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Old 10-10-2008, 02:54 PM
 
675 posts, read 1,897,572 times
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Just wondering two things. 1) Do people here feel that Austin is still fairly safe from the global financial crisis? and 2) If not, what is everyone doing to prepare for the worst? Recently I've been out shopping and have not noticed any difference in the level of spending that seems to be going on. Also I have some friends who just sold their house in 1 day. (Granted it was a few weeks ago). Is Austin safer due to the presence of UT and Government related jobs?
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Old 10-10-2008, 03:08 PM
 
Location: Austin, TX
15,237 posts, read 35,428,196 times
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I have no idea...we have not really changed our habits in any way I can think of. We aren't buying any big dollar items, but it is not like we were planning to right now. We have no intention of selling or buying a house, but we've always planned on staying right where we were anyway. My job is very secure at the moment, while my wife's is moderately secure - but we've been saying that about hers for several years now and have figured out we could live off my salary if we needed to.

So as far as any impact to us, the worst is being unable to resist checking out the 401ks . We just tell ourselves that we are just buying in cheap now that the market is down .
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Old 10-10-2008, 03:24 PM
 
2,627 posts, read 6,547,555 times
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We're just ignoring the media hype. Nothing has changed so far for any of my family, neighbors, or friends. I have a new Samsung LCD TV on its way. My neighbor is buying a new car in a couple weeks.

I've never paid attention to the doom and gloom. I have to wait just as long at Trudy's on a weekend night to get seated. I haven't personally seen much of a slowdown. I have seen that homes are taking longer to sell in my neighborhood (North West Round Rock), but that's about it.
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Old 10-10-2008, 03:33 PM
Status: "Springtime!" (set 5 days ago)
 
Location: Jollyville, TX
5,847 posts, read 11,842,077 times
Reputation: 10847
When the major employers start seeing a downturn in their business, layoffs will ensue and things will get worse. Hard to say if/when that will happen, but I saw it in 2000/2001 and it wouldn't surprise me if it happens again.

I'm staying clear of debt, stockpiling cash, and keeping my old car. If things go south, I'll be ready. If they don't, I'll have a lot more money to invest towards retirement.
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Old 10-10-2008, 04:51 PM
 
Location: Austin TX
1,590 posts, read 4,561,075 times
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Lets just hope we get so optimism back in the world markets. I feel that this is a total over reaction and the pendulum must move back soon....It just needs a reason!
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Old 10-10-2008, 05:10 PM
 
Location: Central Texas
20,958 posts, read 45,185,524 times
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Quote:
Originally Posted by S6Sputnik View Post
Lets just hope we get so optimism back in the world markets. I feel that this is a total over reaction and the pendulum must move back soon....It just needs a reason!
I agree. I've had the strong urge to go up to Wall Street, bash some heads together, and send everybody, but everybody, from Bernanke on down, to their rooms for a time out - they're acting like scared two-year-olds, and like the world is ending. All the while, there are people out here living lives, buying things, selling things, raising families, working - and those tantrums being thrown in the financial sector aren't fueled on anything more than emotion, at this point, but they're effecting us. (Not that they've ever been fueled on much more - the world does NOT change 300 points worth up one day, down the next, on a regular basis, folks, I'm sorry, but you're way to manic depressive to be in charge of anyone's money.) Plus, all the rest of us are reacting to, not the whole story, not the facts, but what the media chooses to tell us - and THEY need to be sent to their rooms for at least a week, in my opinion, and then told that they can't write anything bad unless they write two good things for a while.

Sorry, down off the soapbox now, just had to get that off my chest.
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Old 10-10-2008, 05:34 PM
 
648 posts, read 1,957,092 times
Reputation: 184
I agree that fear is a good part of it. We just need an economy based on real growth, not one based upon too much leverage and spending what you don't have.

People, banks, business, etc. are hoarding cash. An economy contracts when people don't invest and spend, but overspending is bad too. Seems like we are an economy of extremes.

Wish I had the answers. Unlike my colleague who shifted his entire 401K to US Treasuries, I just refuse to look.
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Old 10-10-2008, 05:46 PM
 
979 posts, read 2,945,234 times
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I think the idea that Austin is somehow immune is dead wrong. We were hit very hard in the 2001-2002 recession and this one looks worse.

Just for starters, check out the stock charts of some of Austin's biggest and best known companies:

Whole Foods: WFMI: Summary for WHOLE FOODS MARKT - Yahoo! Finance (6+ year low)
Dell: DELL: Summary for DELL INC - Yahoo! Finance (10+ year low)
AMD: AMD: Summary for ADV MICRO DEVICES - Yahoo! Finance (18+ year low)

The state revenues and state hiring may also suffer when you consider the fate of the oil service companies in the last several months.
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Old 10-10-2008, 06:22 PM
 
Location: Great State of Texas
86,052 posts, read 84,137,120 times
Reputation: 27718
Worst week on Wall Street since 1933 they say.

I'll give you guys the $2 summary

This week had some big CDS contracts coming due (this is the toxic derivatives they talk about).
Monday was Fannie/Freddie and that settled at $.90 to the $1.00 - that means some bank had to fork out an extra $.10 to cover.
Today was Lehman CDS contracts coming due and that settled at $.08 to the $1.00 - that means some bank(s) had to fork out an extra $.92 to cover. This equates to about $500 billion they say.

This was a very bad week and that's why the bailout bill was pushed hard to get passed.
There's more toxic paper still coming due in the next few weeks.

This is an unregulated market..no bank has to say what they hold or how much they hold..but when the contract comes due..they have to pay full value...hence the frozen liquidity..banks do not trust each other so they won't lend.

There's a heck of a lot more going on..but this is the $2.00 version
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Old 10-10-2008, 06:25 PM
 
Location: Great State of Texas
86,052 posts, read 84,137,120 times
Reputation: 27718
Quote:
Originally Posted by TexasHorseLady View Post
I agree. I've had the strong urge to go up to Wall Street, bash some heads together, and send everybody, but everybody, from Bernanke on down, to their rooms for a time out - they're acting like scared two-year-olds, and like the world is ending. All the while, there are people out here living lives, buying things, selling things, raising families, working - and those tantrums being thrown in the financial sector aren't fueled on anything more than emotion, at this point, but they're effecting us. (Not that they've ever been fueled on much more - the world does NOT change 300 points worth up one day, down the next, on a regular basis, folks, I'm sorry, but you're way to manic depressive to be in charge of anyone's money.) Plus, all the rest of us are reacting to, not the whole story, not the facts, but what the media chooses to tell us - and THEY need to be sent to their rooms for at least a week, in my opinion, and then told that they can't write anything bad unless they write two good things for a while.

Sorry, down off the soapbox now, just had to get that off my chest.
If you have to go after someone..I'd suggest Paulsen, former head of Goldman Sachs..the company that invented the derivative investment !

$54 trillion in uninsured shadow banking investments, most of which is held by China, is something to be scared about.
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