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Happy Economic Collapse Day

  1. Sep 14, 2009 #1

    Ivan Seeking

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    One year ago this week, the failure of the banking and investment systems turned the global economy upside down.

    Apparently we define the beginning of the collapse to be the failure of Lehman Brothers. IIRC, by this time, Fannie and Freddie had already been bailed out.

    Late edit: Okay, Freddie and Fannie were nationalized on Sept 7th, 2008.
     
    Last edited: Sep 14, 2009
  2. jcsd
  3. Sep 14, 2009 #2

    Ivan Seeking

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    Here is a great video that documents the failure of the system.

    http://www.pbs.org/wgbh/pages/frontline/meltdown/view/
     
  4. Sep 14, 2009 #3
    1st birthday?

    I'll get the jelly and icecream.
     
  5. Sep 14, 2009 #4
    Hopefully the job market picks up.. My employer is in the black and making a profit but from my perspective its only because they've reduced employee benefits & raises to nothing this year..

    Work harder for less money when you factor in inflation and cost of living. iiiit burrrns
     
  6. Sep 14, 2009 #5
    Hopefully Obama will set things straight.
     
  7. Sep 14, 2009 #6

    BobG

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    Are you sure about that? Factoring in inflation and cost of living, maintaining the same salary gives you more purchasing power than you had a year ago. Or pretty close to it.

    The Consumer Price Index peaked at about 220 in July 2008. As of July 2009, the CPI was still in the 215's, although increasing again, as it historically has. So, technically, there's a good chance the CPI is equal to last year's or even slightly higher than last year. Or, at least about to be higher. The CPI was around 219 in Sep 2008, but had fallen to 210 by Dec 2008.

    Your pay is still in about the same place it was relative to prices as it was last year, though. In fact, inflation from Jul 2007 to Jul 2008 was kind of high. It wouldn't be a shock if it took until Jul 2010 to reach 220 again (although I would at least be surprised).
     
    Last edited: Sep 14, 2009
  8. Sep 14, 2009 #7
    Hopefully, but you can't lift a bucket you're standing in, you can just make it pop up and down.

    I didn't realize it had been a year.

    My father-in-law, a retired banker, predicted this economic disaster pointing to the shoddy mortgage practices going on in the lending market. He said months before it happened, that the crash was coming and it will be big.

    Currently, we are working 32 hour weeks with a reduction in benefits (employee pays for spouse coverage), and I haven't seen a raise in several years. I'm making less than I did 20 years ago.
     
  9. Sep 14, 2009 #8

    Ivan Seeking

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    You are forgetting about his extraordinarily large ears.

    The last year was pretty rough, but last month was I think the second best I've ever had in eleven years. This may be unique to a recent set of deals made rather than the general state of the economy, but in the end I see people spending money.
     
    Last edited: Sep 14, 2009
  10. Sep 14, 2009 #9

    BobG

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    People lift a bucket they're standing in with hot air all the time. In some parts, they even proclaim you a wizard for that sort of thing.
     
  11. Sep 14, 2009 #10
    I agree with some of his programs, especially the energy efficient design incentives. These are very smart use of public money. I'm taking advantage of some of these by putting in a solar electric system at my house (state tax rebate backed by federal funds and uncapped 30% tax credit on the full amount after the state rebate). These types of improvements bring work to designers, installers, manufacturers; give money to financial institutions who fund the projects; reduce our energy footprint; saves money for the owners, which can get invested or spent to further aid the economy; reduces the burden on public utilities to build more generating facilities; reduces greenhouse gases; and returns some money to the government in the form of income taxes and sales taxes.
     
  12. Sep 14, 2009 #11

    Ivan Seeking

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    According to many experts, we well might have been in the midst of a great depression by now. According to some of the most knowledgeable folks, we were on a near certain path to an inescapable deflationary spiral.

    Other folks would rather discuss it by the bucketful. :tongue2:
     
    Last edited: Sep 14, 2009
  13. Sep 14, 2009 #12
    Cash in Cash out, i'm much worse off this year than i was last year even after reducing my voluntary expenses (canceled cable tv, canceled pest control, canceled all magazine subscriptions, canceled club memberships, canceled aopa membership, canceled our family vacation..)

    PP&L alone is going to break a lot of people with their 40% rate increase come January 1st.. i'm already balanced billed at 240.. Thats adding 1200/year in expenses for the same service :(

    Sure, if you scale in the fact its cheaper to eat at mc donalds than to cook a family of 4 a healthy meal prices may seem to be stable but i'm not sure that reflects reality.

    All the meanwhile i try not to remind myself that my mortgage is paying for a net loss 105k value in the house.. sure that equity/value may be made up over the years but it doesn't add anything to the piece of mind of having an option to move for a better job or more affordable living. I'd have to claim bankruptcy today to do what i could have done a year and a half ago at least by breaking even. No way you can sustain 105-110k loss on a house and make it somewhere else.

    edit:

    I actually feel like a lucky one though.. at least i purchased a house with physical property (2 acres) and a great view of farms and hillside that is preserved.. those poor saps that bought big box houses that look a purdy inside for 399k that don't even own the lot it sits upon got BURNED with - 200k valuations.. so i do so more benefit in just the value of my lot. .all is not lost if i stay firm.. its just the burden of it all that is hard to live through when the improvements tot he economy are few and far between and the options/alternatives are out of reach without going through a cataclysmic event of bankruptcy or sheer luck
     
    Last edited by a moderator: Sep 14, 2009
  14. Sep 14, 2009 #13

    russ_watters

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    Shouldn't we call it "Almost Economic Collapse Day" since according to the PBS quote, it didn't collapse but only almsot collapsed?
     
  15. Sep 14, 2009 #14
    Freddie and Fannie have always been nationalized. They were created by Congress, and have never been allowed full autonomy. That would have made it difficult to run back to Congress every time they needed or wanted a favor.

    KM
     
  16. Sep 14, 2009 #15
    :rofl:
     
  17. Sep 14, 2009 #16
    Don't worry, the printing presses will guarantee inflation.
     
  18. Sep 14, 2009 #17
  19. Sep 14, 2009 #18
    The investment bankers already have a new product to replace sub prime mortgages.

    http://www.nytimes.com/2009/09/06/business/06insurance.html

    There is a bit of irony here. The investment banks were the reason that many older people lost retirement funds. IMHO it seems that people who have lost their retirement funds would be the people who would be most likely to need to sell their life insurance policies.

    Talk about a pull the plug on grandma situation. There are now entities who will have a motive. As far as being ghoulish this ranks right up there with the dead peasant insurance policies.
     
  20. Sep 15, 2009 #19
    If you compare the cash infusion into Freddie and Fannie, isn't that much much smaller than than the cash infusion into the private sector?

    Oddly enough its still the private sector running to congress today ;)
     
  21. Sep 15, 2009 #20
    Unlike food, water, shelter, and medical care - it's said you can never have enough money. As long as they're offering to hand it out, someone will take it.

    There is one thing about the events of the past year that absolutely infuriates me. I think the person responsible for spending tax payer funds on road side signage telling us tax payer funds are being spent should be suspended for a period of 8 hours (1 day shift) from each of those hundreds of signs - or allowed to pay the funds back from his own pocket.
     
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