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The reality is that the deterioration that we see on all sides of us is a direct and predicted result of reliance upon a laissez-faire free market capitalism approach to economic policy. The increasing lack of oversight, regulation, and transparency that have been introduced into all manner of markets over the past 30 years or so are merely bearing the same fruits today that they have always borne. Normal, rational people with no fair share of culpability for it are being hammered by it, and their losses, if left unattended, portend further losses still for the rest of us. It is the game, not the players, that is broken. It is getting time to fix it again, as it has had to be fixed before.
Ok, I have a question concerning oversight and regulation. In the current situation and from I can best understand, the finest brokers, analyst, etc... sit behind a desk each day on CNBC or Bloomberg and carry on about how this is either a bump in the road or could be cured by this or that. Day after day, I see the endless talking heads go on, and each day, they continue to point out the most positive of all possible outcomes. Six months ago, only one in 25 analyst would have said we would be where we are today.
So, my question is, does anyone truly understand the gravity of this situation in its whole? Or are these people viewing this problem from their current corner of the market such as commodities, securities, etc...?
I get this feeling after having watched these channels more than ever the past six months that either no one really understands how it is all related or what a viable solution is that won't put the ouchies on us all. Seems hard to regulate something that appears to not be understood.
"Diversification is actually defeatism. It assures that most of your money will be in your less well-performing investments. The reason that it is so often recommended for John Q. Public is that such folks can't do picking against the pros and can't do timing at all. As everything isn't likely to crash all at once, go out and buy some of everything. At least you won't lose your shirt. Better advice would be to do simple dollar-cost averaging into a low-fee index fund and then go read a good book. But that's not romantic enough for some. It doesn't come with all that cool vocabulary that the otherwise unsophisticated love to toss around. Meanwhile, the actual degree of diversity accomplished by most diversified investors ends up being considerably less than what they think it is. And to come back to original point that you have completely ignored, diversification is no defense at all against the lack of transparency"
Just what is "dollar cost averaging into a low interest index fund"?
I agree about the insurance companies cheating on the storm damage. Oh, no we don't cover water damage from a broken levee. That is flood damage. We don't call having your home blown off the foundation storm damage. That is wind damage. We insured you for rain storm damage. Lying cheats.
Memo to Files: I'd like to take up the questions raised in Posts 105-110 or so, but I'm again not going to have too much time today or likely tomorrow. It's starting to be the busy season for me...I'll do what I can. Meanwhile dollar-cost-averaging is essentially buying the same dollar amount of an asset periodically, regardless of its price variations. It's a cheap way to enforce buy-low-and-sell-high, as over time you acquire many more shares when the price is down that you do when the price is up. A low-fee index fund meanwhile can offer the typical advantages of diversification, but index funds deliver a built-in advantage in that management fees that disappear annually from your account are distinctly lower than what would be incurred from investing in actively managed funds or in individual issues selected and traded through a broker. The differences often don't seem very large to an average investor, but over time they become quite significant. Okay...have to go off and do real work now...
Diversification is actually defeatism. It assures that most of your money will be in your less well-performing investments. The reason that it is so often recommended for John Q. Public is that such folks can't do picking against the pros and can't do timing at all. As everything isn't likely to crash all at once, go out and buy some of everything. At least you won't lose your shirt. Better advice would be to do simple dollar-cost averaging into a low-fee index fund and then go read a good book. But that's not romantic enough for some. It doesn't come with all that cool vocabulary that the otherwise unsophisticated love to toss around. Meanwhile, the actual degree of diversity accomplished by most diversified investors ends up being considerably less than what they think it is. And to come back to original point that you have completely ignored, diversification is no defense at all against the lack of transparency.
Sure, it isn't the fast buck. It doesn't produce that "hit the lotto" results. Though with some looking into what you invest in, you can take some risks with some stocks and balance it out with safe ones if you so desire. If things turn out good, you have a very healthy increase. If they do not, you really only lose what you were willing to gamble with.
Stocks are not all that needs to be invested in though. There are tons of areas to spread your money around to insure that you have a good return when you retire.
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Originally Posted by saganista
Actually, you were talking about entire towns. Are we really up to the point of having irresponsible towns, now?
I was only commenting on someone mentioning towns failing because the sum of its citizens were acting irresponsible with their money. If that happens, so be it. Some who were being responsible would certainly take a hit, but then they would also (being that they are responsible) be able to recover from it as well.
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Originally Posted by saganista
I don't call it being mean, I call it being silly and selfish through being grossly unrealistic. You and others wave this flag of responsibility of yours, claim that you don't have any of that yourselves so it must all be on someone else, and then you duck out the back door. My guess is that you're not one who's ever volunteered to be on the Clean-up Committee.
I honestly think it is the exact opposite of unrealistic. Unrealistic is expecting everyone else to manage and bail out everyone else because they were irresponsible. We aren't talking about issues where someone was strong armed out of their money. We aren't talking about issues where people had the facts hidden from them.
The issues with people buying the houses they did, buying the cars they do, etc... are all issues where the responsibility is theirs. I shouldn't have to suffer to bail them out because they decided not to do any thinking when they made their decisions. If you want me to be responsible for their decisions, then I want to make their decisions for them. That way, I know what to expect. I it irresponsible and unrealistic to expect otherwise.
While it is sad that people make stupid mistakes (I've made several in my life as well, but I also took care of them myself) and I do have sympathy for the hardships those mistakes produced, but I am not sorry for them personally. They decided to roll the dice and they lost. They now have to deal with the consequences of those decisions. It is what it means to be an adult.
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Originally Posted by saganista
It's not an aspect of truth at all, it's an unfounded, holier-than-thou aspect of self-serving excusification. One might as well raise the flag of excusifying responsibility issues over Mississippi home-owners losing everything in a hurricane because they all bought insurance policies with standard clauses through which legal maneuvers could be run to evade any obligation by the issuer to pay off claims, while oneself being a homeowner on the hurricane-prone Carolina coast and holding exactly such an insurance policy yourself. So-called responsibility here boils down to nothing more than the matter of luck inherent in where hurricanes end up striking and where they don't.
And those are special issues. They were I hope responsible and if you are correct and those insurance agencies are actually to blame for being dishonest in their policies, I agree, that is wrong, yet we can hold them responsible if they are at fault. Again, putting responsibility where it is due.
Now if those home owners refused to get the right plan because they were penny shopping and gambling on those "rare" occurrences not happening, then it is their responsibility. They made the choice, they decided to take the risk.
Whats funny is that there was a freak flood here in Texas when we moved here a couple years ago which hit a small town west of Fort Worth. One of the people who got hit was a business owner who (low and behold) happened to be a home insurance salesman. He was interviewed and he said that it was actually rather ironic because he wasn't covered. He explained that he wasn't covered because he chose not to add that insurance due to costs and he even said that he "took a gamble that this wouldn't happen". He actually laughed at it and said "I guess I won't make that mistake again".
So here we have an insurance salesman (evil greedy people they are /sarcasm) who apparently can take responsiblity for his own decisions, but we are supposed to accept that other people shouldn't? Seriously?
My wife currently works in an industry that deals with these irresponsible people all day long. They are not having hardships because they were "suckered", but because they decided to sucker themselves. They ignored responsibility when they made their decisions. They spent money based on what they believed they would have. They spent money on things they knew they couldn't afford (or didn't care enough to even check). They knew what they were doing from the get go. It is their problem, not mine.
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Originally Posted by saganista
I need no further convincing of the premise that you are well grounded in nursery rhymes and fairy tales. I am ready to concede that this is your milieu. I would suggest in fact an over-reliance on such. Myth and fantasy may be comforting, but they must at some point give way to reality. The reality is that the deterioration that we see on all sides of us is a direct and predicted result of reliance upon a laissez-faire free market capitalism approach to economic policy. The increasing lack of oversight, regulation, and transparency that have been introduced into all manner of markets over the past 30 years or so are merely bearing the same fruits today that they have always borne. Normal, rational people with no fair share of culpability for it are being hammered by it, and their losses, if left unattended, portend further losses still for the rest of us. It is the game, not the players, that is broken. It is getting time to fix it again, as it has had to be fixed before.
Regulation is the problem. The lack of requiring people to be responsible for their own decisions is the issue. You are not providing a fix, you are merely dumping gas on to the fire. You keep making excuses for the irresponsible, keep pointing to areas that are not the problem. You can't fix the problem if you refuse to accept the cause of it.
Normal rational and responsible people don't expect others to fix their problems. They don't expect others to carry their burden. They don't place blame on others when it is due on them. Irrational people act with emotion, focus on "feeling good" and all the irrelevant crap that has no bearing on the issue. Responsibility is something people hate because it makes them "feel bad" and considering we are a nation growing daily with these touchy feely rejects, it is not surprising that we are seeing an increase in problems "For them". So "feel" all you like for them and start getting that second job so you can make their life more comfortable. I am not paying for them, I am not giving them more ammunition to be the fools they are.
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Originally Posted by saganista
I will pay for it, and so will you. It would be wise if we were able to arrange the highest bang for our bucks in doing so. Once cut, we will need to stop the bleeding and reduce the chances of being cut again. I meanwhile expect that I will have an easier time than you in coming up with whatever my fair share of all this turns out to be for reasons that will arise in the areas of both philosophy and finance...
Ahh yes, you will pay for it, but misery loves company and so does foolishness as well. So you will legislate and send your mob bouncers over (the government) to shake me upside down to get money because it would infuriate you to go into the hole with your generous offering to the irresponsible. You must force everyone to be in the same boat as you.
So I guess I better start really crunching and saving my pennies, continue on with my responsible living decisions so I can afford to pay for all the wonderful people out there who refuse to do so themselves.
Why not just create a foundation and ask for donations? Whats that? The problem is too big you say? There are too many irresponsible people out there and your small groups who love to dictate your will to the masses can't find anyone stupid enough to throw their money at your foolish causes? I see, if you can't get the money honestly, run to the government and force them to steal more from the people who wouldn't support the idiocy! Brilliant!
With all the talk of gas prices and falling value of the green back I came up with a question. What do you guys think about credit card debt and what it says about America? Not only that what do you think the government should do about the situation.
Well, my wife got in a financial tight about 8 years ago, and borrowed on our credit cards. It took four years to pay them off. We NEVER carry interest on them and only use them to make airline reservations and internet purchases.
However, the one credit card we use is the BP Citibank Card. We use that on all our gas purchases. It gives us a 5% discount on all our gas purchases, plus we get a rebate card, too.
When we can save 15 cents a gallon on gas, you can't pass that up, you know?
The odd thing is that though this is frequently stated, it had very inconsistent applicability. In places like Columbus, Cleveland, Cincinnati, Detroit, Memphis, Dallas, Oklahoma City, Birmingham, Buffalo, Kansas City and Omaha, these stories about home appreciation taking off was only a story they saw in the newspaper. Even in the "hot" areas, this didn't happen at all times. The fact that some areas never saw the hot markets, and places with hot markets tended to have boom and crash cycles, would seem to me to make folks somewhat cautious about borrowing against equity. Obviously though, the lenders saw it differently than this.
Well, I can't speak to all those other markets, but Birmingham has pretty much seen a fairly consistent climb in home values--albeit in the modest 5% range over the past number of years. It's more of a steady increase, as opposed to a boom-and-bust cycle that seems to characterize a lot of these areas that are being ravaged.
Well, my wife got in a financial tight about 8 years ago, and borrowed on our credit cards. It took four years to pay them off. We NEVER carry interest on them and only use them to make airline reservations and internet purchases.
However, the one credit card we use is the BP Citibank Card. We use that on all our gas purchases. It gives us a 5% discount on all our gas purchases, plus we get a rebate card, too.
When we can save 15 cents a gallon on gas, you can't pass that up, you know?
My wife and I lived around 45 mins from her work. I work from home and so the gas when it went up was quite the expense. We decided to move to lower that cost. We are now only one mile from her job and spend about 40 dollars on gas every 2 months.
I know not everyone can do what we did, but we looked for a solution and found one. The CC thing is a great idea. My wife and I also buy everything on our CC so that the rewards program pays us back on our expenses. We don't pay interest, only a 20 buck a year membership fee for the program and we make roughly 400-500 dollars back a year due to point totals.
Funny, many people out there pay interest to the credit card companies, but we have them pay us interest. Works like a charm.
With all the talk of gas prices and falling value of the green back I came up with a question. What do you guys think about credit card debt and what it says about America? Not only that what do you think the government should do about the situation.
I don't use them, so I don't suppose it applies to me. I try to limit my purchases to rent and food...and cigarettes.
your living the right way!! My husband and I are trying to pay off our bit of debt. We have fallen victim to the CC lifestyle and are not happy having debts. We stopped ourselves early on though and will be out of debt within a year or so. However, I dont think its fair that the responsible ones have to feel left behind when everyone around them lives life to the fullest when the don't have a pot to p-- in!!
your living the right way!! My husband and I are trying to pay off our bit of debt. We have fallen victim to the CC lifestyle and are not happy having debts. We stopped ourselves early on though and will be out of debt within a year or so. However, I dont think its fair that the responsible ones have to feel left behind when everyone around them lives life to the fullest when the don't have a pot to p-- in!!
Of course, I have nothing to show for my money either. But that's okay. I have no truck with the rampant commercialism of America's society.
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