The Economy And You

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The Economy And You

Postby An Adam » Sun Nov 09, 2008 2:39 am

Not sure if you heard, but this country is in what's thought to be an economic crisis of sorts. So I ask you, how have YOU been effected?

Me? I spend 45 dollars less a week on gas than I did last week. I have an extra 2300 bucks in my pocket this year due to this "recession."

That's almost 4 months of mortgage payments, or 33% of my yearly commitment to a bank who can't manage their money. It's also the most valuable thing I own. It's not worth what it was in 2004 (hurricane's fucked our market), but it's still enough that I can leverage what I need out of it.

My 401k is in the toilet, but if you haven't noticed I'm not a senior citizen. I have 35 years for that to rebound...but I've also got 25 of those where I won't have a mortgage payment so I can make that back.

Now, we are taking losses: we're making less dividend income from our stocks, which blows. I think they've fallen somewhere in the 100 a month range, or will when the next set comes. So I've lost 1200 dollars in stock money over a year.

You know what? The Government gave me a check for 1200 earlier this year, so that washes.

The stocks are worth less now, much less. But again, that value wasn't something I was seeing as we aren't big buyers/sellers, we're just letting it sit.

I'm paying more at the grocery store, but donna and I are both pretty lazy, so we end up eating out ALOT. Restaurants are hurting so they're offering all kinds of discounts and deals, so I'm really not spending THAT much more - almost a wash.

So ask yourself, do you have more in your pocket today than you did this summer when you were dumping that money into your gas tank?

What you're seeing is not a recession, what you're seeing is a SUPPLY RECESSION. There's 2 sides to every financial transaction - if you spend a dollar, that means someone else gets it, right? Your bank doesn't treat a 100 dollar check you write the same as one you deposit, does it? No, one makes your balance go up, one makes it go down.

Every dollar of yours is starting to buy more of something. It'll take a while, but instead of coke being 4 12-packs for 12 dollars, it'll be back to 10 dollars. I'll be making the same amount of money, but getting more with it....

Recession, the act of Receding. What's receding? PRICES!

Sure, if you own Coke, you're PISSED that I'm paying less for it. If you own the restaurant, you're pissed. Some people might even lose their jobs with the restaurant or with coke.

The restaurant might even close... you know why? Because they weren't good enough of a restaurant for people to choose them over something else. That happens. It means whoever owned it needed to own something different, or work for someone else. It's a lesson that he or she didn't have the right skills for what they were doing, and they should learn, not bitch. I didn't lose my job and won't lose my job - my skills and abilities are limited among the general populace.

It is not an economic crisis that you and I are in... it's motherfucking thanksgiving. You know who's getting buttfucked? Some Sand Person in Saudi. Some executive in New York. A Broker in Miami. I have MORE money. It's the demand-side correction that had to happen to put prices into check and create a stable place for the economy.

"We're cutting interest rates!" You know what that means? "Please, we're having a sale, come owe us more money!" We're going to give you a small amount today so that you can get something you want NOW NOW NOW. In return, you give us MORE MONEY! MORE MORE! MORE!

So don't buy that shit about "recession" "crash" "depression" and people that lose jobs do so because they weren't doing a job that people wanted, or weren't good enough at doing it.
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Re: The Economy And You

Postby thelaird » Sun Nov 09, 2008 4:01 am

The Adam wrote:Recession, the act of Receding. What's receding? PRICES!


That sounds all well and good except that deflation is far, far worse than inflation.
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Re: The Economy And You

Postby An Adam » Sun Nov 09, 2008 4:26 am

but it's the only control for inflation that gets out of whack.
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Re: The Economy And You

Postby thelaird » Sun Nov 09, 2008 4:52 am

1) not really
2) and it's not like our inflation is out of whack
3) and looking even closer at your post, your view of how the economy works is very misguided.
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Re: The Economy And You

Postby An Adam » Sun Nov 09, 2008 4:00 pm

Gas prices doubled in the course of a year - you're telling me that rampant inflation didn't take place? Where 3% is reasonable, we're talking 100%. I'd say that was rampant. I'd say it's corrected.

My view of the economy is a pure supply and demand look. Where as your Reaganomics believers are all about supply-side, and your hardcore left is all demand side, there's simply no evidence that either one of them in a vacuum work for long term benefit of the consumer - the collective that ultimately determines what the economy does.

However, let's go back and look at some deflated markets and whether or not they operated for the benefit of the economy as a whole.

In the last 15 years, which sector of the economy has seen the greatest growth? I think there's little doubt that we could all agree that it's computers and related products (cell phones, HDTV, etc).

But what's happened to that sector? Deflation. Why did the segment grow, yet prices fell? Well, there's definatley lower production costs, but that would only cause the price to fall, not cause growth. Growth was caused because that people knew the prices would fall, yet bought them anyway. They had confidence in a good purchase. In a state of DEFLATION, the market GREW.

Now lets look at gas prices. They doubled over the cost of a year. The consumer then, adjusted. Not much, but enough to where consumption was, if not decreased, not increased. People tried to consume less. All of a sudden, the people who were buying oil futures lost their confidence in the product. Electric cars, ethanol, more public transportation usage... The price then fell because people lost confidence in their purchase of oil futures, and prices fell. A deflated market, with a negative impact on that sector.

Inflation: Too much money chasing chasing too few goods/services. Buying power decrases. Deflation is obviously the opposite.

now, again, lets look at what's happened: Prices went up, but margins did not. COSTS did. Now, by the tanking of gas prices, prices will fall and margins won't. Products will still be sold at a profit.

Ultimately, it's consumer confidence that's going to determine whether we enter a true time of deflation, is whether people get caught up by what's happened to their 401k, which doesn't affect what they do tomorrow, or if they get caught up in their wallet and see "hey, more dollars". Prices will fall, and purchases will increase as a result - deflation that improves the economy, and then will allow for a period of growth,.

Gas Prices are all people were talking about, and soon people lost confidence in buying OTHER things because they had to buy gas. If people will now do the same: gain confidence in OTHER things because they don't spend that money on gas, we'll be OK. Overall, deflation would have a positive outcome on the economy.

I'd like to know YOUR view of what's happening, and what you think is going to be the ultimate outcome, and more than a "nah uh" if you're going to say I'm wrong.
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Re: The Economy And You

Postby thelaird » Sun Nov 09, 2008 4:26 pm

The Adam wrote:Gas prices doubled in the course of a year - you're telling me that rampant inflation didn't take place?


I stopped reading here, because you clearly don't know what you're talking about.
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Re: The Economy And You

Postby An Adam » Sun Nov 09, 2008 4:40 pm

You're right... It took gas 20 months to double.

Don't worry though, you don't have to try and figure out something that makes sense in response. I have 2 sisters, a mom and a wife. I'm used to hearing the "nah uh" and dodging of the issues.
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Re: The Economy And You

Postby thelaird » Sun Nov 09, 2008 5:12 pm

I'm just a few hours shy of an economics degree, so trust me, it's not a matter of making sense. It's the sheer amount of time involved with setting you straight that's holding me back. You are so grossly incorrect on so many different points that it would take a serious effort on my part and I don't care enough. So instead, I'll call you an idiot and leave it to you to find out why.
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Re: The Economy And You

Postby Mark O » Sun Nov 09, 2008 5:30 pm

The Adam wrote:Not sure if you heard, but this country is in what's thought to be an economic crisis of sorts. So I ask you, how have YOU been effected?


I made more money in September than I made in January, which is typically by far my best month. But we've been seeing a heavy reduction in the volume of trading, and things have gotten real slow, which is a far greater indication of the current health of the economy than where indexes are from day to day. Of course, this is to be expected when some of the historically biggest players in the market go belly up over the course of a few weeks.

Me? I spend 45 dollars less a week on gas than I did last week. I have an extra 2300 bucks in my pocket this year due to this "recession."

That's almost 4 months of mortgage payments, or 33% of my yearly commitment to a bank who can't manage their money. It's also the most valuable thing I own. It's not worth what it was in 2004 (hurricane's fucked our market), but it's still enough that I can leverage what I need out of it.

My 401k is in the toilet, but if you haven't noticed I'm not a senior citizen. I have 35 years for that to rebound...but I've also got 25 of those where I won't have a mortgage payment so I can make that back.

Now, we are taking losses: we're making less dividend income from our stocks, which blows. I think they've fallen somewhere in the 100 a month range, or will when the next set comes. So I've lost 1200 dollars in stock money over a year.

You know what? The Government gave me a check for 1200 earlier this year, so that washes.

The stocks are worth less now, much less. But again, that value wasn't something I was seeing as we aren't big buyers/sellers, we're just letting it sit.


For the most part, in any market downturn, this is a good idea. However, be sure to do a little research, because of some of the same kind of mismanagement that got us into this mess, some portfolios won't be coming back.

I'm paying more at the grocery store, but donna and I are both pretty lazy, so we end up eating out ALOT. Restaurants are hurting so they're offering all kinds of discounts and deals, so I'm really not spending THAT much more - almost a wash.

So ask yourself, do you have more in your pocket today than you did this summer when you were dumping that money into your gas tank?


I drive an Accord, the gas price boom didn't bother me that much.

What you're seeing is not a recession, what you're seeing is a SUPPLY RECESSION. There's 2 sides to every financial transaction - if you spend a dollar, that means someone else gets it, right? Your bank doesn't treat a 100 dollar check you write the same as one you deposit, does it? No, one makes your balance go up, one makes it go down.

Every dollar of yours is starting to buy more of something. It'll take a while, but instead of coke being 4 12-packs for 12 dollars, it'll be back to 10 dollars. I'll be making the same amount of money, but getting more with it....

Recession, the act of Receding. What's receding? PRICES!


So I'm assuming by "supply" you mean "cash supply"? Because reduction in supply does not result in reduced prices. That would be a reduction in demand, which is caused by a reduction in the cash supply.

Sure, if you own Coke, you're PISSED that I'm paying less for it. If you own the restaurant, you're pissed. Some people might even lose their jobs with the restaurant or with coke.

The restaurant might even close... you know why? Because they weren't good enough of a restaurant for people to choose them over something else. That happens. It means whoever owned it needed to own something different, or work for someone else. It's a lesson that he or she didn't have the right skills for what they were doing, and they should learn, not bitch. I didn't lose my job and won't lose my job - my skills and abilities are limited among the general populace.

It is not an economic crisis that you and I are in... it's motherfucking thanksgiving. You know who's getting buttfucked? Some Sand Person in Saudi. Some executive in New York. A Broker in Miami.


No, all these people are doing fine. It's the folks who were working for them who are getting buttfucked. Also the gays.

I have MORE money. It's the demand-side correction that had to happen to put prices into check and create a stable place for the economy.

"We're cutting interest rates!" You know what that means?


That there's a scary freeze in the credit market because every institution involved in lending credit has lost their fucking pants?

"Please, we're having a sale, come owe us more money!" We're going to give you a small amount today so that you can get something you want NOW NOW NOW. In return, you give us MORE MONEY! MORE MORE! MORE!


It has a little more with trying to get money flowing through the economy because no one wants to lend money to anyone right now.

Mostly because that has been the tagline for the last two and a half decades and is exactly what got us into this mess. Also, they're almost out of cuts, down to 0, which means they'll be in this boxing match with one arm anymore. Which means, if they're not real careful, and try to rush the process, we'll see runaway inflation within a couple of years.

So don't buy that shit about "recession" "crash" "depression" and people that lose jobs do so because they weren't doing a job that people wanted, or weren't good enough at doing it.


To some degree you're right. The frenzy about the crisis has been overhyped because the news people do really well anytime there's a crisis of any kind. But you would be mistaken if you looked at where we are today, and just because us dudes in the upper-middle - lower-upper class that populate most of this board aren't feeling the bite just yet, think that the whole thing is smoke and mirrors. Impatience over getting the anecdotal evidence looking better could very well result in a much bigger problem for everybody.
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