Where is the US economy headed?

Cyclo, That's not surprising for several reasons. The first one being that the average worker's pay did not increase at those levels of GDP growth. We can't have salary increasing at or about the inflation rate, and at the same time show GDP growth at 3 percent plus. The math just doesn't work out that way. Most consumers have gone deeper into debt during that same period by taking out second mortgages on their homes that used up any increase in equity they may have had during the boon, but that's no longer the case. The opposite is happening, more mortgage defaults increasing at an alarming rate. When people begin to lose their homes, the economy can't be all that good. They still have to pay back those loans, and that takes away from consumer spending on other goods and services.

The market spike of 92 points on the DOW today is not sustainable. Take my word for it.

Something bad is in the wind, and it's not good news.

0 Replies

cicerone imposter wrote:

The market spike of 92 points on the DOW today is not sustainable. Take my word for it.

Something bad is in the wind, and it's not good news.

Somehow, I would not expect any good economic predictions out of you, imposter, so no surprise there (unless a Demcrat becomes president, then maybe the predictions will improve?).

So are you putting your money where your mouth is and can you report to us right now that you have pulled, or are pulling all of your money out of the market now before this very bad stuff happens?

0 Replies

okie, Funny you should ask; I pulled out about 35 percent of this month's increase out of the market, because I felt there was nothing to sustain the 14,000 on the DOW. FYI, it's now at 13,212. Any more dumb questions?

0 Replies

Good for you. I was also thinking it would correct itself downward at about that point. But if you were so 100% convinced, how come you didn't pull all of your money out? Were you just 35% maybe convinced?

0 Replies

okie, Another dumb question. When will you ever learn? My guess: never.

0 Replies

You are too funny, imposter.

How much do you charge for investors advice? Sounds like you are the ultimate expert and probably never wrong.

0 Replies

C'mon, you guys.

Oil at a new high today, and the stock market is down a little despite good home sale indicators for July.

My prediction is that stocks continue to slide this week - and the next. Bear Sterns has lost another hedge fund, and there are no doubt 6-10 more which are headed that direction....

Cycloptichorn

0 Replies

okie: Sounds like you are the ultimate expert and probably never wrong.

Where were you born? Who are your parents? You are probably the dumbest member on a2k - bar none.

0 Replies

Imposter, I can't tell if you are serious or just trying to be funny or sarcastic. Doesn't matter. What you think matters little about whos opinion is right or wrong. I hope that isn't too big a news to you. I'm sure you are right part of the time and wrong part of the time, just as I am, but I have good reasons to believe what I do. I hope you do. Making comments about my parents, I think is over the top, and I would not do the same concerning whoever your parents are. I think you would do yourself a service by knocking off the insults, which only reflect upon yourself.

In terms of the economy, it is a mixed bag in my opinion. Some indicators are positive, some not, and anybody can pick and choose those that portray their particular bias. I just take the overall opinion that we are not as bad off as you guys think we are, and I think your opinions are heavily tainted by politics.

Concerning the stock market, I honestly do not know which way it will go, but I think it will come back in a modest way, not with gangbusters. I don't see it dropping much further like a rock. If it drops again, it will probably correct itself, but we have to remember how far it has come back in recent years from about 7,000 some. Hey, General Motors reports a profit, that is sort of symbolic.

0 Replies

okie: I'm sure you are right part of the time and wrong part of the time, just as I am, but I have good reasons to believe what I do.

A little peak at reality.

0 Replies

okie wrote:

Imposter, I can't tell if you are serious or just trying to be funny or sarcastic. Doesn't matter. What you think matters little about whos opinion is right or wrong. I hope that isn't too big a news to you. I'm sure you are right part of the time and wrong part of the time, just as I am, but I have good reasons to believe what I do. I hope you do. Making comments about my parents, I think is over the top, and I would not do the same concerning whoever your parents are. I think you would do yourself a service by knocking off the insults, which only reflect upon yourself.

In terms of the economy, it is a mixed bag in my opinion. Some indicators are positive, some not, and anybody can pick and choose those that portray their particular bias. I just take the overall opinion that we are not as bad off as you guys think we are, and I think your opinions are heavily tainted by politics.

Concerning the stock market, I honestly do not know which way it will go, but I think it will come back in a modest way, not with gangbusters. I don't see it dropping much further like a rock. If it drops again, it will probably correct itself, but we have to remember how far it has come back in recent years from about 7,000 some. Hey, General Motors reports a profit, that is sort of symbolic.

On the other hand, Ford and Chrysler plunge.

The instability in the home mortgage market has really shook up the LBO and other finance markets; the long-term effects haven't even begun yet, but the short answer is that it's going to be harder to make big deals for some time.

Cycloptichorn

0 Replies

okie: I just take the overall opinion that we are not as bad off as you guys think we are, and I think your opinions are heavily tainted by politics.

The politics of today certainly has more influence on our economy and the world's economy as never before. It's because Bush is an idiot, and he thinks tax cuts during a time of war will help our economy - while bankrupting future generations with debt. I'll also admit it's not totally Bush's fault, but he exacerbates the negatives. We must blame the financial markets for allowing sub-prime loans to people who shouldn't even be buying homes.

The general trend of the US economy has not been good for the past six years. The proof is in the increase in Americans without health insurance, larger consumer debt, and more middle class falling into poverty. Wages have not been keeping up with inflation; a disaster in any economy.

As for our retirement investments, I keep track how our portfolio is performing for the long-term, but I also know how our portfolio performs week to date, month to date, year to date, 12 months, 24 months, and 36 months. One of the lessons I learned long ago is that each individual has a responsibility to manage their money. Nobody else has much interest as you do.

Our 36 month average annual return is over 10 percent. Our 24 months average annual return is 8 percent, and our 12 month return is 4 percent. We lost a little in July - less than one-half of one percent (but all of the gains/losses reflects our net after spending).

We're not rich, but I can travel to any place on this planet (where I determine to be safe enough) as many times as I please. We're probably better off than 90 percent of Americans. We have no mortgage, and pay cash for all our purchases.

I have no issue with my ability to manage our finances.

0 Replies

Quote:

Hey, General Motors reports a profit, that is sort of symbolic.

Wait a minute -

From cnn -

General Motors July sales sharply lower. More soon.

hmm

Cycloptichorn

0 Replies

Cyclo, Wha I read into the GM reports is that "profit is up" because they have laid off thousands of workers. Those are many of the middle-class families who have fallen into poverty.

Sales is up, but compared to what? Not a good gauge of anything without some supporting stats against their own sales and sales against their competitors.

0 Replies

cicerone imposter wrote:

We're not rich, but I can travel to any place on this planet (where I determine to be safe enough) as many times as I please. We're probably better off than 90 percent of Americans. We have no mortgage, and pay cash for all our purchases.

I have no issue with my ability to manage our finances.

Good for you. Same here. Far from rich, I don't even take cruises and don't live in a huge house or drive a Mercedes or even close, but my house and cars are paid for and my credit cards are paid off every month. I use them to buy gas, thats mostly why I have them, plus for trips and internet use.

I agree there is too much financial irresponsibility these days. Credit card companies give cards to people that they know they will run up huge balances and then they charge outlandish interest rates. And real estate agents encourage people to buy the most expensive property the people can qualify for.

We are inundated with advertising every minute of every day to buy anything and everything. The solution to this is, I don't. If the drug companies relied on me to buy pain relievers for everything that hurts slightly from your little toe to the top of your head, they would go broke. I guess I am lucky, but I see people buy almost anything if they think their comfort can be increased one thousandth of one percent.

I declare right here and now that if a person wanted to, you could save money on a minimum wage job by going to live in the right place and living the right kind of lifestyle. We have no discipline in spending right now, as a society, and that is also true with government.

0 Replies

okie wrote:

if a person wanted to, you could save money on a minimum wage job by going to live in the right place and living the right kind of lifestyle. We have no discipline in spending right now

I'll get to that quote in a minute.
The old Big 3 automakers reported sales down by something like 19%, 19% and 10%. I think Chrysler had the smallest drop. Toyota and Honda were down 9%. I am doing this from memory so I can't cite a source.
The problem for the auto industry-one problem amongst many-is that the cars are too damned good. When I was a kid, my parents, who were frugal depression veterans, still bought a new car every 4 years. Now cars last a couple of hundred thousand miles.
So automakers must look to vanity buyers or an increase in population for sales growth. And it may not be there.

To Okies's comment above. I come close to agreeing with you, Okie, and I think CI might also, although getting by on a minimum wage probably leaves little room for savings. But I heard, I think, a story about how, if someone could manage to put something like $20 a month into a savings account when still a teenager, by the time they reach the end of their working career, they would have close to a million dollars in savings.

I stop by a 7-11 once a week or so and make a stupid expenditure (cigarettes) and stand behind people in line making purchases as unwise as mine. Junk food and lottery tickets. The former is an addiction and the latter is chasing a dream, a dream unlikely to ever come true.

0 Replies

Many (or should I say most) people do not know how to manage their money. It's not the amount you earn that matters, it's how much you save. Any dummy can spend your paycheck, but it takes some discipline to save. I told my wife early in our marriage that we would save from 15 to 20 percent of our annual income, and we stuck to that plan throughout our working years.

We're probably better off today then many people who's income was much higher. My brother-in-law started his dental practice before I even finished college, and we're the same age. He just retired last year, because he lost a big chunk of his retirement savings during the high-tech bust. We were always conservative in our investments, and well diversified.

We didn't scrimp on travels when our children were young, and even had a share in a condo at Incline Village until we stopped going, so I sold our share, but we also had income property I sold when I retired.

I paid off our mortgage before it was due.

0 Replies

realjohnboy wrote:

But I heard, I think, a story about how, if someone could manage to put something like $20 a month into a savings account when still a teenager, by the time they reach the end of their working career, they would have close to a million dollars in savings.

Not even close to a million man. In today's dollars they would have about 350k at 10% annual return at the end of 50 years by doing $20/month. And in 50 years that 350k would be worth about 1/3 of that in 2057 dollars.

It's savings, but nowhere near a million.

0 Replies

maporsche wrote:

Not even close to a million man.

It's savings, but nowhere near a million.

I'll concede the point, Maporsche. I was relying on my memory of an NPR story from a week ago, Perhaps it was $20 a week. But 40 hours at $7.50 - taxes probably doesn't leave $20 for savings.

(How does $10 a week work).

0 Replies

john wrote :

Quote:

But I heard, I think, a story about how, if someone could manage to put something like $20 a month into a savings account when still a teenager, by the time they reach the end of their working career, they would have close to a million dollars in savings.

watching TV and reading the newspaper i'm being told BUY ! BUY BUY !

it almost seems unpatriotic to SAVE and NOT to buy , doesn't it ?

several times a week we receive mail and phonecalls : YOUR CREDITCARD IS WAITING ! , buy this , buy that !

we don't , but i can understand that many people must think that there really is a FREE LUNCH .

just look at what is happening in the U,S. mortgage market ; pretty frightening i think ! and not just for the owners who can't pay their mortgage payments but for the economy as a whole .
and the companies were offering houses with ZERO DOWN !

i know it's "buyer beware" but i also think businesses need to be honest and above board - and many are not imo !
hbg

0 Replies

Where is the US economy headed?

Related Topics

Quick Links

My Account

able2know