a zoo that the moderator suggested he forgot he meds.

[BruiserKC 0]

I pay more and more attention to the economy these days rather than just a passing once-every-3-months glance at my 401K. I just thought it funny as hell that the Dow was only down maybe 40-50 points until Bernake and the Dubya talked and then south it headed. I had a guy I work with, a diehard Republican, say about Bush that if he came out tomorrow and was all about going green and against global warming that the most diehard tree-hugging environment saver would jump ship since they didn't believe them.

 

Over the last few months we've paid off my student loans and my family's mini-van. Only debts I really have right now are the wife's student loans and our house. I'm debating whether to pay the loans off with our next income tax return and just focus on a house payment.

 

I've come to the reality it's going to get worse before it gets better and no matter whether it's McCain or Obama headed in, we're screwed. Bush is just treading water so he can get out of office before the bottom drops out. I'll just do my thing here on the local level. If everyone did that, we could work our way out of this rather than regulate the shit to death.

[MarvinisaLunatic 0]

I increased my contribution rate to my 401k about two weeks ago to 8% which is the max the company I work for will match (50% of, or 4%). Im losing money in the short term, but Im able to buy more shares of the fund Im invested in at the lower price and eventually when it goes back up It'll end up being worth more in the long term.

 

For people that are 30+ years away from retirement like I am they should be doing this as well and not ceasing to fund their 401k.

 

 

 

 

[ZGangsta 0]

I increased my contribution rate to my 401k about two weeks ago to 8% which is the max the company I work for will match (50% of, or 4%). Im losing money in the short term, but Im able to buy more shares of the fund Im invested in at the lower price and eventually when it goes back up It'll end up being worth more in the long term.

 

For people that are 30+ years away from retirement like I am they should be doing this as well and not ceasing to fund their 401k.

Yeah, I'm doing the same thing (well, with an RRSP since I'm in Canada now). While trying to time the market is a futile idea most of the time, if you know you're in a very 'down' period then increasing the monthly contributions works if you can spare the cash. And yeah since I'm probably more than 30 years from retiring there will be many more peaks and valleys in that time.

 

I've been hearing some of my friends' parents talking about how they've lost so much now and are thinking they might have to work more years to save for retirement as a result if things take a long time to turn around.

That is a prospect I wouldn't want to face, having a bunch of money disappear close to retirement, with the possibility that the markets may not recover for 5 (or more) years. I guess the lesson there is that if you're getting near retirement you should be moving most of your investments to areas with limited exposure to the stock market.

[The Niggardly King 0]

Eh, they'll just get to your retirement 20-25 years from now... and then you'll be really screwed.

[Big Ol' Smitty 0]

http://www.telegraph.co.uk/finance/finance...others-gym.html

 

Richard Fuld punched in face in Lehman Brothers gym

 

Richard Fuld, the disgraced head of Lehman Brothers, was punched in the face in the office gym amid the bank's collapse.

 

Mr Fuld, who has been testifying on the financial crisis before the US House Oversight Committee, was attacked on a Sunday shortly after it was announced that the banking giant was bankrupt.

 

Following rumours that the incident had occurred, Vicki Ward, a US journalist, said "two very senior sources - one incredibly senior source" had confirmed it to her. "He went to the gym after ... Lehman was announced as going under," she told CNBC. "He was on a treadmill with a heart monitor on. Someone was in the corner, pumping iron and he walked over and he knocked him out cold.

 

"And frankly after having watched [Mr Fuld's testimony to the committee], I'd have done the same too."

 

...

[Guest Vitamin X]

I just posted that like ten posts ago, on this same page!

[Big Ol' Smitty 0]

Sorry!

[Guest Tzar Lysergic]

It's still awesome. All of these crooks should have the shit kicked out of them, publicly.

[MarvinisaLunatic 0]

Eh, they'll just get to your retirement 20-25 years from now... and then you'll be really screwed.

 

Just today the democrats (I dont know who specifically, look it up) put up a bill that would take away the #1 reason most people put money into 401ks, the fact that its a pretax contribution. No more of that, now that your 401k is worthless, they're gonna tax it so its worth even less.

[Guest Vitamin X]

[Edwin MacPhisto 0]

Thousands of dollars! No longer there! Oh well. At least I'm diversified!

 

Eh, they'll just get to your retirement 20-25 years from now... and then you'll be really screwed.

 

Just today the democrats (I dont know who specifically, look it up) put up a bill that would take away the #1 reason most people put money into 401ks, the fact that its a pretax contribution. No more of that, now that your 401k is worthless, they're gonna tax it so its worth even less.

I've been looking for 5 minutes and can't find anything on this, Marv. Whaddaya got?

[At Home 0]

Just put up the latest GB podcast.

 

 

The Hang Seng dropped almost 1300 points.

[MarvinisaLunatic 0]

Thousands of dollars! No longer there! Oh well. At least I'm diversified!

 

Eh, they'll just get to your retirement 20-25 years from now... and then you'll be really screwed.

 

Just today the democrats (I dont know who specifically, look it up) put up a bill that would take away the #1 reason most people put money into 401ks, the fact that its a pretax contribution. No more of that, now that your 401k is worthless, they're gonna tax it so its worth even less.

I've been looking for 5 minutes and can't find anything on this, Marv. Whaddaya got?

 

linky link

 

A wide range of sweeping changes to the 401(k) system were proposed Tuesday at a hearing on how the market crisis has devastated retirement savings plans.Chief among them was eliminating $80 billion in tax savings for higher-income people enrolled in 401(k) retirement savings plans.

 

This was suggested by the chairman of the House Committee on Education and Labor.

 

“With respect to the 401(k), it appears to be a plan that is not really well-devised for the changes in the market,” Rep. George Miller, D-Calif., said.

 

“We’ve invested $80 billion into subsidizing this activity,” he said, referring to tax breaks allowed for 401(k) contributions and savings.

 

With savings rates going down, “what do we have to start to think about in Congress of whether or not we want to continue and invest that $80 billion for a policy that is not generating what we … say it should?” Mr. Miller said.

 

Congress should let workers trade their 401(k) assets for guaranteed retirement accounts made up of government bonds, suggested Teresa Ghilarducci, an economics professor at The New School for Social Research in New York.

 

When workers collected Social Security, the guaranteed retirement account would pay an inflation-adjusted annuity under her plan.

 

“The way the government now encourages 401(k) plans is to spend $80 billion in tax breaks,” which goes to the highest-income earners, Ms. Ghilarducci said.

 

That simply results in transferring money from taxed savings accounts to untaxed accounts, she said.

 

“If we implement automatic [individual retirement accounts] or if we expand the 401(k) system, all we’re doing is adding to this inefficiency,” Ms. Ghilarducci said.

 

They want you to ditch your 401k for a government bond backed nationalized retirement plan. Most people probably will if they have to pay taxes on their total income before their contribution is deducted, which is a huge advantage of 401ks.

[NoCalMike 0]

So I will ask again, why is the government buying up all these mortgages a better option then the banks just working with people to lower the interest rate to a rate that would keep people in their houses, paying their bills?

 

Aren't some financial institutions in certain states already taking this step on their own?

 

People getting evicted is good for NO ONE.

[Edwin MacPhisto 0]

I don't understand a damn thing in that horribly written article, but amazingly it's the best discussion available of whatever this is about. I also don't see anything about anyone "putting up a bill," or any sort of metrics for whom this would apply to. I'm pretty sure these are just exploratory hearings.

[Guest]

Full-fledged crash, although there was an upturn after it was down nearly 800 minutes after opening. GM's getting hammered. We're fucked.