This morning, we are going to review an extremely negative public survey on the economy by Bloomberg/Los
Angeles Times: Almost two-thirds of Americans say a recession is likely in the next year and a majority believes the
economy is already faltering
Before we do that, I need to provide you with two caveats about recession forecasts:
• Economists, as a group, have never correctly predicted a recession: They tend to be overly-optimistic as a profession. Some of it can be blamed on their employers, who tend to dislike negative sentiment as bad for business; Some of it can be blamed on the tools of profession, which are not particularly well suited for determining contractions in advance.
• The public, as a group, predicts many recessions that never occur. People internalize and over emphasize their own tensions, stresses, worries etc. and extrapolate these out toward the economy. The old joke is they predicted 9 of the past 4 recessions.
I laid out my views on forecasting years ago in a column titled “The Folly of Forecasting.”
What is the value of these surveys? Sentiment and psychology, handicapping the political races, and getting an early feel for potential market impacting legislation.
What factors are worth noting?
Sentiment
-Almost 2/3es of Americans say a recession is likely in the next year;
-A majority believes the economy is already faltering -65% (versus 29%) expect a recession;
-51% say the economy is doing poorly; 46% say it is doing well;
– This is the gloomiest view since February 2003, and a significant shift from June 2007, when 57% percent said it was doing well.Tax Policy:
-Two in three say they haven’t benefited from the Bush tax cuts;
-A majority of Americans say they would tolerate higher taxes — if it paid for universal health care;Universal Health Care
-60% said they would be willing to repeal tax cuts to help pay for a health-care program that insures all Americans;
-Most of the highest income group polled, those in households earning more than $100,000, support it.
-More than 80% of Democrats say they like the plan; most Republicans oppose it.
-Independent voters also support universal health care;
-52% vs 36% favored health and education spending as a better economic stimulus than tax cuts.Taxing Investment Income
-Less than 50% say investment income should be taxed at the same rate as wages.
-16% say investment income tax rates should be raised; slightly more favor keeping rates the sameSubprime mortgage
-Some respondents want Federal authorities to help delinquent homeowners refi loans;-Others say we need new regulations;
-28% say the market should be allowed to correct itself.
Federal Reserve Chairman
-38% percent approve how Ben Bernanke is handling his job;
-In March 2007, Bernanke had a 50% approval rating
Fascinating stuff; Go read the full piece . . .
Source:
Americans Turn Negative on Economy, Expect Recession, Poll Says
Matthew Benjamin
Bloomberg, Oct. 25 2007
http://www.bloomberg.com/apps/news?pid=20601170&refer=home&sid=a2TWmuh3vHHI
How many Americans are ready for a 180 in their standards of living? (my guess is a bit less than 2/3)
The debt junkies aren’t going to go straight without a fight.
According to U.S. Census: “Oct. 26 (Bloomberg) — A record 17.9 million U.S. homes stood empty in the third quarter as lenders took possession of a growing number of properties in foreclosure.
The figure is a 7.8 percent gain from a year ago, when 16.6 million properties were vacant… About 2.07 million empty homes were for sale, compared with 1.94 million a year earlier, the report said.”
http://www.bloomberg.com/apps/news?pid=newsarchive&sid=auGPZJsHk6_s
Countrywide helped trigger a rally with very positive comments. Do you think Angelo Mozilo wanted to sell more stock?
The Big “R”
Oil costs like a billion dollars a barrel now. And according to a Bloomberg survey 2/3 of the American public think we’re headed for a recession. Of course, the “American public” is kind of dumb. As Barry Ritholtz says, they’ve…
“tangelo” has stopped, for now, however he was still flipping those options as of Oct. 12th.
My guess is that we see a fresh batch of selling from him. Even though he should be in the blackout period.
MS
Isn’t a “Wall of Worry” usually good for stock prices? Beware when everyone turns positive.
One Kirk Report stat is that SPY has never been negative the last 3 days of Oct to the 1st 3 days of November. Interesting.
“Holding the S&P 500 during the last three days of October through the first three days of November has given a positive return during every year of existence of the S&P 500 tracking fund, SPY. The 12 out of 12 winning trades returned an average of +3.3%, with an average drawdown (i.e. maximum loss) of only -0.7% compared to an average maximum gain of +3.6%. That kind of thing shouldn’t be ignored.” – Jason Geopfert
http://www.thekirkreport.com/2007/10/sitting-ducks.html
Barry,
So you mean to tell me that 2/3rds of Americans haven’t heard of Goldilocks 2.0??
The 2001 recession was preceding by an increasing frequency of the word “recession” in general conversation. In Aug, 2006, I ran a “recession” frequency count on Google’s Trends tool and it showed no similiar pattern.
Recession Meme
But today, fourteen months later, I re-ran that query and I’m surprised at the similarity to the frequency count just preceding the 2001 recession. Recession has entered the general mindset of the public.
If the health care #s are at all accurate that’s scary because it means “most” Americans are idiots! Do people really thing that rolling back the Bush tax cuts are going to remotely pay for that UHC now or in the future? I mean, it’s not like we don’t have fantastic exemplars on just how well the gov’t controls spending on this type of thing. Where is the need for a crystal ball here? Where is there room for optimism that “it’s different this time”?
I can see how 60% in a poll might favor it because they probably aren’t polling Barry and his neighbors, they are polling cab drivers fry cooks who are probably in the 50% of all wage earners who pay little or not taxes in the first place. So sure, their answer is “Sure, tax Barry more. He can afford it.”
I would like to know the # of “most” in “Most of the highest income group polled, those in households earning more than $100,000, support it. “ My guess is that # is driven by poll population skew because the dem/R ratio in the country is so tight that would almost make it a 50/50 answer by default.
As for the % that “expect a recession”. All that shows is that the people have been reading the headlines. Most of them haven’t given the matter 3 minutes of independent thought in the last 3 years. These are the same people who have said for the last 3 years that “the economy is doing worse”. Why? Because certain headlines have been telling them so!
Mike G,
great post… I still want to know what government program which is run well? so now we are going into healthcare… I pay $1100.00 /mo for my bluecross, there have been plenty of times that I could barely afford that, and I would really enjoy some deregulation or something to get that bill down, that is my second highest bill, besides my morgtage…. I have some friends that are self-employed and they do NOT have any healthcare… I ask them why, and they reply “well, cause we are self employed”. Hint, there is insurance for self-employed people too… but yet they are driving brand new cars, have Ipods, etc… face it, medical insurance is a cost that most people just dont want to pay even if they can afford it.
We are going into an election year and the MSM is doing all they can to describe a bad economy so as to elect Democrats. With the stock market at all time highs, with the unemployment % at very low levels, with interest rates very low, with real wages climbing it takes a very a talented MSM to convince people that we are in a recession.
And if you think this outlook on the MSM is off base, think about how little we hear about how much improvement there is in Iraq. No mention of a 70% drop in civilian deaths and a big drop in our troop deaths. Whether you are for or against this war, we are not hearing good news about it.
Both the ‘reporting’ on the economy and on the war is driving opinion: That’s the real explanation, like it or not.
It’s a recession, all right. Cooking the books with regard to the CPI and unemployment
numbers won’t make the problem go away.
By the way, I lost my job in early 2001 because of the H1-B visa program.
Therefore, the tax cuts didn’t do me any good.
Big fat rich people lurking around their country clubs are not a good source of
wisdom regarding the real economic situation.
Can you say “Clueless Preppies?” Of course you can. . .
Things are peachy-creamy! $94 gasoline? Airfare increases, Food increases, etc, etc. Unemployment is slowly climbing, Foreclosers, credit card defaults, retail. I don’t predict market direction, but I bet that it doesn’t go up forever. The only people who think things are good are the perma-bulls.
We *have* a recession. It’s just not reflected in the official numbers, thanks to substitution and hedonics. (I like the “CPI Cafe” link someone posted earlier.)
Most Americans think we’re headed for a recession because they realize their standard of living is going down. Not because of headlines. But, because everything but the flat panel TV is going up in price, while their ATM homes are going down.
It’s a big country and some will fare better than others. It’s a statistical spread, completely natural. Many are inclined to discount the experiences of the others.
What we’re seeing now is the consequence of idiots, liars, and religious zealots taking over the GOP: a bigger interest in socialism.
I’m not a fan of universal healthcare. But, I’ll take that over more war and torture and diplomatic arrogance/incompetence. Not spilling the blood of people I don’t know is more important to me than the extra bucks I’ll pay for someone else’s healthcare.
Good luck to Dr. Ron Paul.
When looking at a chart of the transportation « services » from 2000 till now the US economy is entering in recession with a deeper downwards slope than in 2002 / 2003.
When consulting the Fed model FED 3MONTHS 10 YEARS YIELDS anticipating recession
With a ten months forward looking, the US was deemed to enter in recession now with a probality close to 50 Pct.
An arsenal of tools:
Fed funds against ten years, packaging,ISM,LEI,capex, tax receipts are pointing downwards.
You already do pay for other people’s healthcare! Why does nobody understand that our health care costs are higher because we are already paying for the uninsured?
Geez, people, wake up already!
Sounds like a couple of the wingers need to geet in touch with some real people (people who make less than 150k).
Things are not peachy for a good portion of the population. Most people don’t read, watch, or pay attention to the news. What they do pay attention to is what they have to pay to live. Everytime my wife goes to the grocery store (with our limited $100 for a week and a half) she comes back with less. My electricity and every other utility bills continue to increase on a regular basis (year over year). In fact I’ve noticed that most of my utitilty bills which used to have year over year and month to month comparisions have stopped printing the year over year comparisions.
Before you find a way to personally attack me I will give you some background. I have never had a credit card with more than a $300 limit and have only used one once which I paid off within a month. Second, I went to a top tier private Texas university. I have been unable to find a job that will pay me more than 40k a year and the raises that I have received from my current employer have come no where close to keeping up with the cost of living. I was told by advisors to take loans to cover my schooling. My loan balance is somewhere around 58k because I can’t afford to pay anything more than interest on my loans. I can’t even begin to imagine buying a house anytime in the next 5-10 years. I can’t afford to send my kid to private school nor afford to live in a nice neighborhood with good schools (so much for the american dream). I don’t drive a new car. I pay an obscene amount of my income to health insurance ($360 a month which increases by 15% next year).
I have several friends that are in worse or similar positions. I also have friends that are better off than me (they usually come from a well off family so no college debt).
Blaming the media for peoples’ perception of their own lives is a cop out. You guys should really talk to people instead of reciting winger talking points. It’s funny how when the polls are in your favor the people support you but when they go against your beliefs people are stupid.
Also, if you want a well run health program from our government look at the VA before Bush slashed it’s funding and put incompetent imbeciles in charge of it.
Perception is reality. Most readers here are well-aware of the wealth effect. It’s largely a behavioral concern — not one that can be quantitatively analyzed or predicted. When consumers stop feeling “wealthy,” regardless of reality, their spending will slow. Home equity has the potential to be a larger impact on the wealth effect than that of the late 90’s with stocks, because consumers have historially perceived home values to be stable (always appreciating).
Once, and if, they see for themselves that their net worth is falling and their greatest asset does not always appreciate in value, the financial “crisis” will become reality.
“who are probably in the 50% of all wage earners who pay little or not taxes in the first place.”
Virtually all workers are net tax payers.
The right wing spin is that only the income tax counts, as usual it is a lie.
“who are probably in the 50% of all wage earners who pay little or not taxes in the first place.”
Virtually all workers are net tax payers.
The right wing spin is that only the income tax counts, as usual it is a lie.
bears getting crushed today, bull whoooopping it up to new highs, wooo whooooooo!the world economy is hitting on all cylinders! whats not to like?
Virtually all workers are net tax payers.
The right wing spin is that only the income tax counts, as usual it is a lie.
Look, if 50% of the wage earners pay 5% of the income tax, and the top 5% of the wage earners pay 50% of all income taxes, there are a WHOLE lot of people paying very little income tax! And income taxes are > “payroll” taxes (20-35% vs 7.5%?). And most of that “payroll” tax is really the gov’t borrowing your $ at the point of a gun so that it can pay you back 2-3 times that much in your retirement (well, historically that’s been the case!)
I’m not saying it is easy for them. If you take home $500/month then it might just be tough to pay $20/month in income tax or whatever their bill is.
As for “talking to real people” (kckid816). If your definition of “real people” are people making < $40K then you're right, they did not see direct financial benefit to the Bush tax cuts. However, the fact that the economy has been as strong as it has been for so long as it has been is a massive indirect benefit. Considering 9/11, the recession that started just before he took office, Katrina, and now the CA wildfires, you better thank your stars that he passed his tax cuts “for the rich” because that was the main thing keeping the economy out of the dumpster. Are there people doing better than you? Absolutely. And they probably always will. You are barely eeking by, they have disposable/investible income. Anyone that’s been in the stock market is having a MUCH better time in the last few years than someone looking for next month’s rent in the sofa. That doesn’t make it “unfair” or mean that the “fat cats” are getting one over on you.
Finally, just because you have a degree doesn’t mean that it is a marketable degree! Congratulations for getting one, you are a better person for it, no doubt. But if you have a BS/BA in History, Psychology, Sociology or Art, I’m thinking that degree isn’t paying off as far as the (job) market is concerned. That doesn’t make the degree bad, just unprofitable.
Yea, this is a real fascinating poll, Shorter version:
Do you favor taking someone elses money and providing benefits to yourself?
Answer: Yes!
Fascinating!
This survey really is fascinating. Shorter version:
Do favor taking someone elses money in order to provide a free benefit to yourself?
Answer – Yes!
Simply fascinating.
JBJB:
Pretty much! I mean, wouldn’t you think people would need actual #s to give an informed answer? How much of the UHC is it going to pay for? What about 10 years from now, 20 years from now. Are we still assuming the tax hikes are paying for it? Exactly how much is that UHC supposed to cost by that time? Factor in a +/- 400% on that # and then ask the question.
But still, you are right. If I’m making $40K and can’t afford health care then why the hell should I not want to tax Barry into the Bronx if it gets me health care? (Sorry Barry, but somebody has to pay for it!) Besides, UHC has worked so well in other places like Canada, the UK, France. All of these places are health care utopias, haven’t you heard? Oh, don’t forget Cuba. (Hat tip – Michael Moore)
As to the so called “cuts” in VA spending:
http://www.factcheck.org/print_funding_for_veterans_up_27_but_democrats.html
I had a co worker in the brokerage biz back in the stone age 60’s who once told me “I will spend every dollar I have to stay healthy and avoid death. When my money is gone, I will spend all of YOUR money.” I guess now, health care is just another entitlement.
And here’s what they want to do for the VA in ’07.
http://www.ussvi.org/veterans/vet-2006/060213b.htm
It’s amazing how many Americans are for some type of universal health care. Yet almost NO ONE talks about banning smoking or encouraging people to lose some damn weight. The #1 and #2 preventable causes of death in the US are yes you guessed it… Obesity and Smoking (read: 2 of the biggest costs in the health care system are obesity & smoking).
People seem to want their cake and be able to eat it too (no pun intended).
Do people seem to think universal health care will really do much other than erode the quality of the health care we have?
As someone mentioned above, look at the state of the VA. That’s basically government run health care. It’s essentially universal health care for veterans. Most VA hospitals are an absolute dump (in almost every measure).
If ANYTHING, Universal care will simply *encourage* people to ignore their health.
The health of this country and its people isn’t simply the government’s problem. It’s everyones problem. We need the people of this country to take the time, effort and care into their health before any type of universal health care will do anything except raise costs for everyone, over load our hospitals, and further impinge on our physician shortages.
————————————-
It’s funny. I was at Safeway (the super market) the other day. They were accepting donations for Breast Cancer and its research. Yet, just a few feet (~20) away they had a huge display of cigarettes setup. Anyone want to take a guess to what the number one preventable cause for Breast CA is?
….
*DING DING DING* Yep, its smoking.
– next question: Anyone want to take a guess to what the fastest growing demographic of smokers is? —> Teenage females.
My degree is in finance.
I never said anything about fairness. There will always be somebody who makes less. The fact is I have busted my ass to make it where I am. However the facts don’t bare out that the tax cuts have benefited the economy. I didn’t make one claim as to tax benefits however. I only made the claim that the economy is not as rosy as you and others have claimed.
As for the real people comment I said people under 150k not under 40k.
What I find really amusing about guys like you is that after the market has been down for a couple of days and then we have an up day you come in here blowing your tin horn talking about how wrong Barry is.
Still 4 out of 9 is better than 0 for 0
“-60% said they would be willing to repeal tax cuts to help pay for a health-care program that insures all Americans;”
Perhaps some opportunistic presidential candidate can run on a platform of large tax increases. It looks like an easy way to get 60% of the vote.
Dave:
Exactly! Yet, by kckid816’s theory of modern health care, it is fantastic. Why? Because it is “free”. A) It isn’t free, there’s no such thing, and B) it generally is caught in the same red tape of incompetence that most gov’t driven programs are (shocker) and Bush’s massive INCREASE in funding of the VA won’t solve that particular problem.
I want to have sympathy with the people who pay no income taxes because well, a tax cut really doesn’t do them any good. But I must stop short because it dawns on me, they pay no income taxes!
I’d be willing to bet my entire savings that more than 60% of the peopel in this poll couldn’t even define Universal Health Care, recession, or subprime.
Dave – “Anyone want to take a guess to what the number one preventable cause for Breast CA is?
….
*DING DING DING* Yep, its smoking.”
From the American Cancer Society:
Most studies have found no link between active cigarette smoking and breast cancer.
Other factors (breastfeeding, age of childbirth, alcohol use, and obesity) are mentioned as increasing breast cancer risk.
Smoking is obviously not good for you, but misinformation only diverts attention away from other risks.
kckid816:
The 40K was in reference to YOU. At 40K with dependents, you aren’t paying a whole lot of the income taxes (that say, fund the VA). That’s a fact. I’m not saying that makes your life easy, I’m just saying the tax cut should not have been expected to plunk $5,000 in your pocket. We call that welfare where I come from.
I also have not said that we are or are not headed towards recession or said Barry is right or wrong, just that the media is overly pessimistic and has been for some time and that the average “man on the street” hasn’t got a f*king clue as to the state of the economy. The average man on the street gets a headache listening to the Sat. morning Fox business lineup, let alone Kudlow’s show.
The fact is though that people (Barry to some degree but really Shuller (sp?), or Doug Kass, Kudlow’s usual nay sayer guests) have been calling for a recession for about 300 dow points now. Sooner or later they WILL be right, but in the mean time people that have been short have been losing their shirts.
We have had a very long bull market, mostly due to the very long string of good earnings. What did we have, 8 quarters of double digit earnings on the S&P? This quarter broke the trend. We are weakening. That’s normal. Hell, even a recession is a normal part of the cycle. There are reasons to believe either side of the point, but let’s wait until we actually see a recession before claiming it! Slowing down from 3% growth to 2% growth is not a recession.
The clueless never fail to astound me. Our economy was stimulated not by tax cuts, but because interest rates (Fed Funds) were cut to 1%.
Tax cuts did not stimulate this economy, it was the interest rate cuts. And then the greedy banks, and consumer loan corporations decided that they were not making enough money, they needed to push the envelope one step further and we have the credit crunch, and many of the worst offenders will be (are being) bailed out by more rate cuts.
Irresponsible tax cuts to the wealthy were Bush’s present to his supporters, and the Iraq war was a present to the war profiteers who supported Bush and Cheney.
Bush, Cheney, the GOP congress are responsible for the 61% increase in our national debt, from 5.72 trillion in 2001 to the 9.056 trillion today. The fiscal insanity promoted by the right wing is now coming home to roost.
The fiscal irresponsibility of the Bush administration and his toadies in congress is breathtaking in it’s scope.
We have spent almost 1/2 trillion dollars for Bush’s failed war in Iraq, and he begs for more money for his legacy.
During WWII, there was a shared sacrifice, not tax breaks for the rich.
And as far as the shameful VA cuts in prior years to our veterans this increase is long, long, long overdue. I guess that publicizing the cruel conditions that our veterans have had to endure which were caused by Republican cuts to the veteran’s budgets were enough to shame them into providing more money to the programs. (Walter Reed)
Money for vets, not tax cuts for the rich. A society that will succeed is one who cares for it’s most vulnerable, and supports those who give their lives and health to support the wars of the chickenhawks that have run our country into the ground.
If all of your neighborhood restaurants made everything free, what would happen?
1. Everyone who is cheap, looks to game the system, and who generally is a bargain hunter will swarm the restaurant.
2. Those that can currently afford, and have afforded restaurant food stop paying for the food because what else are they going to do? They don’t want to leave their neighborhood. And besides, its free!
3. Now, the restaurants are overwhelmed. Not only cannot they not afford quality food as they used to, they cannot afford quality cooks. Food becomes mediocre, at best. Cleanliness becomes suspect.
4. Because of overwhelming demand for free services, the restaurants now have to ration food. This means that those with last names A-G can come Monday. Those with H-L, Tuesday, and so on and so forth. It doesn’t matter how hungry you are, or if it has been Monday since you have last eaten and you cannot eat again until Friday.
Where does it end? It ends with people dying of hunger, and people getting poor nutrition and getting sick from unclean restaurants.
Folks, this is what is going on in Britain and Canada with their healthcare systems.
Shorter JDS:
Bush/Cheney bad! Now gimme something for free!
I agree that the lowering of the tax rates was a huge boost. We needed it. IMHO the FED (which is independent from the executive branch or congress last time I checked) kept the rates too low for too long. But the tax cuts did what meaningful marginal tax cuts have historically done, taken down barriers to investment. The lower rates (i.e. cheap money) do the same thing. So Bush did what he could and the Grand Negus did what he could for the economy.
As for VA cuts. Really, just give it a rest already. http://src.senate.gov/public/_files/graphics/CommitmenttoVeterans_Large.jpg
And then the greedy banks, and consumer loan corporations decided that they were not making enough money, they needed to push the envelope one step further and we have the credit crunch, and many of the worst offenders will be (are being) bailed out by more rate cuts.
I love it. The “greedy banks” put a gun to your head and MADE you take that loan. Why, of COURSE a Wal Mart greeter can afford a $300K home. No red flags there!
I agree the off the books CDO thing was too much, letting the lender quickly put 6 degrees of separation between the loan he just wrote and the responsibility/liability for it is not a good thing. But it was NOT illegal! And Countrywide etc. are paying the price now. Oh, and so is the idiot making $20K/year that took the zero-down adjustable rate mortgage for $200K. What was he thinking? I’ll tell you what he was thinking, “I DESERVE it!”. Wrong! The market is nothing, if not fair! :)
I also agree that the GOP has been fiscally irresponsible but probably not for the reasons you think so. If you can’t spend a few billion to kill your enemy, what can you spend it on? Now, the prescription drug program. That was a waste and a gift that will keep on giving (to taxpayers anyway).
Estragon,
Then you could also take a look at this from the British Medical Journal:
http://www.bmj.com/cgi/content/full/325/7359/298/d
Also, from everything I’ve read in my medical textbooks and discussed with doctors, all while in medical school, along with the fact that smoking has been linked to all sorts of cancers (those toxins have to go somewhere)… leads me to believe that yes smoking does dramatically increase the rate of breast cancer.
But hey, if you want to believe what you’ve just said, by all means… please show your willingness to be the guinea pig.
I’m sure we can agree with one thing: no good comes from smoking.
I don’t have a source, but I’m willing to bet that smoking causes far more of a negative financial impact for everyone vs. the taxes cigarettes generate.
kckid816:
The 40K was in reference to YOU. At 40K with dependents, you aren’t paying a whole lot of the income taxes (that say, fund the VA). That’s a fact. I’m not saying that makes your life easy, I’m just saying the tax cut should not have been expected to plunk $5,000 in your pocket. We call that welfare where I come from.
——————————
You’re right I paid no income tax in the last two years of employment. In fact my take home pay is so small that I qualified for the Earned Income Credit. I have a college degree with nothing but student loan debt, have never been financially irresponsible, two dependentsand can’t find a decent job. I didn’t expect it to plunk money in my pocket. I’m financially literate and I knew who the tax cuts were directed at.
As to being short, BR hasn’t advocated going short (and has on several occasions said the he is long the overall market) nor have the majority of the posters here. I’ve been long the market through my 401k and with the $500 that I have made into a grand through speculation with long options I have made money on puts and calls. None of that is relevant to the post but since you brought it up I thought I would point it out.
kckid816:
So what’s the wild card here? You say you have a Finance degree from a good school but can’t find a job > $40K. I suppose it depends how long you’ve been doing the job but I take it from your post that you think you should be making significantly more. Why? Do you know similarly skilled people who make more? What is the going rate? (And I have NO idea.) If so, I’d ask myself what is different (in the eyes of an employer) between you and them? If not, I don’t understand why the salary is the problem? When you chose Finance, did you have some (mis)conception of what the field paid? (I only ask because I recently saw a Suzie Orman show where someone racked up $30K in student loans to get a culinary degree and ended up making $8.90/hr. She got behind on the loans, ignored them (seems logical!), and has $60K worth of student loans now and is still making $8.90/hr. She took the loans but apparently didn’t figure out if the job would ever let her pay them off. The problem wasn’t the loan per se, but what she got with the loan.)
I’m not trying to pick on you and I don’t expect/want answers here, I’m just thinking that YOU should know the answer.
Congrats on the options profit! Risk management (as opposed to total risk avoidance) is the key to eventually becoming financially comfortable. It isn’t going to happen from the 0.75% the checking account gives.
If all of your neighborhood restaurants made everything free, what would happen?
Right On, Bro.
Free Taco’s at Taco Bell!
Is this a great country or what?
“I went to a top tier private Texas university. I have been unable to find a job that will pay me more than 40k a year”
You should have considered something besides a Liberal Arts major.
Free Taco:
Say no more :) GO SOX!!
http://abcnews.go.com/Business/PersonalFinance/story?id=3780185&page=1
Those who trash healthcare in Canada do not mention that Canada spends approximately half that of the US as a percentage of GDP, and has far better outcomes reflected in longer life expectancies and lower levels of preventable diseases.
Rationing is a canard showing that the poster has no clue.
Bill aka NO DooDahs!:
No, the degree is in Finance. I don’t know if 40K is good for someone in that field in whatever region they are in (KC Kansas?) but I would certainly ask myself that question BEFORE I took student loans.
And to be fair, loans are the way people are being pushed to pay for school. Outright grants or scholarships apparently are more difficult to get. All that being said, something appears to be wrong with that situation. Perhaps getting only $30K in loans and going to a state school for the degree would have served them better? Who knows.
Mike G,
great posts… Kckid, I have to agree with Mike, maybe the wild card is you? Don’t get me wrong and I dont mean to harp on your problems, but unemployment is pretty low. And I am not saying life is easy for you or anyone else, but when has life been easy for any generation? Get it? Life aint easy!!! Now, as for tax cuts for the rich, I have ask this so many times but here goes, why is it fair for those ‘rich guys’ to pay more taxes so ‘people less fortuante’ get even more free things? Donna, you are right I know I am already paying for people who dont choose to pay or cant pay for healthcare, so I agree something needs to be done, just for God’s sake please no government healthcare. Funny that the people who want to tax the ‘rich’ more aren’t usually rich. As a cop in LA, I saw welfare and government program fraud like you wouldn’t believe, people that were completly healthy and never worked a day in their life, etc… so I dont have alot of sympathy for handouts… I am not saying that some people shouldn’t be helped but when you see firsthand just how much money the government wastes, its amazing and makes you a bit cycnical…
btw congrats to Kckid for at least paying for his own families healthcare when his financial status makes it hard, $40K/yr doesnt leave much money leftover…
Mike, Brian,
The wildcard is for the entry level analyst positions or anything with any type of responsibility hiring companies want employees that have 3-5 years experience. I have worked with career services from the university on my resume (so it’s a good resume) I apply for a rediculous number of jobs. I’m on careerbuilder at least 3-4 days a week and have been for about a year. I can count the number of interviews that I have had in the last year on one hand. I have expanded my search beyond Dallas-Fort Worth (where I am now) to include Kansas City (where I had a chance at a decent job but they went with someone who was already there and you can’t blame them for that). The point of my story is that the job market is not as strong as is purported by a majority of the perma-bulls. I expected to make 40-50k upon graduations but have had to work my way up over the last two years from 34k to 40k.
Brian B
If single payer (government run)US healthcare could save you 50% of your costs, you would be against it? You are already paying for the un-insured. Very successful government run health insurance programs exist in Europe and Canada They pay less than 5% administrative costs, compared to 30+% in the US.
As a society we need these efficiencies. We also need to decide how to allocate the (lower)costs.
Brian B.:
Thanks. And Donna is right, we do all pay for it already because we don’t deny health care to people, but I’m saying that we should deny it (dems don’t get your panties in a bunch until you’ve read the rest!!) It is unfair to the people who truly have emergencies to have to wait because someone (perhaps an illegal alien!) shows up there to get treated for a non-emergency. Emergency rooms should have the authority to deny non-emergency care, IMHO. There has to be some other place for people without insurance to get non-emergency care and it should NOT be free care! Maybe the cost depends on the individual (dems seem to like that for taxes so why not?)
In any case, part of the reason health care costs are skyrocketing is the emergency room situation. Drugs are another but that is a whole other ball of ear wax.
Buffalo Bob:
Very successful government run health insurance programs exist in Europe and Canada They pay less than 5% administrative costs, compared to 30+% in the US.
Canada looks OK on mortality rates etc. but there is no denying the extremely long wait time for even serious operations or to see specialists etc. As for Europe, define “successful”. There is a huge market for medical vacation spots in Asia and S. America forming and it is for poor/cheap Americans and poor/cheap Europeans. The rich around the world come here when their @ss is on the line.
As for efficiencies, that’s much of the difference, but part of that is also the legal costs. We sue at the drop of a hat and that costs everyone. Unless you get tort reform you won’t get the costs down.
kckid816:
OK. That’s kind of what I figured. There had to be something. I still don’t know what the “expected” salary in the field (and almost all salary surveys are too broad to be meaningful in any case) but I would think that with little experience, you probably can’t expect anything close to the $55K-$60K range in somewhere with a low cost of living like the mid-west. Now, NYC, sure, but it won’t be worth it.
You’re going to be a bit stuck until you have something to sell – experience. What’s true for almost every field is that if you have a degree, you have the foundation and that’s about it. You won’t use half of what you learned in school on the job and they didn’t tell you in school half of what you’ll need either. But you’ve got the foundation and the proven ability to learn. So learn what you can from the current job. Unfortunately there is no rushing that.
Do the job to the best of your abilities, make yourself known, make contacts, and manage your budget until you have the experience to sell someone.
Good luck.
Mike G
I define successful as costing half as much and having superior quantifiable outcomes.
Wait times are a function of rationing healthcare based upon need rather than wealth, and are grossly exaggerated, at least in relation to Canada.
Mike
Course there’s no mention in that article of the E-coli breakout at The Bell last year around Thanksgiving on the East Coast. It hit the MSM on Dec. 1st. Then about 10 days later we saw those Illegal Immigration raids at MEAT packing plants in the Midwest.
I’m sure there was no connection, however, as it was never reported in the MSM.
Never seen raids like that, though, before or since.
Buffalo Bob, nice try.
Life expectancy and preventable disease are as much a reflection of lifestyle as they are of healthcare.
No rationing? You are simply dishonest.
2/3 of Americans don’t even know the definition of a recession.
The conference call with CFC was a real eye opener with respect to their expectations of rate cuts. The silly profit forcast was another threat to the FED and banks to keep the liquididty coming or else.
KidKC,
I apologize brother, I didnt mean to come off harsh. You have presented your life without any BS, which most on the net wouldnt dare. I to wish you the best of luck!! And to respect of Gov run healthcare? No, I dont want Gov health care even if it means my $1100.00 mo bill goes down, You see I am not rich by any means right now, however, I pay for the luxury of seeing any doctor I want when I want, thats nice. We just had another child and had great care. Now was it frustrating to see the room next to ours that had an 18yr old girl that ‘looked like’ I was paying for her? YES!!!! extremely frustrating… so whats the answer? I dont know… Yes I am tired of paying for other people, my taxes, healthcare, public servises that I dont use or need… BTW, I have been very poor in my life, even rationing food at times, but I NEVER took a handout and worked thru it, and I have had times of great properity… isn’t that what America is suppossed to be about?
There is a 100% chance of a recession. With the exception of just 2, deux, two, 1+1, every one of the ABX indices are at new LOWS tonight…every triple AAA. How’d you like to lose 20% on triple AAA debt and nearly 50% on AA. Won’t even talk about A or BBB. Kiss your coupons good bye. They’re all worthless….. yet carried on books at par in all likelihood by 99% of holders. We’re still only a fraction the way through the mortgage resets. 100% guaranteed recession as capital shock ripples come to an economy near you. Buy your tickets now.
http://www.markit.com/information/products/abx.html
Brian B.: My son was sent to the middle east after 9/11, I felt that was potentially a great cost to me, I have one son.
Sometimes it does feel America exacts a high cost from some of us.
My wife and I have health insurance, that went up more than ten percent this year to almost seven hundred dollars a month, there is a $2500 per person per year deductible on the policy and neither of us have been seriously ill in our entire life, knock on wood. (So we are helping pay for others children.) O yes, my wife has a bad back and was attending physical therapy to prevent hopefully the need for surgery. The bluecross geniuses decided this was a pre-existing condition and would no longer cover the therapy. So other than an occasional cold and annual physical we don’t get zip for this policy it is basically catastrophic because we do not have government or private pensions but live off privately earned assets. But these assets could easily be wiped out by an illness the insurers refuse to cover, a phenonmenon that is more and more common.
I also get a kick out of people referring to the average american as stupid or ignorant when it was supposedly very intelligent and certainly well and expensively educated people who created this financial/credit/cdo/derivative/subprime mess that threatens our entire economy.
I don’t have many answers but I do have some questions that I do not hear asked very often….
Rexl,
I do not intend any of my comments to offend you. If your only son is in the armed forces and serving our country, I only pray for his safe return and god bless your family’s sacrafice so I can live free. I to have a son, although very young, I can imagine the pain of having him in harms way. I dont have an answer for the high cost of health insurance, as I have mentioned I pay $1100.00/mo of which I can not afford right now, but should there be some help? Yes!!! But does that mean tax someone else better off than I so he can pay for my family!?!? NO Way… this country was built on a survialists mentality, and somehow we have gotten off of that to a “work if you want to, if not the other guy will take care of you’ system.. How about the old system of self responsibilty?!?!?
Rexl,
sorry the last part of my post was not directed at you… take care and god bless….
Health Savings Accounts are the answer Brain B. Bush put it out there and the very thought of people having a choice in how they spend their health care dollars made the left apoplectic. There would have to be some transitional system, as people in their 50’s and 60’s might have a tough time getting enough into the HSA account to pay for increasing medical bills.
But for people just entering the system is would be fantastic. It would de-couple health care from employers (and employers would love that as well). It would give people a CHOICE in how they spend their health care money and it would in all probability drive costs down. Of course, one thing we’d need to really make it work is some more insight into health care metrics. What is the accident rate for a given operation in a given hospital and how does it compare to others? What is the malpractice claim count against a specific doctor? That kind of thing.
The final (and in some ways most beneficial) thing HSAs would do is make people realize exactly what health care is costing and question it! If all you pay is a $20 co-pay for $500 worth of pills or a $20 co-pay for a Dr’s visit and a bunch of lab tests then you have no frickin idea how much health care costs and even less reason to care. THAT is at the crux of the current health care cost problem. Bring on the HSAs!
Mike G,
thanks, sounds good to me… BTW in regards to a post a couple of days ago by “V.J.” I think… the headline was “CNN reports 60% of corporations dont pay income tax”. Ya dummy I have had 3 corporations, 2 of witch never paid tax cause they never made money!!! You can make a corporation for $35.00 and a Office Depot kit…. another one of his posts that come from sound bites and no life experiance… way to go!!!
Brian,
Helps if you actually READ what is linked before making ridiculous assertions.
Quite obviously the GAO was referencing well within the Fortune 100, as the report stated:
“among the largest corporations — the 1% of all corporations that owns 93% of all corporate assets — 82% paid less than 5% of their income in taxes, and 61% paid NOTHING AT ALL”
Hardly the hobby status companies that you claim to own.
.
Mike,
“Health Savings Accounts are the answer”
Only if the question is: How does business shift the cost of healthcare onto the backs of employees ?
HSAs are the opposite of preventive care, clearly heavily benefit the wealthy, and are basically unfair.
Horrible public policy.
.
VJ,
ok, so 61% of the largest corportions pay no tax? hhhmmm, ok. BTW since my corporations were “hobbies”, what do you do beside complain? oh thats right I dont want to project… comments please… your comment that I claim to own corps, show me enough about your real world experience..check out Office depot sometime… $35.00 and a state filing fee gets you a corporation…
let’s see I was just reading the morning paper here in conservative Phoenix which new development is going to be publicly subsidized, along the same lines of the all the professional sports teams.
Health savings accounts are the biggest joke. I would not care if there was no health insurance for anyone (especially elected officials) then perhaps you could get a price for procedures, sometimes that is nearly impossible.
just a morning ramble, still wondering how boston college is ranked number two after barely beating virginia tech, i saw lsu beat virginia tech like it was a high school team.
VJ
HSA’s are not a joke and are not “unfair”. But I can see how you would think that if your definition of “fair” is a big government socialist program where everyone has equally abysmal health care. Oh, except for the upper class (and there ALWAYS is one) who would end up paying for their own health care because they aren’t stupid and value their lives. Show me a country with “free” public health care for all that does not have that reality.
You look at HSAs as “unfair” because it doesn’t result in “free” health care for all and because if it isn’t free, people supposedly won’t get preventative health care. I mean really, what idiot would get preventative care if it isn’t free? What’s in it for them? Oh, right, good health and a long life. But aside from that VJ, what’s the motivator? They’ll be able to afford it when the free market and competition make the prices go down. Does that mean someone making $15K/year is going to have the same quality of health care that someone making $150K/year? No! AND IT SHOULD NOT! Working hard to get ahead really does have benefits, and that’s the only truly “fair” thing out there.
The other side of this coin is what people expect from their health care system. Health insurance should be like any other insurance – it buys protection from high cost things you can’t really plan for. You want a flu shot? It should be out of your pocket. You need a new kidney? Use the insurance. Costs won’t go down as long as insurance companies need to pay for every little scratch you get or every little (blue) pill you “need”. Like Via— gra, for instance! WTF? GM is the largest buyer of Viag— ra (sorry, needed to get around the spam filter!) because of its retirement health care program. Does that see right to you?
then call it a health account, if there is savings good, if there is a run of bad health, it may be a health bankruptcy account. This idiocy of acronyms HSA, like BSA, and everything you disagree with is socialism, communism, ism, ism.
Are you just a schill for this administration.
Whenever someone explains health savings accounts it is like they are talking to five year olds. O really mister so wise person if only we all saved our money and lived morally we would have a better society, can I say society without risking being a socialist????
you are so patronizing, how good of you to take the time to try and explain these difficult issues to all of us socialist loafers.
Comrade Rexl:
Sorry you don’t like the label, but it fits. Universal health care is big government nanny state forcing the equality of mediocrity on the masses. It is that way in communist Russia, East Germany, Cuba, etc., etc.
I don’t mean to be patronizing but apparently I am not bringing it down to a low enough level for you to understand even now. They are health savings accounts because they are meant for people to use to save up a dedicated fund to pay for health care in the future. The way it would work for the vast majority of people is that you save and get tax free returns for a good number of years while you are young and healthy and that money is enough to pay for your health needs in your older, more sickly days. Now I know, I know, you are saying “But how does that help the child born with – fill in tragic disease here – who never has a chance to save?” It doesn’t. That family will have more expensive options to choose from. Call them “unlucky”. Do I feel for them? Of course. Do I think they and all such unlucky individuals should have as much health care provided for them as the state can rip from my hide? No.
HSAs won’t be the perfect solution for everyone but they share that in common with every other approach. The argument right now is that some want to totally dismantle and re-jigger a health care system that currently covers abiyt 80-85% of the population just fine in order to cover a minority of people who are currently falling through the cracks. That seems short sighted to me. (Oh, and before you start quoting the left wing #s on the “uninsured”, the fact is they are vastly overinflated.)
you are so patronizing, how good of you to take the time to try and explain these difficult issues to all of us socialist loafers.
Hey, it’s the least I can do. I’m between cabinet meetings and Cheney is asleep in the corner so I have some free time on my hands before we get back to strategerizing on how to dick the little guys like you over.
Adios Stretch.
kckid,
in 1992 i was in the same place you are. i had a finance degree from indiana university. there were 863 of us in my class competing for 60 jobs. i added another year of school and a second concentration in MIS. when i graduated in 93, there were 80 of us being competed for by employers representing 800 jobs. we were treated like royalty.
now i run a small non-profit and use both my concentrations and 10 years of broad corporate experience and could not be happier.
in the current market you should look at internet marketing – SEMPO institute has cheap online training that will certify you and get you into a job market that would kill for your finance and writing skills and has a significant shortage. none of us over 35 have ANY skill in this area, making it exclusively yours to own for the next 10 years until maturity. the idea that you can measure ROI on advertising down to the ad copy is just beginning to be appreciated.
Brian,
“ok, so 61% of the largest corportions pay no tax? hhhmmm, ok.”
Take it up with the GAO.
“BTW since my corporations were ‘hobbies’…”
You posted:
“I have had 3 corporations, 2 of witch never paid tax cause they never made money!!!”
According to the IRS, “An activity is presumed carried on for profit if it produced a profit in at least 3 of the last 5 tax years, including the current year“, otherwise, the IRS considers it a hobby.
“what do you do beside complain?”
Care to explain why it is that pointing out that your unsubstantiated beliefs are inaccurate is a form of complaint ?
.
Mike,
“HSA’s are not a joke and are not ‘unfair’.”
I did not post that they were a “joke“.
“But I can see how you would think that if your definition of ‘fair’ is a big government socialist program where everyone has equally abysmal health care.”
A) Interesting that you think you get to assign your definition as my position. Does it stroke your ego when you knock down those little Straw Men you’ve constructed ?
B) No federally elected official in this country, no national person of consequence, let alone myself, has proposed “a big government socialist program where everyone has equally abysmal health care“.
Really, you need to look “socialist” up in a dictionary. You’re making yourself appear foolish.
“You look at HSAs as ‘unfair’ because it doesn’t result in ‘free’ health care for all”
I’m afraid not.
HSAs are unfair, because they are inequitable:
* If I contribute thousands of dollars to an HSA at the start of the year, don’t have any medical consequences during the year, I can use the money at the end of the year for a vacation in Martinique.
* If you contribute thousands of dollars to an HSA at the start of the year, and you are struck in a crosswalk by a hit-and-run and suffer serious injuries, your HSA will be zeroed out.
.
no, you are correct VJ, I shouldn’t even respond to you any longer… you haven’t revealed anything of yourself, besides the fact that you dislike many things with this country. You dont even reveal your name… Have you ever owned a business? I doubt I will get a response since I have asked you this 3 times. So you are sitting in your apartment somewhere disgruntled because some people who are more qualified than you and have worked harder are making more money. But thats ok, according to you, its fair if the government takes from them and gives it back to you. HHMM, ya thats fair… I just like to know if I am dealing with someone that has ANY real world experience or just sits and watches CNN for all your updates.. BTW heres another example of great government programs… While a cop in LA, I was in Hollywood during the 92 earthquake, (my year might be off, but close), anyhow FEMA came to the rescue… well there were about 250 Armeanians (no offense to Armeanian people, its just a fact), and they were lined up to submit their losses… (ya I know there wasnt any damage in Hollywood but thats ok). Anyhow, I witnessed 30 people using the same exact reciepts for goods that were suppossodly broken. Yes the same exact reciepts, they just handed it backwards after they were done submitting it to FEMA… The more money the government takes from us the more which is wasted… Get out of your apartment once in awhile, its a great country… (albiet with many problems, I admit)
VJ
HSAs are unfair, because they are inequitable:
* If I contribute thousands of dollars to an HSA at the start of the year, don’t have any medical consequences during the year, I can use the money at the end of the year for a vacation in Martinique.
* If you contribute thousands of dollars to an HSA at the start of the year, and you are struck in a crosswalk by a hit-and-run and suffer serious injuries, your HSA will be zeroed out.
Are you on crack (and did I somehow get stuck paying for it)? If you have money left over in an HSA at the end of the year and you spend it on a trip to Martinique then you should have spent it on mental health services. An HSA is like an IRA, not like the use it or lose it pre-tax health care money you can set aside in many places now. If you have money left over at the end of the year (and you should, particularly in your young, relatively healthy years) then you LEAVE IT THERE to grow into more $ for your future health care needs! http://en.wikipedia.org/wiki/Health_savings_account
You have a funny definition of “inequitable” as well. In your example, the person who had money set aside for health care but actually had to use it for health care is somehow getting screwed over because the first guy never had to spend the money on health care. That’s pretty funny! HE GOT HEALTH CARE! He WON!
Brian,
Read your own post. You’re the one doing all the complaining.
.
Mike,
You make my point.
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VJ,
More like your examples makes my point. Your twisted definition of “equitable” epitomizes that of the DNC. “Equal” is equal misery. Rather than see that in your example the HSA worked because “I” saved for health care and was able to get it when “I” needed it, your attitude is that “I” got screwed because “you” saved for health care and spent the money on a trip to Martinique. “My” benefit (health care treatment) is somehow cheapened because someone else (“you”) got to spend that money on something luxurious. This is EXACTLY the typical DNC approach to “equality” that conservatives loath. “My” alleged inequity is the price for “your” alleged wealth. It is complete and utter nonsense.
Your example also typifies the view from the left in that you equate the health care to the vacation in a way that implies you are “owed” both (and I’m setting aside the fact that spending that $ on a vacation is anathema to what the HSA is all about but you’ve proven that point is beyond your ken so I won’t dwell on it).
WHAT ????
.