Posted on 09/15/2007 2:24:18 PM PDT by AuntB
The new numbers on consumer confidence are out. They show American consumers very confident that the economy is going down the tubes.
Over in Asia and Europe, stocks plunged on fears that Americans may no longer be able to find the second jobs and recklessly borrow the money needed to buy imported stuff. Economists now freely use the "recession" word following the report that American payrolls fell in August, the first monthly decline in four years.
American consumers, in other words, are all dried up. And the discussion has begun on what kind of baloney economy kept them lubricated for so long.......
Of course, some professions thrive in tough economic times. Business should be brisk for bankruptcy lawyers. And we will need auctioneers to help unload foreclosed properties........
Today's "partying," he said, would lead to tomorrow's "hangover."
So here we are: The partygoers have downed a bottle and still they can avoid a hangover.
A recent article on the Motley Fool's British Web site offered "Five Ways to Prepare for a Recession." The prescriptions: Don't make big luxury purchases you can't pay for with cash. Build an emergency fund. Live more frugally. Reduce your debt. Find more work.
All sound advice, but consumers had better act fast — like five years ago.
(Excerpt) Read more at seattletimes.nwsource.com ...
Not everyone.
Yeah, stagnant wages, and wages driven down by millions of low wage illegal aliens can cause quite an impact
Yes, perhaps if you remain "one skilled" service type job. Not all states are effected, mine is not. Those state governments such as Calif, Arizona, NY etc need to take the bull by the horn and clean up their own act (enforcement) and not expect those in other states that do not rely on this type of labor force.
Welfare has to be addressed as sure easier to hand out the fish then teach the technique albeit welfare recipients need not work. Readdress those issues in combination and would be no need for an illegal workforce.
A bridge falls down in a state with a surplus, a levee breaks in a state that should have had more environmental/land use safe guards, a multi billion dollar tunnel is built and the rest of the unaffected states are made to contribute. Governors file "state of emergencies" when the emergency could be handled with good fiscal responsibility within that state and not the need of an entire country taxpayer bailout.
Government is so big, that no one knows what the other is doing therefore leads to corruption, incompetence, bureaucracy so wait over there someone will be with you soon..the hand on the clock glides by each hour $$$$$$$.
I’ve been telling you for six years, death is a conspiracy of liberal media!
Basics do not suffer.
Box makers do not suffer
The glamorous, image related job need not a success be.
;)
People in cash on the sidelines see a coming recession they are buffered from and will get great deals in stocks and real estate when both investments crash.
Put me down as none of the above. I have some debt, some cash, some equities, some gold, some energy trusts. I don't know what is going to happen but I do know what Bernanke has said he would do. To avoid deflationary recession, he will inflate. Read his remarks for yourself: Remarks by Governor Ben S. Bernanke November 21, 2002
After you read it, think about how things you might do with your cash to avoid having it inflated away. One conservative strategy I would recommend is utility stocks.
The FairTax would admittedly be a good thing to help that...but I worry about the upheaval that would occur during the implementation as money would be shifted around a lot.
Remember though that 401k and retirement accounts are NOT included in “savings” figures IIRC.
Those stats are for people in THEIR TWENTIES..in other words..just starting out. Those are actually much higher than I would have imagined. Someone in their 60s meanwhile is about 10x those amounts.
The Seattle Slimes, little sister to the LA Slimes and NY Slimes. All going down the same tube, not to worry.
That savings rate as far as I know do not include investments into 401ks and ROTH IRAs as they are ‘investments.’ Obviously if you have a negative ‘savings’ rate of -.5% and a investment rate of 10%, in the long run you will come out way ahead.
OK, can we deal with some facts here?
The common statistic for the Nation’s savings rate does not include all of American’s vehicles for savings or all the ways that we create wealth. It sure would be nice if our dysfunctional government could come up with accurate statistics upon which to make decisions.
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http://seekingalpha.com/article/25897-negative-savings-rate-not-so-worrisome
Negative Savings Rate: Not So Worrisome
posted on: February 02, 2007
You can definitely put me in the camp that claims the U.S. economy is nowhere near as good as the stock market is telling us, but at least one statistic used by the pessimists out there is really not a big deal; the personal savings rate. From the AP:
Personal Savings Rate for 2006 Drops to Negative 1 Percent, the Lowest Level in 74 Years
The Commerce Department reported Thursday that the savings rate for all of 2006 was a negative 1 percent, meaning that not only did people spend all the money they earned but they also dipped into savings or increased borrowing to finance purchases. The 2006 figure was lower than a negative 0.4 percent in 2005 and was the poorest showing since a negative 1.5 percent savings rate in 1933 during the Great Depression.
The savings rate has been negative for an entire year only four times in history — in 2005 and 2006 and in 1933 and 1932. For December, the savings rate edged down to a negative 1.2 percent, compared to a negative 1 percent in November. The savings rate has been in negative territory for 21 consecutive months.
We keep hearing how the rate has been negative and what that tells us about the American consumer’s balance sheet. However, the statistic is very misleading. One would think that calculating a savings rate would include accounting for what most people consider to be “savings.” That is, money that is put away for future use and not spent.
Unfortunately, the personal savings rate simply takes one’s disposable income (income after taxes are paid) and subtracts spending. Actual savings, most notably retirement savings in 401(k) plans and IRA’s, is not actually counted as savings in this statistic. So, you can see that we really can’t conclude that people aren’t saving nowadays. We just don’t know how much people are saving from this number alone.
What we do know is that debt levels are rising in the American household, but we already knew that. We know the average American has thousands of credit card debt, and with historical low interest rates and very easy credit, it’s no surprise people are accessing it. However, without including monies earmarked specifically for savings by consumers, the personal savings rate really doesn’t tell us as much as some would like you to believe.
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http://economistsview.typepad.com/economistsview/2005/08/in_search_of_ac.html
More recently, a debate has begun over the nation’s savings rate, which officially hovers just above zero. When Congress returns in September, the House Ways and Means Committee will try to put together legislation to raise personal savings through tax credits and other incentives. But according to David Malpass, chief global economist at Bear Stearns & Co., the … official savings rate measure does not consider economic gains from patents, innovation, capital gains or land appreciation. “We may be throwing billions of dollars at a problem that isn’t there,” said Emanuel, who has advocated savings proposals.
Good grief! How many people do you think have a 401K plan?
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Good grief! How about presenting your own information instead of just throwing out a nebulous question? Do you know what a search engine is?
http://www.research401k.com/latest-news.html
401k Retirement Plans now have 47 million active participants, which is more than double the size of Private Defined Benefit Plans that have about 21 million active participants. 401k Plans currently hold $2.4 trillion in retirement assets (liquid cash and investments) while private defined benefit & pension plans hold $1.9 trillion. (Read Full)
42 million. And there are how many people in this country?
You are a fount of information aren’t you? As for the total population of the country, are you demanding that children, the disabled and retired people all have 401k plans? Why not think this out?
Bad news for ya. Every state is affected, including yours...For example, remember when construction used to be a skilled industry? Guess what, the illegals have brought down wages across the board in that industry dramatically. Along with many other industries. It filters down through everything.
A good griend of mine that hauls heavy construction equipment hasn’t had hardly any work in 3 months so construction is going to take a super big hit here in So, Cal. shortly.
Before 3 months ago he was busy 7 days a week.
I find your focus in the last few posts on “distribution of wealth” meaningless in this conversation.
http://bartlett.blogs.nytimes.com/2007/01/24/is-income-inequality-really-a-problem/
Personally, I am willing to concede the point, but I would prefer to come at the income distribution question in a different way. I have long sought a study showing exactly what the cost of inequality is. If my real income does not fall, how am I hurt when Bill Gates makes another billion dollars? After all, the economic pie is not fixed. What he gets doesn’t come at my expense, so why should I or anyone else care?* There may be a few people who suffer psychologically from feelings of inadequacy when they read about Gates’s gain, but that’s not a valid justification for taking away someone’s honestly earned wealth. We don’t want to be equally poor.
As long as you admit to a dark sense of humor, you should probably consider the fact that “nobody is in charge.” The international currency markets, Wall Street, etc. etc. are large forces that pols have only small control over. It’s an optimistic view to say, “They could help the little guy if they wanted to...” but the truth of the matter is, they can’t. The best thing you can hope for with any legislation in this situation is to ease the pain, not eliminate the root cause. And I don’t know of a pol who will admit to that...
Heck, the savings rate is negative as of 2005 or 2006, I listen to Chuck Harder, his “For The People” show, a lot and he has been saying that for a while. He’s one of the few in the media that actually “get it.” He said the same thing I did a while back, what has kept the good times rolling (with the exception of Kawasaki B-)) was the easy flow of debt, as the commecial goes, “How do I do that, I’m in debt to my eyeballs.” Although show that “gets it” but it is local is Rob Verb and Casey Malone from Youngstown, Ohio, WKBN-AM 570kc, I called in the other day to bring that idea to the discussion table and they agreed with me. I think this game of musical chairs, the record is almost done and the 8-Track tape is wearing thin so hold on to your hats.
According to the Wall Street Journal, less than two-thirds of all workers save to 401k plan.
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Its not your fault that this article is poorly written, but you do realize that 65 percent would be less than two thirds and a pretty solid number of workers right?
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