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Old 11-13-2008, 04:56 PM
 
Location: Wherabouts Unknown!
7,766 posts, read 17,113,083 times
Reputation: 9350

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Katzenfruend wrote:
those that are close to retirement age are really in bad shape... having counted on their equity and 401K's.
I'm am one of those boomers rapidly approaching the traditional retirement age. Fortunately for me, I have never been overly excited about the traditional form of retirement, though I do relish the freedom of not having to spend all day at the office. Fortunately for me, I haven't put too much stock ( no pun intended ) in IRAs, 401Ks, and Social Security ( it still sucks that my scrawny 401K has lost so much value ). I've prepared for retirement by living a healthy lifestyle and keeping myself in excellent health, and I've developed several interests that I can further develop into income generators. IMO, being healthy and having a means of generating income on demand is far more valuable than IRAs, 401Ks, SS, real estate, and other retirement income gimmicks. We've all seen how rapidly our holdings can be greatly reduced or wiped out almost overnite. I realize that staying healthy is not a guarantee either, but I do have far more control over my health than I do over my financial resources.

Jazzlover wrote: I predict, sadly, that the new Obama administration may fail as miserably as Bush has in its economic policies.

Hey Jazz since you have no way of knowing for certain how the Obama administration will turn out...for better or worse, why not predict / expect a more favorable outcome. To a certain degree, our expectations set the tone!

 
Old 11-13-2008, 05:07 PM
 
Location: wrong planet
5,133 posts, read 10,379,878 times
Reputation: 4216
[quote=CosmicWizard;6146994][b]
Quote:
I've prepared for retirement by living a healthy lifestyle and keeping myself in excellent health, and I've developed several interests that I can further develop into income generators. IMO, being healthy and having a means of generating income on demand is far more valuable than IRAs, 401Ks, SS, real estate, and other retirement income gimmicks. We've all seen how rapidly our holdings can be greatly reduced or wiped out almost overnite. I realize that staying healthy is not a guarantee either, but I do have far more control over my health than I do over my financial resources.
Health is wealth! Certainly without our health all the money in the world won't do us any good. Taking care of one's health and living a frugal lifestyle is the best path to follow. Being frugal will most likely be a necessity, rather than a choice, for many - in the coming years. It will be a lot easier for those of use, who have always lived frugally, than those that are used to living "high on the hog"...
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Old 11-13-2008, 07:26 PM
 
8,317 posts, read 26,256,282 times
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Quote:
Originally Posted by CosmicWizard View Post

Hey Jazz since you have no way of knowing for certain how the Obama administration will turn out...for better or worse, why not predict / expect a more favorable outcome. To a certain degree, our expectations set the tone!
Why? Because I've spent enough time in "the system" to know how it works. As they say, one should never watch law or sausage being made. And, despite the relative "newcomer" status of the President-elect to the scene, the underlying "machine" of both political parties--along with those that those machines have gotten elected into Congress--are still firmly entrenched. I also am relying on what Obama has said/promised for the past several months as he campaigned.
 
Old 11-14-2008, 12:20 AM
 
Location: Colorado Springs, CO
2,221 posts, read 4,789,417 times
Reputation: 1697
I believe I've finally found a panel of journalists that truly gets it.

In the Know: Special Report
 
Old 11-14-2008, 04:13 AM
 
16,434 posts, read 19,492,999 times
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Quote:
Originally Posted by Bob from down south View Post
I believe I've finally found a panel of journalists that truly gets it.

In the Know: Special Report
The is genuinely funny! Thanks!
 
Old 11-14-2008, 03:39 PM
 
13,732 posts, read 26,238,714 times
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No one close to retirement age should have been counting on "equity" unless they bought their house 20-30 years ago, in which case it will still have a lot of profit in sale, unless said retiree-to-be reamed it out with home equity credit.
If people bought houses in, say, the last 10 years with the assumption of huge profits, they weren't paying attention to the environment (or history).
Of course, what much cheaper place or area people were planning to live in with their equity profits, I don't know.
I do know ordinary working people who inherited close to $1 million when their elders died, said elders having owned a modest house in a now-expensive town for 30+ years, or a modest house on Cape Cod that was passed down through the family, or a triple-decker in what was an immigrant neighborhood, that Grandma bought in 1928 or something.
 
Old 11-14-2008, 07:18 PM
 
Location: Colorado Springs, CO
2,221 posts, read 4,789,417 times
Reputation: 1697
It's probably not a bad time to put some thought about the social unrest that's coming into the mix of this type of discussion.

The same people that apparently never studied economics or geography or math in school probably don't have an abstract intellectual appreciation of Maslov's hierarchy of needs, either...but it's wired in there just the same. As a large number of people--estimated at 10-20 million in the next year in the US alone--are left jobless and McMansionless, what will governments and communities do to placate an angry, hungry, and homeless horde?

And what will the world community do to keep unrest in its capitals from spilling into another world war, this time with second-string players packing thermonuclear weapons?

The political and social dimension of this disaster, like the economic one, is in its infancy. Those that have never been to places like sub-Saharan Africa, Serbia, Bosnia, and Bolivia have not seen firsthand what dangers lie in a disposessed angry populace, and what those nice people next door might do in order to eat. Seeing it first-hand is a lot different than anything you can imagine or watch on television. It is an ugliness that will shock millions of mollycoddled inward-looking American mall rats.

I'm finding, when talking to friends, family and my new neighbors here in Colorado, that people are as resistant to the idea of that turmoil coming as they were to the idea of economic depression a year ago. A look at Weimar Germany and the economic and social forces that drove Germany into the hands of Adolph Hitler's despotism, reveals frightening things about humankind that I do not believe have changed over the ages.

I wonder who has thought through how their community might work if 25% of the population is once again unemployed, if a severe deflationary monetary crash wipes out the equity and savings of another half of the population, and if the food and shelter you have are coveted enough by others that you may have to forceably defend it.

Will that day come? I hope it won't. But I think it might. Mankind has an unhappy way of repeating its biggest errors. No student of the early 1900s can miss the stunning parallels with today. The more people tell me that things have changed too much for it to happen again, the more things look the same from a macro and human behavior perspective.
 
Old 11-15-2008, 08:17 AM
 
Location: Wherabouts Unknown!
7,766 posts, read 17,113,083 times
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Bob...you can be counted on to deliver a daily dose of good news along with an upbeat, highly desirable prediction of the future.
 
Old 11-15-2008, 11:06 AM
 
Location: Colorado Springs, CO
2,221 posts, read 4,789,417 times
Reputation: 1697
Quote:
Originally Posted by CosmicWizard View Post
Bob...you can be counted on to deliver a daily dose of good news along with an upbeat, highly desirable prediction of the future.
Well, I guess I could sit here and pump "Dow 20,000!!" and take my place among the rest of the lemmings.

"Hope for the best, and expect the worst" has always worked for me. I prefer to be pleasantly surprised (and I am, semi-regularly) than caught flat-footed in a disaster.

The obscene leverage...borrowed, non-existent illusory money...that made us look fabulously affluent is disappearing like this morning's snow cover on a bright sunny day in Colorado Springs. Most people are in denial about the consequences, and rather than preparing and restructuring the world we live in to live within our means, I think we are more likely to lash out violently because we're pi**ed off about losing something we never really had.

Without that leverage and the smoke-and-mirrors illusion of fabulous wealth, we can't afford a lot of stupid extravagant things any more. $4 Starbucks coffees...I mean really, are you kidding me, three times the price of a loaf of bread for a cup of coffee??! $3,000 televisions with screens so big you need a 20-ft long room to get far enough away to fit the screen within your field of vision. $50,000 luxury cars that are worth $15,000 after three years. $500,000 houses with enough square footage to house three families that will probably soon be worth more like $200,000 in inflation-adjusted dollars. And all on borrowed, illusory money.

I was looking at intraday trading ranges on the Dow yesterday, after seeing Thursday's 10.5% wild ride. I've long held (and posted here way back in this thread) that these high-percentage swings in the equities markets are something unique to serious economic crises, and in fact the history shows about half of those days occurred in late 1929 and in the mid 1930s.

I think we're going to see a multiple-day stop-limit down dive in the markets very soon now. The accumulation of uncommonly dire economic indicators...massive layoffs and spiking unemployment, serious real pullbacks in consumer spending as easy credit associated with the illusion of fabulous wealth vanishes, and a housing market that's still 30% overpriced in relation to wages...leads me to that conclusion.

Add to that the fact that the Fed has lost traction. The last TAF auction early this week offered $150 Bn stopped at around 0.5% and saw only an 8% takeup rate. Ben can cut rates to zero now with no real effect. We're stuck in a liquidity trap now a la 1990s Japan, and the door is slamming shut behind us. All he can do now is print money and inflate, and once the rest of the world sees him doing that, they will run from the dollar, drive long-term treasury debt into the double-digits, and possibly bankrupt the US as it reaches a tipping point where it cannot service the interest payments on mushrooming national debt at something north of 20%.

And all that leads me back to openly wonder about the behavior of hungry, dispossessed mobs.
 
Old 11-15-2008, 02:55 PM
 
16,434 posts, read 19,492,999 times
Reputation: 9544
Quote:
Originally Posted by Bob from down south View Post


And all that leads me back to openly wonder about the behavior of hungry, dispossessed mobs.
I wonder if the scam artists collecting multi-million dollar bonuses have thought about that...
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