Rolling US Economy Into The Shitbin Thread

haw

everybody wants to live in the end times

even I don't believe suburbanites are going to rise up. that's crazy talk

like, the suburban and exurban folks losing so much that they start a revolution because of this is like people saying microsoft is going to go out of business because everybody hates vista and the xbox is a money pit

even I don't believe suburbanites are going to rise up. that's crazy talk

-- El Tomboto, Friday, March 21, 2008 12:45 AM

this is heartening somehow

When it comes to the economy the suburban people, as they say, wouldn't know how to pour pee out of a boot if the instructions were written on the heel. They'd be just as likely to blame illegal immigrants, or too-high taxes on business.

haha yeah democracy and its attendant myths are also a good hedge against uprisings. of course everyone probably said exactly that about feudalism too

barry's column in esquire is pretty much why I love him: http://www.esquire.com/the-side/opinion/dont-fear-bear-stearns

You're supposed to raise your standard of living by working harder, being clever, earning more income -- not by using your long-term savings. And now this current generation is pretty much fucked. When push comes to shove and they go to take money out of their houses at retirement time, they’re going to find out that there ain’t a whole lot there. They better pray that Social Security is still around in 20 years -– not exactly a sure thing.

plus the fact that as a dude who runs his own firm in downtown manhattan and rolls out on the weekends to mcfuckin' richdude town, he still posts excitedly when he gets a great deal on some gadget - "Hey guys I found this 7.2 megapixel camera for only $174!!" total money nerd bro

they won't rise up, but I wonder what it'd take for a mortgage strike. Rent strikes weren't that long ago, after all.

It's important not to conflate well-grounded economic chicken littlism with grab-bag political nutso fantasizing

actually I'm not really sure why that's important at this point

lol

My workplace automatically enrolls us in some sort of mandatory-contribution pension, but the 401K/or whatever variation thereof, is optional. I requested information, but it seems I had to pick the stocks myself, rather than just sit back and let them do it for me. They don't match, so is it worth it to even do it?

There are probably tax benefits, although I don't know if they're better than IRA or ROTH IRA accounts - you should probably ask the benefits person about that. I'd also guess you have options besides just straight stock-picking. I don't know a lot about it because my job doesn't offer any kind of 401k. But if you can, you're probably better off with mutual funds or indexes than trying to pick stocks.

I've never heard of a 401K plan where you straight up picked stocks instead of funds (and company shares). Look at the pension plan, think about what you'll need or want when you retire that the pension doesn't cover, then whip out a calculator or use any of dozens of free online retirement calculators to figure out what kind of percentage you ought to be putting away. When I select for my 401K contribs I go 50% fixed income/bond backed funds, 30% indices (like S&P 500 or dj small cap index) and 20% "growth" funds. Probably nothing wrong with 100% fixed/bond backed, I just like to tinker with everything.

the tax benefit is the same as a regular IRA in terms of effectively deferring taxes until you withdraw

http://en.wikipedia.org/wiki/401(k)_IRA_matrix

there are some 401(k)s that have a brokerage option, where you can buy individual securities or non-plan mutual funds or ETFs. mine doesn't, though, and i wish that it did b/c some of the fund offerings are pretty shitty.

also, i would take the roth 401(k) if it is offered -- b/c distributions will be tax free when they are made (absent some future congressional tinkering). it does hurt your paycheck, though, b/c contributions are post-tax.

pfft I don't need that many choices, I'd spend all day trying to allocate

and the equivalent of a "mortgage strike" is called "jingle mail" -- i.e., when one realizes that the "flip that house!" nonsense isn't gonna work any more and the house is worth less than the mortgage, and one just mails back the keys to the McMansion or the luxury condo to the mortgage processor.

I prefer the extra liquidity now over the roth stuff.
I know that my overall effective tax rate in 2042 will be in all likelihood quite a bit higher than 19.82% but by 2042 I will probably just be a brain in a jar anyway

http://news.yahoo.com/s/ap/20080321/ap_on_bi_ge/living_with_parents

see, back in the day, that wouldn't even be an issue, because by the time you're fifty your parents are supposed to be well and dead or so close to it you're moving in anyway

This sort of talk:

Parents "jeopardize their financial freedom by continuing to subsidize their children," said Karin Maloney Stifler, a financial planner in Hudson, Ohio, and a board member of the Financial Planning Association. "We have a hard time saying no as a culture to our children, and they keep asking for more."

makes me feel a bit icky. If anything, I think our culture prizes financial independence from family way more than others. Sure no parents should indulge a deadbeat child forever, butI think it's worth risking your blessed "financial freedom" a little to help a loved one in hard times.

The Stifler family making a mark once again.

There is, or should be, no shame in moving back with family, and there is no real financial pain for the parents in taking a child back in. although the article talks about subsidizing lifestyle as well as having them back home, not so sure about that

there has been massive wealth transference from young to old, it is no surprise this is happening

this article is not so bad, compared to the ones we have in the uk. the current vogueish articles are about 'the bank of Mum and Dad'. you would think that these articles would be about feckless children sponging off parents, but no! The Bank of Mum and Dad is being presented by the media as a viable and positive way to replace banks that will no longer lend!!! last gasps of the ponzi scheme over here

http://property.timesonline.co.uk/tol/life_and_style/property/article3590383.ece

believe it or not, The Times is a respected newspaper in the UK

Getting help from anyone is the ultimate libertarian sin (and probably the most common shameful libertarian secret)

Oh, it's probably funds, then, not stocks, but I thought there would be an option to pick A (high risk), B (mid risk), or C (low risk), for people who can't be bothered to do all the homework.

there are, but you kind of have to know the code.

they should have the morningstar boxes for everything though, that's usually pretty good at clearing things up

lol

OIL PRICE UNCERTAINTY

NEWS
Oil sets fresh record above $109
Oil hits record at $108 a barrel
Oil rises past $105-a-barrel mark
Oil soars to new high above $104

they should have the morningstar boxes for everything though, that's usually pretty good at clearing things up

-- El Tomboto, Sunday, March 23, 2008 9:21 PM (Yesterday) Bookmark Link

So you're saying veggie burgers are the next growth area.

hurr hurr

this is neat:

http://calculatedrisk.blogspot.com/2008/03/japans-financial-services-minister-has.html

nothing wrong w/our economy cant be fix by a little redistribution or wealth

http://www.variety.com/VR1117982907.html

of of of wealth

rolling Iceland into the shitbin now:

Fears that Iceland could be the first country to fall victim of the global financial turmoil grew yesterday when its central bank abruptly increased interest rates 1.25 percentage points to 15 per cent in an attempt to restore confidence in its struggling currency and stave off a full- blown economic crisis.

ATA files for bankruptcy; 2200 people unemployed overnight; Google acquires Doubleclick at too-high price, lays off 300

If you haven't already enjoyed about as much of this as you can stand, today's Fresh Air was one of the best explanations I've heard of the current financial crisis:

http://www.npr.org/templates/story/story.php?storyId=89338743&ft=1&f=13

http://www.economagic.com/em-cgi/data.exe/fedstl/exszus+2

destruction of the US dollar since 1971

1971: $1 bought you 4.3 swiss francs
1981: $1 bought you 2.1 swiss francs
1991: $1 bought you 1.5 swiss francs
2001: $1 bought you 1.7 swiss francs

this time last year it bought you 1.2 swiss francs

now it buys you a swiss franc

I'm not convinced the CHF is by any means immune from everything right now (esp with UBS stuff going on) but it will be interesting to see how the $ fares against it over the next couple of years

http://farm3.static.flickr.com/2399/2388931511_bb89b35e6d_o.gif

its more dramatic over the last 40 but here it is since dotcom crash

The Swiss franc is kind of an odd currency. Deprecation of the USD against the franc is probably just because Swiss inflation has historically been really low.

Agreed, but isn't what makes it a good benchmark to measure against?

better to measure against countries we do more trade with, I would think?

The price of oil has actually fallen considerably against Picassos.

that chart is worthless

I don't have any data, but I would kind of assume that the GBP, Euro/Euro precursor currencies have all fallen against the Swiss franc post-Bretton Woods.

Oh, yes, from that perspective agreed. I meant as a measure of depreciation of a currency (maybe this is why people wanted swiss bank accounts!) - though you are right, comparable currencies over the long term have probably weakend at similar rate to dollar

Agree with Circles there

What didn't you like about the chart Don? (just thought it would make a change from charts of dollar vs gold is all!)