Of course, a crummy economy should give me a lot to write about. But I'm one of those fellas who actually gets depressed (just like the economy!) on occasion about the gloom and doom and wonders, innocently,
Will the economy ever improve?
Jobs data was looking somewhat positive until the last report. We're heading into the holiday season, where most retailers finally hit black on their bottom lines for the entire year, and housing still sucks. Now we find that the US Treasury cannot even print money correctly!
What is the world coming to? I'd appreciate your thoughts.
(By the way, I'm ever the optimist. Sometimes, though, it gets pretty difficult to remain positive and not just start hoarding stuff and move to the country.)
Published on October 20, 2010 TWO MINUTES UNDER OATH This is not the Republican who dresses up like a Nazi . . . or the Republican who mocks Justice Sotomayor’s name (and calls Secretary Chu “Secretary Chow Mein”) . . . or the one who says she’d be honest with Hitler if she were hiding Jews in the attic but lied about her educational record.
So you are an acclaimed spendthrift and saving is just not in your genes. A shopkeeper’s favorite customer, your savings account is always in a dry spell and sales exhaust your paycheck. If you feel that you possess any of the described symptoms, then I must congratulate you; after all, you have the potential of becoming the next financial disaster. Here in this article we have discussed five ways which will surely turn you bankrupt:
Throw a party after every paycheck: Who doesn’t love parties? If you are a hardcore party animal who can’t resist to party on the first of every month then it’s a frank warning that you are heading towards your financial doomsday. We all have temptations and window shopping is certainly de-stressing but an unhappy fact of life is that the mall is not the only place to spend your salary. Those who take this advice have enough savings for rainy days while others face a bleak future.
Make deals with family and friends: It is very true that blood is thicker than water but even truer is the fact that money rules the roost. Doing deals with friends and relatives not only puts your relations in danger but is also very draining for your finances.
Fall in love with EMI: If EMI, or equated monthly installments, tops your budget planning and taking loans is your second nature then probably you are the worst financial planner alive. Taking a loan might be necessary but is not to be cultivated into a habit. Instead of using your credit card or debit card, start using real money. Start saving your funds and use them instead of borrowing money. This will not only be a wise decision but will also guarantee you a safe future.
Be a guarantor for your friends: Friends are special but cosigning a loan for every second friend is not that special. Being a guarantor means added responsibility, however trustworthy your friend might be.
Do not plan for your retirement: You are just thirty and retirement is ages away. Planning a retirement fund is certainly not on your priority list but a day will come when you will have to face this day. Not having sufficient funds in your old days might present you with all new problems which you cannot imagine now.
Published on October 15, 2010 But first . . . IT GETS BETTER If every 12-year-old in the country – and every parent – took a few minutes to watch this Fort Worth City Councilman, there would be more happiness and, at the extreme, fewer teen suicides in America.
For a system allegedly being strangled in its bed, U.S. capitalism seems to be in astonishingly robust shape.
Numbers published by the Federal Reserve a few weeks ago show that corporate profit margins have just hit record levels. Indeed. Andrew Smithers, the well-regarded financial consultant and author of "Wall Street Revalued," calculates from the Fed's latest Flow of Funds report that corporate profit margins rocketed to 36% in the first quarter. Since records began in 1947 they have never been this high. The highest they got under Ronald Reagan was 30%.
The picture is also similar when you exclude financials.
The Dow Jones Industrial Average (^DJI – News) is above 10,000. Small company stocks have rallied astonishingly since early last year: The Russell 2000 index is back to levels seen not long before Lehman imploded. Meanwhile Cap Gemini's latest Wealth Report notes that the North American rich saw an 18% jump in their wealth last year.
Meanwhile, federal spending, about 25% of the economy this year, is expected to fall to about 23% by 2013. In 1983, under Ronald Reagan, it hit 23.5%. In the early 1990s it was around 22%. Some socialism.
These days, three-fifths of the entire budget goes on just three things: Insurance for our old age (through Social Security and Medicare), defense, and debt interest.
Conservatives don't want to cut the $700 billion-plus we spend on defense. We can't cut debt interest payments. And while Social Security and Medicare certainly need reform, the main "problems" are simply rising life expectancy and health care demands. If we didn't provide for the insurance through our taxes we'd have to do it individually.
What about the rest of the budget? It's jumped from around 7% of GDP a few years ago to about 10% now. Out of control? It's been in the 6% to 9% range for decades. It's forecast to fall to about 8% again in a few years.
So much for a revolution. But here comes the counter-revolution just the same.
It's socialism because we have a Democrat in the office of the President. It's "trickle down" when we have a Republican in office. Let's see:
Corporate profits up – CHECK
Stock market up – CHECK
Non-discretionary spending unmovable – CHECK
Federal budget as a percentage of the economy hasn't changed much (if at all) – CHECK
Seems like nothing's wrong to me. Oh, sure, the federal government spends a lot of money – money it doesn't have – on some stuff we don't need. But try taking away social security, Medicare, or defense. You'll be out of a job real fast if you're a national politician. Nobody has the wherewithal to do anything about any of this stuff.
So this is what I'd tell the Obama administration, if they asked: GROW the damned economy. Get it to 5-8 percent, and all this debt/deficit talk vanishes, people get hired for good jobs, and Obama gets a second term. It really is the economy, stupid, and Obama should have cracked this nut a while ago.
If I've said it once, I've said it a thousand times: The stimulus package was way too small.
And now that both sides of the aisle have either forgotten or dug in their heels on unemployment compensation extensions and further stimulatory legislation, we may be in for a classic double-dip recession.
Only this time, it might drive what seemed to be inevitable and then highly unlikely – a corporate lending and business real estate catastrophe that could dwarf the mortgage meltdown.
Then more cries, this time maybe real, for socialism will come to the forefront. Our brand of market capitalism (highly influenced by the idiots who represent us in Congress) certainly isn't working right now.