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Old 12-01-2008, 12:21 PM   #21
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So what's your conclusion? Where would you invest?

I have a hard time believing that globalization and cheaper overseas production costs can be trumped by a minor little problem like rising consumer debt.
...
What I do think is that people are going to keep spending until they run out of money. They they're going to keep working to get more money.
...
Some of them will work until they die, and others will figure out how to live on Social Security deposits. But I don't think that people's spending habits will permanently change, any more than similar sectors of the population will stop consuming more calories than they use, drinking too much alcohol, or smoking cigarettes.
A "minor" consumer debt problem? I thought every economist called it a major problem.

I hope Nords will turn out to be right, for my sake. But to hedge, same as Dex, I will look to invest more in US exporters as well as foreign companies that cater to the growing consumer bases in India and China.

About Americans who have to work till they drop, I hope society will create enough jobs for them.
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Old 12-01-2008, 01:26 PM   #22
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If we are retired and not contributing to society via work, then somehow, society supports us. Only a strong economy can support a lot of retirees.
An emphatic YES. And a strong economy needs workers!

In a much earlier thread that was condemned to the Soapbox, people were talking about how immigration should be curtailed as the boomers start to retire. :confused:

I thought we need to bring them in to do menial work, such as working in nursing homes taking care of us. In return for their labor, of course we have to exchange our possessions, our houses, and stocks. You cannot eat your cake and "take it with you" too.

Off topic:

In the news a while back, there was a story about a childless couple who willed their house to a non-related woman in return for the care that she would provide. They wanted a more personal care than what was customary in a nursing home. Still, I wonder how the quality of that arranged care could be assured.
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Old 12-01-2008, 06:24 PM   #23
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Well it's too late now anyhow. One of my predictions from a year ago was that the Fed would start buying up higher on the yield curve. Guess what they announced today?

Calculated Risk: Bernanke: Fed may buy Longer-Term Treasuries

Well the Treasuries have been fun, especially now with the Fed on my side!

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- "3": Not for me. With the risk of inflation as high as it is, buying long bonds is a very risky bet. They'd get hammered deeply. Unless you knew you'd be holding to maturity, I just can't see it--the present reward does not justify the risk..
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Old 12-01-2008, 06:46 PM   #24
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...if you have a government pension you really don't need to have your own retirement account.
if you were at an SES level of pay, like a federal district judge or an agency head, or a member of Congress, i'll grant that one.
if you were a regular person, no way is a govt pension enough to live on.
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Old 12-01-2008, 06:58 PM   #25
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I find this info interesting. A reduction in credit lines might not affect many people.
The truth about credit card debt - MSN Money

The surprising thing about this statistic isnt that its so widely known. Rather, its that the statistic paints a picture thats just plain wrong.
  • In reality, most Americans owe nothing to credit card companies.
  • Most households that carry balances owe $2,000 or less.
  • Only about 1 in 20 American households owes $8,000 or more on credit cards.
I'm not sure how relevant this data is right now. It's hard to tell because it's not dated (which is very annoying), but that article is several years old. It cites data through 2002. There's been a lot of borrowing going on since then. But she did a recycling reprise of this article in Jul '07 (that I found when trying to figure out when this one was written) - The big lie about credit card debt - MSN Money - with essentially the same conclusion, so maybe it's still valid. That data was thru 2004. Still not real current though.

I certainly hope so though.
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Old 12-01-2008, 07:18 PM   #26
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if you were at an SES level of pay, like a federal district judge or an agency head, or a member of Congress, i'll grant that one.
if you were a regular person, no way is a govt pension enough to live on.
YMMV, I am spending less than $30,000/year. I do have other funds that I have not yet accessed.
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Old 12-01-2008, 08:23 PM   #27
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The best way to invest, in my small opinion, is to

  • preserve capital (minimum)
  • buy again when stocks are cheap (better)
  • meanwhile own long Treasury bonds (best)
Didn't we have this discussion here? Estimating the stock/bond risk premium
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Old 12-01-2008, 08:24 PM   #28
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Well the Treasuries have been fun, especially now with the Fed on my side!
Do you think Uncle Ben will drop you a line when he decides to stop buying or stop jaw-boning?
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Old 12-01-2008, 08:24 PM   #29
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YMMV, I am spending less than $30,000/year. I do have other funds that I have not yet accessed.
what does YMMV mean?
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Old 12-01-2008, 08:29 PM   #30
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what does YMMV mean?
* Acronyms and Slang Frequently Used on the Forum *
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Old 12-01-2008, 08:38 PM   #31
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couldn't find it amongst all the posts.
can someone spell it out, pleeeeezzz?
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Old 12-01-2008, 08:41 PM   #32
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Ahem...
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Standard Acronyms You May Find on the Forum

YMMV - Your Mileage May Vary
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Old 12-01-2008, 08:43 PM   #33
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Ahem...
OMG - i thought YMMV stood for "You're Making Me Vomit".
i think i need a lobotomy!
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Old 12-01-2008, 08:56 PM   #34
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OMG - i thought YMMV stood for "You're Making Me Vomit".
i think i need a lobotomy!
I sometimes forget that I have been posting since mammoths roamed the web. I tend to assume that people know what I am talking about.
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Old 12-01-2008, 08:57 PM   #35
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Do you think Uncle Ben will drop you a line when he decides to stop buying or stop jaw-boning?
I was thinking the same thing. Holding 30 yr T Bonds right now seems a lot like holding internet stocks in spring of 2000. Yeah they can go higher I suppose, but not much. And when they start reversing it could be (will be) nasty.
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Old 12-01-2008, 09:18 PM   #36
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I sometimes forget that I have been posting since mammoths roamed the web. I tend to assume that people know what I am talking about.
from here forward, read YMMV a la my interpretation and try to keep a straight face.
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Old 12-01-2008, 10:12 PM   #37
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Not to hijack, anybody see this?

My dear friend and co-blogger Doris “Tanta” Dungey passed away early this morning. I would like to express my deepest condolences to her family and friends.

from the link in post #23
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Old 12-01-2008, 10:22 PM   #38
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You folks still don't understand the nature of the problem. Comparing Treasuries right now to the dot.com bubble is a false analogy.

OT - yes I knew Tanta.

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I was thinking the same thing. Holding 30 yr T Bonds right now seems a lot like holding internet stocks in spring of 2000. Yeah they can go higher I suppose, but not much. And when they start reversing it could be (will be) nasty.
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Old 12-02-2008, 05:29 PM   #39
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You folks still don't understand the nature of the problem. Comparing Treasuries right now to the dot.com bubble is a false analogy.
Understanding and agreeing are two different things. And they don't necessarily go hand in hand.
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Old 12-02-2008, 10:46 PM   #40
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The conundrum of our retirement planning is that the non-retired portion of the population must support us. Assuming we have them, we have to be able to sell our stocks and bonds and houses and gold or whatever to the younger generations. The working population has to fund our SS and Medicare (as current legislated). Tax collections have to pay public pensions, and business income private pensions.
If we are retired and not contributing to society via work, then somehow, society supports us. Only a strong economy can support a lot of retirees.
Excuse me, but by any chance have you posted to the wrong discussion board? Hopefully you're not posting from your workspace!

What about the possibility that retirees have worked their assets off to accumulate possessions that are of value to everyone else, no matter their age or employment status? I don't know how old the people are who buy the stocks & bonds & houses I sell to them, and I don't know if they have jobs or they're retirees, but they're presumably buying these things at what they perceive to be a fair value. No charity required.

Have you considered that you're not paying taxes to support a bunch of deadbeat retirees? You could be paying taxes to encourage people to undertake careers that few may care to pursue but which may become attractive when funded by an annuity. It's the price paid to enjoy the society we're all supporting. Or maybe firefighters & police officers choose those careers because it's easy to get hot dates.

It's a very grim view of the world to think that one can only support a society by working for money. Just like farmers & ranchers attempted to become self-supporting, at some point one's efforts should achieve the critical mass to do the same. Social Security and Medicare have turned out to be the way this particular society has implemented a safety net-- for a lot more people than just retirees-- but again it ain't charity.

As for strong economies supporting a lot of retirees... I'm not sure how Dave Barry would justify Florida.
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