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Is this how our economy really works?
01-31-2008, 10:32 AM
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#1
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gone traveling
Join Date: Nov 2005
Posts: 2,146
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Is this how our economy really works?
For now, however, the Fed has obviously concluded (and we hope it’s right) that it’s more important to try to mitigate current conditions than to worry about hypothetical concerns. Economic growth in the fourth quarter of 2007 slowed to a barely perceptible 0.6 percent. Housing is already in a recession, and manufacturing is headed down. Foreclosures are rising. Lending is constrained. Consumers are pulling back in the face of job uncertainty and a reduced ability to borrow against their homes.
From todays NYTIMES editorial...
It seems that the only way our economy will expand is through people borrowing against their homes to buy stuff made in another country. How does that help the economy?
I have a feeling that the big shoe is going to drop in the equity markets and 10,000 dow will be a speed bump on the way way down ....
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01-31-2008, 11:06 AM
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#2
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Aug 2006
Posts: 12,483
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You're too pessimistic. People have to spend regardless of the economy, on things like food and gasoline and utility bills, etc.
The consumer has stepped up and done more than their share to get us back after 9/11. Meanwhile, the Fortune 1000 companies are sitting on hundreds of billions of cash on their balance sheets.
I think it's time for corporate America to step up and stimulate the economy..........
The Fed is dropping the cost of borrowing dramatically to invite businesses to do just that.
That's not to say there will not be ugliness ahead........
__________________
Consult with your own advisor or representative. My thoughts should not be construed as investment advice. Past performance is no guarantee of future results (love that one).......:)
This Thread is USELESS without pics.........:)
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01-31-2008, 11:09 AM
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#3
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Thinks s/he gets paid by the post
Join Date: Dec 2007
Posts: 4,764
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Wall Street climbs the wall of worry.
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01-31-2008, 11:20 AM
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#4
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Full time employment: Posting here.
Join Date: Nov 2005
Posts: 655
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Quote:
Originally Posted by newguy888
For now, however, the Fed has obviously concluded (and we hope it’s right) that it’s more important to try to mitigate current conditions than to worry about hypothetical concerns. Economic growth in the fourth quarter of 2007 slowed to a barely perceptible 0.6 percent. Housing is already in a recession, and manufacturing is headed down. Foreclosures are rising. Lending is constrained. Consumers are pulling back in the face of job uncertainty and a reduced ability to borrow against their homes.
From todays NYTIMES editorial...
It seems that the only way our economy will expand is through people borrowing against their homes to buy stuff made in another country. How does that help the economy?
I have a feeling that the big shoe is going to drop in the equity markets and 10,000 dow will be a speed bump on the way way down ....
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I believe we're in for a big drop as well. Wilshire 5000 has had 5 positive years in a row, and I think we're overdue for a bear market. I look at that as a positive thing, because at that point I will be changing my stock allocation from 50% to 60%.
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01-31-2008, 11:25 AM
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#5
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Mar 2003
Posts: 18,085
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Quote:
Originally Posted by Retire Soon
I believe we're in for a big drop as well. Wilshire 5000 has had 5 positive years in a row, and I think we're overdue for a bear market. I look at that as a positive thing, because at that point I will be changing my stock allocation from 50% to 60%.
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Oh boy, break out the party hats and firecrackers! A whole 60%!
__________________
"All animals are equal, but some animals are more equal than others."
- George Orwell
Ezekiel 23:20
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01-31-2008, 11:32 AM
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#6
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Aug 2006
Posts: 12,483
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Quote:
Originally Posted by brewer12345
Oh boy, break out the party hats and firecrackers! A whole 60%!
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I'm at 85% in equities, does that mean I'm screwed
__________________
Consult with your own advisor or representative. My thoughts should not be construed as investment advice. Past performance is no guarantee of future results (love that one).......:)
This Thread is USELESS without pics.........:)
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01-31-2008, 11:33 AM
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#7
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Thinks s/he gets paid by the post
Join Date: Jun 2005
Posts: 1,543
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Quote:
Originally Posted by newguy888
For now, however, the Fed has obviously concluded (and we hope it’s right) that it’s more important to try to mitigate current conditions than to worry about hypothetical concerns. Economic growth in the fourth quarter of 2007 slowed to a barely perceptible 0.6 percent. Housing is already in a recession, and manufacturing is headed down. Foreclosures are rising. Lending is constrained. Consumers are pulling back in the face of job uncertainty and a reduced ability to borrow against their homes.
From todays NYTIMES editorial...
It seems that the only way our economy will expand is through people borrowing against their homes to buy stuff made in another country. How does that help the economy?
I have a feeling that the big shoe is going to drop in the equity markets and 10,000 dow will be a speed bump on the way way down ....
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even though i think the market is due for a bear market, the NY Times are idiots.
pretty much every company that makes stuff overseas has hired a lot of people here in the last 10 years. they just hire skilled people and not factory workers
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01-31-2008, 11:47 AM
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#8
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Full time employment: Posting here.
Join Date: Nov 2005
Posts: 655
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You said it not me.
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01-31-2008, 11:57 AM
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#9
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Aug 2006
Posts: 12,483
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I wasbeing facetious, I haved time on my side..........
Besides, I've been 15% in bonds since 1999.........
__________________
Consult with your own advisor or representative. My thoughts should not be construed as investment advice. Past performance is no guarantee of future results (love that one).......:)
This Thread is USELESS without pics.........:)
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01-31-2008, 12:09 PM
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#10
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Recycles dryer sheets
Join Date: Oct 2007
Posts: 332
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[quote=newguy888;609607]
"From todays NYTIMES editorial...
It seems that the only way our economy will expand is through people borrowing against their homes to buy stuff made in another country. How does that help the economy?"
What about new jobs and rise in incomes?
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01-31-2008, 12:28 PM
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#11
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Thinks s/he gets paid by the post
Join Date: Jan 2008
Posts: 2,020
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>What about new jobs and rise in incomes?
What new jobs and what rise in income?
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01-31-2008, 12:32 PM
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#12
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Thinks s/he gets paid by the post
Join Date: Dec 2007
Posts: 4,764
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Quote:
Originally Posted by Marquette
>What about new jobs and rise in incomes?
What new jobs and what rise in income?
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Incomes have risen quite well.
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01-31-2008, 12:32 PM
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#13
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Recycles dryer sheets
Join Date: Oct 2007
Posts: 332
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I knew somebody would post that cute reply. FYI, normally we have have always had, in the long run, a rising GDP number that creates new jobs and we have rising personal income at least equal to inflation rate. Recessions come and go FYI.
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01-31-2008, 12:33 PM
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#14
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Aug 2006
Posts: 12,483
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Quote:
Originally Posted by cashflo2u2
I knew somebody would post that cute reply. FYI, normally we have have always had, in the long run, a rising GDP number that creates new jobs and we have rising personal income at least equal to inflation rate. Recessions come and go FYI.
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Maybe we should factor in that US personal productivity has been SOARING in the past several years.......and shows no sign of regressing.
__________________
Consult with your own advisor or representative. My thoughts should not be construed as investment advice. Past performance is no guarantee of future results (love that one).......:)
This Thread is USELESS without pics.........:)
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01-31-2008, 12:38 PM
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#15
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Thinks s/he gets paid by the post
Join Date: Dec 2007
Posts: 4,764
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I know for a fact I am much better off financially now than I was 10 years ago. So even after a tech crash,9/11 and this real estate fiasco. Clinton and Bush both were good to me
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01-31-2008, 12:44 PM
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#16
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Jan 2006
Location: Rio Grande Valley
Posts: 38,008
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Yes, I also have trouble getting excited about impending bear markets. Bear markets happen. They are temporary. I just have to look back at how much higher my portfolio is compared to 2000. Makes the short term stuff look unimportant.
I'm just not worried about the US economy falling off a cliff never to recover. Yes, there might be some short term pain. We'll get through it.
Audrey
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01-31-2008, 12:45 PM
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#17
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Thinks s/he gets paid by the post
Join Date: Jan 2008
Posts: 2,020
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Quote:
Originally Posted by cashflo2u2
I knew somebody would post that cute reply. FYI, normally we have have always had, in the long run, a rising GDP number that creates new jobs and we have rising personal income at least equal to inflation rate. Recessions come and go FYI.
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Sorry, I thought you had some specific resources for new jobs and rising incomes. I need a new job and a rising income!
edit: I'm a lot better off financially now as well. I was in college, living at home, and working for just a few dollars over minimum wage. I also didn't know beans about LYBM.
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01-31-2008, 12:47 PM
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#18
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Moderator Emeritus
Join Date: Jan 2007
Location: New Orleans
Posts: 47,474
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I'm a lot better off too. Things could have been much worse. Let's see, in 1998 I was newly divorced, my net worth was negative, I had a soft money job that was projected to fold at any minute, my salary was only 42% of my present earnings, I had nothing in either retirement accounts or taxable, I had a total of $200 in the bank and the rent was due. Yep. Things are a LOT better, now.
__________________
Already we are boldly launched upon the deep; but soon we shall be lost in its unshored, harbourless immensities. - - H. Melville, 1851.
Happily retired since 2009, at age 61. Best years of my life by far!
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01-31-2008, 01:32 PM
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#19
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Thinks s/he gets paid by the post
Join Date: Oct 2004
Location: LaLa Land
Posts: 4,698
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Quote:
Originally Posted by FinanceDude
Maybe we should factor in that US personal productivity has been SOARING in the past several years.......and shows no sign of regressing.
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FD, I think you should check with your AARP retirement calculator.
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01-31-2008, 03:05 PM
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#20
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: May 2005
Posts: 17,205
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I am at 90%..... and YES...
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