NWR: Financial chaos
- Thread starter SFJoe
- Start date
Sharon Bowman
Sharon Bowman
Sorry, but I cannot join in, here, as a euro earner. In NY last spring I was so flash, with $1.60 for each 1'er. Bought aged Salon, went on shopping sprees, etc. Now: glum(mer).
Florida Jim
Florida Jim
Nathan,
No 'stockmarket type' am I; but if you aren't livin' on the stuff you have in the market, what the hell are you worried about?
All this panic shit is just that; an irrational response that, in time, will cycle through - as it always has.
I'm 61 and a whole lot closer to my IRA than you are and this is just a bump in the road.
Jesus guys, take a breath.
Best, Jim
No 'stockmarket type' am I; but if you aren't livin' on the stuff you have in the market, what the hell are you worried about?
All this panic shit is just that; an irrational response that, in time, will cycle through - as it always has.
I'm 61 and a whole lot closer to my IRA than you are and this is just a bump in the road.
Jesus guys, take a breath.
Best, Jim
How do you define volatility? Biggest percentage change in a day? Most shares trading hands? In any event, I think that the answer is "no" regardless, but I'm no Wall St maven either. And don't you have TIAA-CREF? That's where my 403(b)'s been since '90, so like Jim I can't get all that worked up about this downturn. 20% loss in value? OK, that's '98 gone by the way.
Mark Lipton
Indeed. I was listening to NPR's interview today with one of those guys who arranges multibillion interbank credit transfers for a living, and he described the current situation as "watching paint drying." Fucking frightening, especially after Paulsen more than hinted at major Fed capital infusion into the credit markets.
Mark Lipton
(Gettin' ready to party like it's 1932)
Without the liquidity that the money market provides, we're screwed. It's not yet hit the institutions which I work with out here (as in short-term funding completely disappearing), but the spreads are certainly wider and the curves volatile. Add to that the political unrest in Thailand and Malaysia, and it's looking grim.
U
Unknown
Guest
Political unrest in Malaysia? How about political unrest in the USA! I almost strangled an innocent pizza guy yesterday, and he didn't even have anything bad to say about Trimbach.
Marc Hanes
Marc Hanes
Hello Joe. I hear time and again that the credit crunch is preventing both corporations/companies but also the regular consumer from gaining credit to buy.
Err, might one aver that the true underlying issue is the American economy is built now on consumption rather than production and/or saving money? If a personal household is being run prudently and in a monthly cash flow positive manner, why would the unavailability of credit pose a major grave threat?
This takes into consideration the need for sporadic major outlays such as home repairs, old car dies and new one needed, time to get a washer/dryer, etc. But put me in the camp that believes a national economy built on consumer spending will never truly recover and gain sustainable health. Never.
Available credit for corporations/companies is another matter but then the question is, what are the borrowed funds used for? Production facility funding? Pension funding when the pension fund was already borrowed against and is now due? Investment in questionable high yield monetary devices? Questionable acquisitions?
For both people and companies I would like to know a LOT more specifics about WHY they constantly NEED to borrow.
- Trained philosopher, not economist (quants suck)
Hi, Marc,
That is, you might say, an awfully long story.
I'd rather see the economy based on personal consumption rather than, say, the construction of pyramids or conquering all the neighbors or some of the other choices that societies have made through history.
Leaving aside the question of whether you'd rather get a mortgage to live in a house while you buy it, instead of saving for it for 20 years and buying in cash, let's talk a bit about credit for institutions. The state of California gets more tax revenue in the spring than the fall. To smooth this out, they usually borrow in the fall to anticipate some of the excess, and pay it back in the spring. Credit to smooth seasonality is extremely common in farming--you can borrow to buy seeds, or other annual supplies, and pay back when the crop comes in.
And where would I be if companies didn't make questionable acquisitions?
That is, you might say, an awfully long story.
I'd rather see the economy based on personal consumption rather than, say, the construction of pyramids or conquering all the neighbors or some of the other choices that societies have made through history.
Leaving aside the question of whether you'd rather get a mortgage to live in a house while you buy it, instead of saving for it for 20 years and buying in cash, let's talk a bit about credit for institutions. The state of California gets more tax revenue in the spring than the fall. To smooth this out, they usually borrow in the fall to anticipate some of the excess, and pay it back in the spring. Credit to smooth seasonality is extremely common in farming--you can borrow to buy seeds, or other annual supplies, and pay back when the crop comes in.
And where would I be if companies didn't make questionable acquisitions?
The NYT has a set of graphics to help monitor the credit markets that might be useful: http://www.nytimes.com/interactive/2008/10/08/business/economy/20081008-credit-chart-graphic.html
Link.
Link.
More for Marc--
Whatever the 'correct' level of credit use and the right purposes of it in the economy, if we decide suddenly to use a whole lot less of it the inevitable outcome will be a lot of people out of work, out of their life savings, out of luck. And that 'decide' may just be a collective lurch in one direction.
Whatever the 'correct' level of credit use and the right purposes of it in the economy, if we decide suddenly to use a whole lot less of it the inevitable outcome will be a lot of people out of work, out of their life savings, out of luck. And that 'decide' may just be a collective lurch in one direction.
Cole Kendall
Cole Kendall
Would you pay for everything in cash, getting your weekly salary in cash? Or would it be a bit easier to be able to move money around electronically, earning a bit of interest when you do not need it?
It was not that long ago when most Americans did not have bank/checking accounts (the first credit cards that could be used out of state were in the late 1950s if I recall correctly) and mortgages in some places required a 50% down payment and then gave you ten years to repay. I find life much easier with an ATM and VISA card (no balance, please) and the modern payment system where someone else uses my cash and pays me a little for the privilege.
Cole
It was not that long ago when most Americans did not have bank/checking accounts (the first credit cards that could be used out of state were in the late 1950s if I recall correctly) and mortgages in some places required a 50% down payment and then gave you ten years to repay. I find life much easier with an ATM and VISA card (no balance, please) and the modern payment system where someone else uses my cash and pays me a little for the privilege.
Cole