How are you preparing for the worst economic recession in 30 years?

[Pythagorean]

I doubt the world economy will collapse and everything will go to hell. That is unless aliens attack our planet. But even that might unite us under a single non-monetary federation in order to defeat the aliens. Unless the destruction of the economy is the first step in the alien's plan. Perhaps Obama is an alien and the aliens are planning to take the world down from the inside. It took WWII to bring us out of the great depression so it seems fitting that WWIII would get us out of this "credit crunch". And since Germany has been put in their place many times there are no totalitarian countries to fight on a world war scale. So I guess WWIII will have to be fought against aliens in order to solve the economic crisis. This is all of course assuming aliens exist. Not only must they exist but we also must be able to find them, along with their flying saucers too. But if aliens do exist than we can certainly end the economic crisis. So we can simply solve the economic crisis by finding aliens. I think I have been grading lab reports for to long.

Well, everything going to hell is a bit dramatic, but I won't be surprised if a lot of people experience significant suffering in the next decade. I don't think it matters who steers the economy either, it's more a force of nature (specifically, human nature... one of the more complex 'natures'). The bubble has popped, we have a lot of making up to do for all that time we thought we were a rich country. Things like bailouts will suspend the inevitable and perhaps make them more drastic.

Economic crashes can be modeled as an SOC system. In general, small scale events happen a lot and large-scale events don't happen very often. Other examples of SOC systems are forest fires and earthquakes.

One consequence of SOC systems is that the more you try to inhibit the smaller-scale events, the more of a build-up you create for the larger scale events.

For instance, with the example of forest fires, by putting out the smaller and medium size fires, we leave a bunch of half-burned brush behind, allowing a nice primer for the next forest fire to get a faster head start.

In risk-assessment, if we design a bunch of protocol for all the little problems so that employers will know what to do, line by line, they're not going to do when something big hits that isn't in their book of protocols. This has been a criticism of NASA (and the US in general).

Bailouts are basically putting the smaller-scale fires out and/or focusing on the smaller failures that are all hinting at a much larger failure.

The best thing to do would be to just let go and let the market crash, but that's like trying to burn your slit throat with a cigarette lighter. Even if it will cauterize the wound and save you from bleeding to death, it's going to hurt like hell.

heh, that turned into more of a rant than I intended, my apologies (as I click the 'submit reply' button)

 

[neu]

I've already stocked up on some non-perishable foods, call me an extremist

You're an extremist.

I've decided to stop reading the papers and carry on regardless.

 

[Monique]

I've decided to stop reading the papers and carry on regardless.

So you're going for the ostridge approach.

 

[neu]

So you're going for the ostridge approach.

Yeah. I also eat a lot of non-perishable food but this is coincidental; I just happen to shop at Lidl.

 

[Ivan Seeking]

Bailouts are basically putting the smaller-scale fires out and/or focusing on the smaller failures that are all hinting at a much larger failure.

Maybe, or maybe there is no logic in allowing chaos to govern economics. Allegedly we understand why the crash in '29 had such devestating consequences. And in fact we ended up doing much of what we have done recently to avert a credit collapse, but we waited three years before beginning to act. In other words, it is alleged that the worst of the great depression was avoidable.

Likewise, I know that auto accidents will happen and people will die, but I still choose to wear my seatbelt. I may not always be able to avoid a crash, but I can act to minimize the consequences.

In order to prepare... well, we have been preparing for a couple of years now. We keep debt to a minimum and live within our means. And we are always prepared for a crisis - food, and yes, weapons. Having grown up in LA, that's a no-brainer. The events following Katrina were a painful reminder of how bad things can get.

 

[BobG]

The best thing to do would be to just let go and let the market crash, but that's like trying to burn your slit throat with a cigarette lighter. Even if it will cauterize the wound and save you from bleeding to death, it's going to hurt like hell.

Vivid analogy, but ...

A slit throat is only a problem if the either a carotid artery or a jugular veins have been severed. Cauterizing the ends of the severed blood vessels will stop the bleeding, but won't that also cause a few other problems besides pain?

Unless you're a hockey player (Zednik stable after carotid artery severed in Panthers-Sabres game)

I'm not sure how they go about repairing severed arteries and veins, but it seems like cauterizing them would make the repair a lot more difficult. Interesting piece on the severity of severing body parts (http://www.classicalfencing.com/articles/bloody.php)

 

[OmCheeto]

Oh my. The company I work for appears to be preparing by going to an internal bartering system:

I hope they don't start paying us in pens and pencils.

 

[redargon]

We keep debt to a minimum and live within our means.

Bingo!

you should keep debt to a minimum and live within your means all the time, not just in a crisis. Doing anything else is like asking for financial problems. But hey, everyone likes to drive a new car and have a big house and have all the niceities of the 21st century, though few can actually afford them. A lot of the reason this crisis affects everyone so much is that they have debt and try to borrow more than they can afford.

I'm not sure I agree so much with the weapons Ivan, but each to his own I guess. Desperate people may try desperate things to get food in bad times, but I don't think shooting them is the answer.

 

[OmCheeto]

I'm not sure I agree so much with the weapons Ivan, but each to his own I guess. Desperate people may try desperate things to get food in bad times, but I don't think shooting them is the answer.

I don't have a problem with the idea. And you never know, they might taste like chicken. yummie. crackhead rump roast in the oven. and their bones when ground up will be very good for the lawn. and real skulls for halloween. that would be cool. especially if you killed them yourself. you'd have total bragging rights amongst your beer buddies.

Anyone else watch Sin City? I saw it for the first time last weekend. Kind of a cool movie, in a psychopathic kind of way.

 

[Pythagorean]

Vivid analogy, but ...

A slit throat is only a problem if the either a carotid artery or a jugular veins have been severed. Cauterizing the ends of the severed blood vessels will stop the bleeding, but won't that also cause a few other problems besides pain?

haha, good point.

If you're very careful and you use a precision laser, you might be able to pull it off amidst the gushing blood.

 

[Ivan Seeking]

I'm not sure I agree so much with the weapons Ivan, but each to his own I guess. Desperate people may try desperate things to get food in bad times, but I don't think shooting them is the answer.

I would never shoot someone unless they pose a direct threat my life [our lives].

Never underestimate the animal in the human. There are plenty of people out there who will kill for a few bucks; or just for kicks.

As for keeping debt to a minimum, there is frivolous spending, but also long-term objectives. We had inteneded to do a major remodel. We are also planning to build some new homes on our property as a part of our retirement plans. But all of these plans were put on hold and we decided to sit tight for now rather than acquiring significant debt. But we have also put off buying a new car, which would be more a frivolous purchase. Course now is a probably a great time to get a deal on a new car.

 

[turbo]

I would never shoot someone unless they pose a direct threat my life [our lives].

Never underestimate the animal in the human. There are plenty of people out there who will kill for a few bucks.

Same here. I tend to use large-caliber weapons, though (10mm Auto pistol, .45-70 rifle) so the exchange will be pretty one-sided if we are attacked. Mainers are not going to go rogue, though.

 

[Pythagorean]

Maybe, or maybe there is no logic in allowing chaos to govern economics. Allegedly we understand why the crash in '29 had such devestating consequences. And in fact we ended up doing much of what we have done recently to avert a credit collapse, but we waited three years before beginning to act. In other words, it is alleged that the worst of the great depression was avoidable.

Likewise, I know that auto accidents will happen and people will die, but I still choose to wear my seatbelt. I may not always be able to avoid a crash, but I can act to minimize the consequences.

In order to prepare... well, we have been preparing for a couple of years now. We keep debt to a minimum and live within our means. And we are always prepared for a crisis - food, and yes, weapons. Having grown up in LA, that's a no-brainer. The events following Katrina were a painful reminder of how bad things can get.

Well, chaos doesn't necessarily mean that we don't understand why something happened. It has more to do with the linearity of the differential equation governing the system.

We generally know how forest fires start too, but there's no economically viable prevention for them. But the important point here is that maybe we shouldn't be preventing natural forest fires. Maybe there's no reason to try and prevent and economic meltdown either.

Of course, you and me should take precautions to protect ourselves on an individual level, but the collective economy is a beast with momentum; it's my opinion that no amount of policy or administration is going to stop it. It's driven by human emotion more than anything!

 

[Ms Music]

Anyone purchase gold or silver? I have contemplated it, but am not certain yet if I should do it...

 

[turbo]

Anyone purchase gold or silver? I have contemplated it, but am not certain yet if I should do it...

They are at a HUGE premium now. If you had bought them as a hedge when things were just ducky (or at least appeared so) you would be doing fine now. Buying them now would lock in losses that would accrue when stocks and real estate start to recover.

 

[turbo]

Anyone purchase gold or silver? I have contemplated it, but am not certain yet if I should do it...

If you have the opportunity to buy some real estate (undeveloped land subject to low tax rates), this would be a good time to load up. In general, real estate is not being "created" like other investment opportunities. It is rather stable, and can help you ride out short-term fluctuations in market prices. It also appreciates pretty reliably in most markets over the long term.

 

[Ms Music]

I actually AM doing real estate... Thanks for the reinforcement that NOW is not the time for gold. That is why I haven't done it.

But now as long as there is a mortgage company around to get my loan when I am ready...

 

[BobG]

I actually AM doing real estate... Thanks for the reinforcement that NOW is not the time for gold. That is why I haven't done it.

But now as long as there is a mortgage company around to get my loan when I am ready...

I think the real estate market is officially dead. The Empire State Building sold last week for $10. Surely, your house is worth less than that. (http://multimedia.nydailynews.com//pdf/2008/12/02/DeedofSalePage1.pdf ). It's official. It was filed with the city register and they accepted it. I think I know the witness to the transaction - her name sounds familiar (see page 2). In fact, I might have used that same notary - his name sounds familiar for some reason (also on page 2).

That deed was filed by a newspaper to show how easy it is to steal someone's house. You 'buy' the house, then take out a mortgage from the bank. Then you disappear with the money and the bank forecloses on the house - much to the shock of whoever happens to be living there. (http://www.nydailynews.com/money/2008/12/02/2008-12-02_dead_man_gets_mortgage_worth_whopping_53.html)

I suspect the mortgage crisis will put a serious dent in the lifestyles of house thieves. It's going to be harder to get a mortgage and probably at a higher interest rate if they do get one - oh, wait, they don't need to worry about a high interest rate.

 

[physics girl phd]

I've already stocked up on some non-perishable foods, call me an extremist

You must not live with three guys... Stocking up? Doesn't happen. They just eat more!
However, since my husband's a bit of a large man, I said at least he'd fed me and the boys for a while.

 

[Monique]

You must not live with three guys... Stocking up? Doesn't happen. They just eat more!
However, since my husband's a bit of a large man, I said at least he'd fed me and the boys for a while.

I live with one hungry guy and I've learned a long time ago to either not buy tasty stuff or hide it really well (he's caught me a few times secretly eating chocolates that I had hidden ).

In this case I just bought stuff that takes quite a bit of time to become tasty: mainly large bags of lentils and dried beans and some bottles of spicy chutney

 

[BobG]

You must not live with three guys... Stocking up? Doesn't happen. They just eat more!
However, since my husband's a bit of a large man, I said at least he'd fed me and the boys for a while.

Did you ever read about the siege of Leningrad? That has to be the most depressing battle ever. The civilians in the city were all too skinny to be worth eating, so the women would try to lure the Soviet soldiers defending the city somewhere private so they could kill them for food.

Just something to keep in mind once all of the pets and squirrels are gone.

 

[turbo]

If you want to read a gruesome tale, Google on "Essex" (ship name) and "Mocha Dick" (the original murderous sperm whale that inspired Melville).

 

[Jimmy Snyder]

However, since my husband's a bit of a large man, I said at least he'd fed me and the boys for a while.

How nice for you. Few husbands help out in the kitchen these days. And yet I hear they make an excellent ragout when properly prepared.

 

[Ivan Seeking]

Well, chaos doesn't necessarily mean that we don't understand why something happened. It has more to do with the linearity of the differential equation governing the system.

I was talking about allowing a system to run amok, as opposed to intervention.

Of course, you and me should take precautions to protect ourselves on an individual level, but the collective economy is a beast with momentum; it's my opinion that no amount of policy or administration is going to stop it. It's driven by human emotion more than anything!

Why do you assume this? We have seen one example after another of how people manipulated the system and caused the crisis.

You feel that we might understand the deepest secrets of nature through science, but economics is fundamentally beyond our capacity for understanding; that we will always be beasts in the wilderness?

 

[Pythagorean]

I was talking about allowing a system to run amok, as opposed to intervention.
Why do you assume this? We have seen one example after another of how people manipulated the system and caused the crisis.

You feel that we might understand the deepest secrets of nature through science, but economics is fundamentally beyond our capacity for understanding; that we will always be beasts in the wilderness?

Take a moment to think about the experimental process and how you'd do that in economy (where scale changes everything) without screwing the economy up with a bad guess.

Economists are forces to pick equations for their beauty and elegance (believe it or not this is a dominant factor where empirical evidence is lacking)

I don't think we'll forever be beasts in the wilderness.. I just think economy is wayyyy less developed and understood (after all, it's much younger than physical laws).

Those people that manipulated the system weren't trying to bring the whole thing down. They were manipulating little parts of it for their benefit; they had no direct control over the repercussions of the whole global system.

 

[OmCheeto]

I just think economy is wayyyy less developed and understood (after all, it's much younger than physical laws).

I just learned last year that "Economics" is a social science.
I always assumed it was some glorified field of accounting.

But I'm preparing for this recession by spending my money faster than I ever did before.
I seem to recollect, from my economics classes of old, that the velocity of money was somehow important to the economy.

Apparently, the correct answer to the test was really to put your pennies in the bank, as fast as possible, as long as they do not exceed a value of $100,000(FDIC insured), etc, etc.

 

[turbo]

But I'm preparing for this recession by spending my money faster than I ever did before.

My wife and I saved and conserved all our lives and about 3 years ago we saw bad fiscal times coming, and bought a very small log house with wood heat and a great garden spot, and sold our too-big house in a development in the county seat. To "continue our preparations", today, I wrote a check from a money-market account for a new 2009 Subaru Forester. My old Nissan 4x4 is like a roller-skate when it gets icy and my wife insisted that I needed a new ride, so she had less chance of losing me during winter storms. I'm keeping that old PU for dump-runs, picking up manure for the garden, etc, but it's now looking more and more like a farm vehicle.

I bought a Forester because I had talked my father into cashing in a CD that he was saving for us kids, to buy a decent vehicle to replace the old GM beaters that had been nickel-and-diming him to death. In the two weeks since he's been driving that Forester (with auto transmission to save clutching with arthritic knees), he convinced my wife that I needed one, too. It's a small investment to end the nagging. My father is a month away from turning 83, and has been a die-hard US-made car consumer. Now he can't shut up about Subaru, and he's got his friends and neighbors test-driving his new rig and kicking tires. In all his life he can recall owning 19-20 vehicles, and he swears that none of them has been anywhere near as good as this one.

If you've been debt-free for long enough to save and accumulate some money, the financial market will pay you VERY little interest on it. Buy something nice during the depressed retail market. As Don Henley said "ain't no hearses with luggage racks".

 

[OmCheeto]

Buy something nice during the depressed retail market. As Don Henley said "ain't no hearses with luggage racks".

As a Bohemian, I've always done that.

My friends all thought I was suicidal when I was 30-something.

I tried to explain to them that it wasn't that I didn't enjoy life, it was that I'd lived 20 lifetimes in about 3 years. They still don't understand. I'm all for throwing the old people under the bus at this point.

As long as you don't run up onto the sidewalk to get me, that is.

Gads. I love life.

:!)

 

[turbo]

Om, I have endured brutal hours in construction, even more brutal hours in pulp and paper, including rotating shifts that can turn you into a zombie. I busted out to work as a consultant, to find that working day-shifts every day really sucks when you're 1500 miles away too many weeks a year (even one was too much). I found a job as a network administrator for a large ophthalmic practice, and when the my severe reactions to perfumes, colognes, body-washes, after-shaves, etc got debilitating (asthma, severe headaches, sleep deprivation) I had to find another job. Even that new job (with specific promises of accommodation) turned out to be problematic, with some "preferred" people able to violate the policy at will. Actually, the "preferred" person was an older woman with whom the owner had had a "special" relationship when he was divorced from the mother of his two sons.

 

[OmCheeto]

Om, I have endured brutal hours in construction, even more brutal hours in pulp and paper, including rotating shifts that can turn you into a zombie. I busted out to work as a consultant, to find that working day-shifts every day really sucks when you're 1500 miles away too many weeks a year (even one was too much). I found a job as a network administrator for a large ophthalmic practice, and when the my severe reactions to perfumes, colognes, body-washes, after-shaves, etc got debilitating (asthma, severe headaches, sleep deprivation) I had to find another job. Even that new job (with specific promises of accommodation) turned out to be problematic, with some "preferred" people able to violate the policy at will. Actually, the "preferred" person was an older woman with whom the owner had had a "special" relationship when he was divorced from the mother of his two sons.

I remember rotating shifts. 8 on, 8 off, 8 on, 8 off.

For months on end, 7 days a week...

I was always amazed that I somehow, in a zombie state of mind, managed to find a pair of socks and underwear that did not salute me when I tossed them to the floor.



Oh the good old days.