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How is all this financial craziness affecting you...

64 posts in this topic

.....without divulging too much personal information, of course.

I currently have money in the stock market and through work I'm investing in a retirement fund (the latter fairly aggressively, since I've started fairly late in my career).

I've spoken with my stock/retirement guys and they confirmed what I believe, which is to not panic and start moving things around. They said if I was going to be retiring within the next five or so years I might want to make changes, but since that's not the case the best solution for now is to sit tight and not freak out.

I'm very fortunate to have a full time teaching job, but if things get bad enough I don't necessarily feel a high level of security (I'm only in my second year, so I don't have tenure yet). I think things will have to get pretty bad before the college starts laying off full-time faculty, but nothing surprises me anymore. I keep my credit cards paid off and am not buying a house right now, but I am making car payments (I lease my car).

It's scary, I tell ya! I hope for the best for everyone!

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Work wise, I am as busy as hell because if this. I work for a company that deals with all these banks. We process the US debt through our computer systems. The computers I work with are doing on avarage of 4.2 trillion dollars a day in the US debt. We also have information on the health of many of these banks before the information is made public. The worst is not over yet, with the risk of getting in trouble I'll leave it at that.

Personally I’ve had to cut back on some stuff. My wife and child and I do not go out eat as many times as before. Instead of driving my car to the train station to get to work, I am walking. I guess this one is a benefit in two ways. I’m getting excise and secondly I am cutting down on CO2 emissions. The number of music CDs I am buying has also dropped. It sucks.

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Hell, I didn't need no steenking financial crisis to live on the edge!

No, but seriously. I have a very small nest egg in a company investment plan and all the rest of my income (and my wife's) goes into living month to month and paying my mortgage. We save crumbs every month. Even if my savings are halved I'm not out much.

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My investments have taken a big hit like everyone else's. My investments are mostly geared towards retirement (I was hoping to in a position to retire in 4 or 5 years; not that I would necessarily do it; but it's good to know that I could, if I so chose.) But all that's certainly out the window now. Thankfully our house is paid for and in an area where house prices have not gone down too much.

What happened to me recently is this: Our main family car is 9 years old and has nearly 100,000 miles on it. A month or so ago, I thought about buying a new one by taking enough money from from my investment account to do so. (I like to pay cash if I can rather than making finance or lease payments). But then the market started tanking, and I decided that instead of buying a new one to put $1,400 into repairs on this one. My mechanic said the car should be good for another 30-50000 miles. I bet many people are doing this kind of thing. This is going to be a big problem for the economy over the next couple of years - diminished consumer demand. The question is whether GM, Ford, and Chrysler can hang on until demand for autos picks up again in a few years. My guess is that one of them will declare bankruptcy.

Edited by John Tapscott

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i'm retired and was in a conservative fund which was down 5% thru monday, when

i moved most everything into a laddered, long treasury fund, which may have been a bonehead move. now, it's all about the survival of my modest nestegg.

Edited by alocispepraluger102

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Work wise, I am as busy as hell because if this. I work for a company that deals with all these banks. We process the US debt through our computer systems. The computers I work with are doing on avarage of 4.2 trillion dollars a day in the US debt. We also have information on the health of many of these banks before the information is made public. The worst is not over yet, with the risk of getting in trouble I'll leave it at that.

Thanks for cheering us up. :tup

Hell, I didn't need no steenking financial crisis to live on the edge!

That's me.

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i'm retired and was in a conservative fund which was down 5% monday, when

i moved most everything into a laddered, long treasury fund, which may have been a bonehead move. now, it's all about the survival of my modest nestegg.

I thought you were going to say that aloc no longer drinks Pepsi, its the generic brand til further notice. ;)

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Work wise, I am as busy as hell because if this. I work for a company that deals with all these banks. We process the US debt through our computer systems. The computers I work with are doing on avarage of 4.2 trillion dollars a day in the US debt. We also have information on the health of many of these banks before the information is made public. The worst is not over yet, with the risk of getting in trouble I'll leave it at that.

Thanks for cheering us up. :tup

Hell, I didn't need no steenking financial crisis to live on the edge!

That's me.

Sorry but it isn't over. It was just stupid greed that has caused all this and a lack of big brother watching.

The company I work for also handles a large portion of the auto dealerships for 2 of the 3 US auto makers. Don't be surprised if there's going to be a bail out for these guys next. We're in real sad shape. If I was running for the oval office, it's going to take more then two terms to get the US back on the road to recovery, and it's not going to make you look pretty with some choices that need to be made.

Edited by Hardbopjazz

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i'm retired and was in a conservative fund which was down 5% monday, when

i moved most everything into a laddered, long treasury fund, which may have been a bonehead move. now, it's all about the survival of my modest nestegg.

I thought you were going to say that aloc no longer drinks Pepsi, its the generic brand til further notice. ;)

you are somewhat accurate. today i'm sucking coca cola in a personal attempt to change the world.

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My investments have taken a big hit like everyone else's. My investments are mostly geared towards retirement (I was hoping to in a position to retire in 4 or 5 years; not that I would necessarily do it; but it's good to know that I could, if I so chose.) But all that's certainly out the window now. Thankfully our house is paid for and in an area where house prices have not gone down too much.

What happened to me recently is this: Our main family car is 9 years old and has nearly 100,000 miles on it. A month or so ago, I thought about buying a new one by taking enough money from from my investment account to do so. (I like to pay cash if I can rather than making finance or lease payments). But then the market started tanking, and I decided that instead of buying a new one to put $1,400 into repairs on this one. My mechanic said the car should be good for another 30-50000 miles. I bet many people are doing this kind of thing. This is going to be a big problem for the economy over the next couple of years - diminished consumer demand. The question is whether GM, Ford, and Chrysler can hang on until demand for autos picks up again in a few years. My guess is that one of them will declare bankruptcy.

aloc's everyday car has 200,000+ miles and a dozen years on it and he isnt looking.

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i'm retired and was in a conservative fund which was down 5% monday, when

i moved most everything into a laddered, long treasury fund, which may have been a bonehead move. now, it's all about the survival of my modest nestegg.

I thought you were going to say that aloc no longer drinks Pepsi, its the generic brand til further notice. ;)

I think I speak for all Pepsi drinkers when I say that it's gonna take a lot more than a financial crisis, plunging stock markets, and dwindling retirement funds to make us switch away from Pepsi. Take my money, take my car, take my music, but do NOT take my Pepsi! ;)

I am blessed that the crisis has not affected me directly. All I have is a small bank saving account at a very strong bank and a Section 529 plan for my kids that doesn't have that much money in it to begin with.

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i'm retired and was in a conservative fund which was down 5% thru monday, when

i moved most everything into a laddered, long treasury fund, which may have been a bonehead move. now, it's all about the survival of my modest nestegg.

If you were down 5 percent, then you're doing about 35 percent better than many of the rest of us.

My 401k has taken a pretty big hit, but I'm not worried about that. In fact, since I'm still actively buying through the account and retirement is about 10 years out for me, I'm fine with the drop. In the long run it'll be a good thing.

That's the good news.

The bad: It's death by 1,000 cuts where I work, with 10 more people laid off just yesterday. Frankly, we're so thin now there's little incentive anymore for me to bail faster, cause it's pretty apparent the boat is sinking and I could easily be the next one tossed over the side.

I have about enough cash to carry me for a year, but much of it is locked up in a CD until January, and I'm even nervous about that.

It's grim, basically, and I'm just hanging on knowing full well the ax could fall at any time. Actively looking for another job in another industry at my age isn't a happy prospect, especially in this job market.

So .... paper or plastic?

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19:14 GMT +00:00

What's triggering decline?

Posted by: The Economist l WASHINGTON Categories:Financial markets A PORTFOLIO manager described the market’s recent plunge to economist Ed Yardeni as the “greatest margin call of all times”. Indeed. The decline in stock indexes globally cannot reasonably be interpreted as entirely the result of a darker economic future. The relentless downward movement with only the sickliest of rallies has the feel of forced selling. We know hedge funds are large holders of assets around the world—including stocks—and even those that are “long-short” are usually net long. They are selling because of year-end redemption requests, or anticipation of such requests, or to avoid a worsening of their worst year in history.

They are also selling because their lenders—prime brokers such as Morgan Stanley and Goldman Sachs—are becoming much stingier with lines of credit. As stocks plunge, hedge funds must post more collateral, and if they can’t, more of their positions get liquidated. These positions span asset classes and regions, from American stocks to emerging-market bonds, so all are candidates for liquidation to meet cash calls. It is no coincidence that the dollar and yen have rallied against virtually every other currency—many hedge funds borrowed in dollars and yen because of their low interest rates and as they unwind positions, they repay those loans, sending those currencies surging.

Forced selling such as this can provide great buying opportunities, as did the liquidation of Long Term Capital Management in 1998 and the stock-market crash of 1987 (which involved forced selling by portfolio insurers). Mr Yardeni notes that the S&P 500’s forward P/E ratio was 9.3 yesterday (I assume it’s even lower today), the lowest since 1985. That’s an earnings yield of 11%—not bad when Treasuries, with no inflation protection, yield under 4%.

What worries me is, first, that there is a gargantuan amount of assets in weak (ie levered) hands right now. The more selling drives prices down, the more it will force other positions to be liquidated. I am reminded of an evocative phrase Tim Geithner of the New York Fed first used in March of 2007 to describe this process—"The brake becomes the accelerator". This interferes with the natural self-equilibrating process of markets and is deeply demoralising to those who have tried to time the bottom. If it is a margin call, it's impossible to know how much of it is complete.

And second, unlike in 1987 and 1998, this is coming at a time of grave global economic weakness. Falling stocks aggravate that weakness both via negative wealth effects and by making it harder for weakened banks to raise more capital. These latter two effects can make the weaker profit outlook implied by lower stock prices a self-fulfilling prophesy.

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My investments have taken a big hit like everyone else's. My investments are mostly geared towards retirement (I was hoping to in a position to retire in 4 or 5 years; not that I would necessarily do it; but it's good to know that I could, if I so chose.) But all that's certainly out the window now. Thankfully our house is paid for and in an area where house prices have not gone down too much.

What happened to me recently is this: Our main family car is 9 years old and has nearly 100,000 miles on it. A month or so ago, I thought about buying a new one by taking enough money from from my investment account to do so. (I like to pay cash if I can rather than making finance or lease payments). But then the market started tanking, and I decided that instead of buying a new one to put $1,400 into repairs on this one. My mechanic said the car should be good for another 30-50000 miles. I bet many people are doing this kind of thing. This is going to be a big problem for the economy over the next couple of years - diminished consumer demand. The question is whether GM, Ford, and Chrysler can hang on until demand for autos picks up again in a few years. My guess is that one of them will declare bankruptcy.

aloc's everyday car has 200,000+ miles and a dozen years on it and he isnt looking.

Well, that's one thing I do have going for me. I've always tried to live near transit and/or close enough to bike to work. We have a car that is probably 7 years old, and has fewer than 11,000 miles on it. (Most of this was my wife driving actually.) So we probably won't be getting a new car for years. While I've actually thought about getting a Prius from time to time, given how little we drive, we would never make back the up-front investment. (Our car is a compact anyway.)

I haven't felt much yet, though I did notice that my college fund accounts for my kids were way off. That bums me out, but I'll just ride it through like most people.

I probably ought to cut back a bit more, but I've never gone off and spent more than I earned. Like Jim, I insisted on getting a fixed rate mortgage (and we did buy less than we wanted but it was something we could afford), so am not too worried about a ballooning rate or going upside down or anything like that.

Eric

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I don't know how this affects me really. I hope that my state pension is safe. I hope that my dwindling savings in a credit union is safe. I own my house and am scared by my property taxes but oh well. I have a brand new motorcycle, paid for. I feel luckyl I hope that the economy slowly or quickly gets better for everyone.

Edited by jazzbo

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I am a recent grad in my first "real" post-grad academic position. I've been check-to-check for several years and still will be for a little while. I suppose big vinyl purchases will have to be cut off for awhile, though I guess on the consumer end more "specialty" items will be cheaper.

I don't own my house, but rent it. My car is in good shape and paid off. Guess I'm one of those not-on-the-radar broke mofos... invariably this meltdown will affect things like getting on tenure track, etc., in the coming year or two, but I been down so long I don't know which way is up...

Edited by clifford_thornton

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Up is the direction you're going in CT! ;) I think you're going to slowly start consolidating and getting solid.

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Hasn't really affected me yet. I was broke before it started, so any traumatic losses were already dealt with... :g

I'm extremely nervous about the future, however. Retail numbers are absolutely horrible right now; people have just stopped spending, which is going to (of course) make things even worse. I work as a bookkeeper at a large grocery store right now. There's three of us. I could easily design a system that would enable them to cut that to one full time and one part time bookkeeper. Easily. And, of course, I'm number three... :ph34r:

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Up is the direction you're going in CT! ;) I think you're going to slowly start consolidating and getting solid.

Thanks for the props. Just got to keep that eBay trigger finger in check!

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Doesn't make a damn bit of difference to me. I was financially fucked before this whole thing started...I'm just as fucked now. If things don't get better on the job front soon then I'm going to be buying some of these...

Fukitall.jpg

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i'm retired and was in a conservative fund which was down 5% thru monday, when

i moved most everything into a laddered, long treasury fund, which may have been a bonehead move. now, it's all about the survival of my modest nestegg.

If you were down 5 percent, then you're doing about 35 percent better than many of the rest of us.

My 401k has taken a pretty big hit, but I'm not worried about that. In fact, since I'm still actively buying through the account and retirement is about 10 years out for me, I'm fine with the drop. In the long run it'll be a good thing.

That's the good news.

The bad: It's death by 1,000 cuts where I work, with 10 more people laid off just yesterday. Frankly, we're so thin now there's little incentive anymore for me to bail faster, cause it's pretty apparent the boat is sinking and I could easily be the next one tossed over the side.

I have about enough cash to carry me for a year, but much of it is locked up in a CD until January, and I'm even nervous about that.

It's grim, basically, and I'm just hanging on knowing full well the ax could fall at any time. Actively looking for another job in another industry at my age isn't a happy prospect, especially in this job market.

So .... paper or plastic?

I feel your pain.

Last year, I took the plunge and reentered school at the age of 48. I'm in my second semester of nursing school. Had no background nor experience in healthcare prior to that. Wanted to focus on an area that was the closest thing to a "guaranteed job."

It's never too late to make a change.

Now I'm somewhat sheltered from this mess since I'm in school and just living on school loans. Hope the job market improves in another year when I start looking.

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I don't have much savings besides my old 401ks and IRA. I'm sure they've taken a good hit, but I don't really give a crap. My outlook for using the money is still 10+ years away. Too much can happen before then.

Our investments will bounce back; and they will bounce back amazingly quickly, imo. But I fear the economic shakeout of this crash--what it means for consumer spending, business investments, jobs, etc. I'm not convinced that the automakers will survive this mess. At least one of them could fail.

As far as banks are concerned, I have no doubt that more failures like ahead. Ironically, I think the safest place to have your money right now would be in mutual funds invested in the stock exchange. A diversified equity portfolio won't go to zero.

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My wife and half of her department were laid off last April, so things have been a bit tight for us already. I'm definitely watching pennies now, almost literally... trying to bike to work as much as possible (very easy to do here in Bloomington), eat out less, always shop at the grocery co-op on member discount day, and definitely cut back on the CD/book/DVD buying. (Last week I bought the Andrew Hill/Chico Hamilton CD on an impulse and immediately felt guilty afterwards.) I'm up to my ears (so to speak) in music I haven't gotten around to listening to yet anyway, not to mention music that I'd love to revisit, and the same thing goes for books and DVDs. My workplace is pretty financially sound, as such workplaces go, but I am concerned about what might happen at the start of our next fiscal year (July 2009). My 401K has taken a huge hit, but I'm still so far away from retirement that I'm not too concerned about that. Still scheming to get the Goodman/Braxton Mosaics by the end of November, but it's going to take some freelance writing work to make that possible. We have our anxieties, but in the grand scheme of things we're still pretty lucky at this point. We have a long ways to go on paying off our house (and we're both still paying off large student loan debts), but if worst came to worst we could divide it back into two apartments again and rent the upstairs out.

In short, trying to lead a much leaner life, but I think there's some good meaning to be found there. A big difference, though, between leaner times and desperate/dire straits.

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No CDs - well maybe 1 or 2 per month.

No books.

No travel.

Fewer meals out.

Lots of hiking & TV.

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