richard_nogginn

Consumer Credit Drops Sharply

I hadn't thought about paying for energy using credit cards. That is pretty sorrowful. There are hundreds of square miles of tree damage in Oklahoma, Kansas, and Missouri that are there for the taking. Anyone with at least a pickup truck and a chainsaw is welcome to it. Landowners and the States will be appreciative, plus it can be put to good use as firewood to reduce debt due to energy costs next winter.


On Apr 08 09:01 AM TeresaE wrote:

> The banks, while relying on "taxpayers" are busy bankrupting who?
> Taxpayers.
>
> Great freakin plan they have.
>
> My guess is that 2 things are occuring, January's uptick may have
> something to do with people running up their debts before filing.
> If you know you can't make full payments, the company cuts your available
> credit and you lose your job, your filing. Cash out while the cashing
> is good. Also, December was cold and I know many people/companies
> that ended up charging their utility bills.
>
> As for the February drop, I believe many of us have finally figured
> out that we have been duped and that 25% or more of your income paying
> interest will never lead to security. Tax returns in, credit card
> debt paid off. Wish everyone else would wake up.

Unconventional Wisdom: Consumers Are Reducing Debt in Recession

People are finally becoming more savvy with their personal finances. If they save for it, then buy it the amount of spending can approach levels previously associated with debt. For instance, Person A pays off his car and keeps making car payments to his/her savings account, during their ownership of the car. When the car quits, person A has enough saved to buy another car or at least make a significant down payment. Did spending change in this model? No. What changed is the timing of when money is spent. The debt model was set up to keep consumers paying rates that they cannot control. Savings models return that control to the consumer.

To me, indebtedness is a form of slavery and we have become a nation of slaves. It is up to us to decide if we want ourselves and our children to continue to be slaves--or choose freedom.


On Apr 08 09:06 AM cabaretewilliam wrote:

> The above comment - spend more- leads right back inbot the mess.
> Save and spend what you have saved!

Will Government Spending Work?

First of all. The USG has to lose the idea they can wallpaper over a trust problem by printing new dollars. It causes more problems than it cures and there are trillions of dollars not being invested until trust is addressed. The USG has to lose the idea they can create jobs. That will work for a short time.

The truth is that banking has an entire section of the federal code of regulations (12CFR) they are supposed to adhere to. That means they are already tightly regulated. The Bush administration either winked and nodded when banks did not follow regulation or they were negligent in the duties and responsibilities of a regulator. It was the gross failure of our government to perform its oversight duties that got us here.

Therefore in order to regain investor trust three things have to occur: any bad assets must be assigned fair value, a place to store the bad assets must be provided, and the government needs to profile bank or banks that violated their regulatory boundaries.

A reverse auction is the fastest way to assign fair value and provide a means for treasury to purchase the assets at fair value. Each bank has to value their bad assets and treasury purchases those of lowest value/market segment. During the S and L crisis of the 1980's the federal home banks were used to store bad assets. Since that precedent has been set, they need to be used in that capacity again. When investors see these assets at fair value they should start competing with treasury, so not all bad assets will wind up at auction.

Finally in order to assure the rest of the world that the USG will ensure banks comply with regulation, one or more banks will have to be slapped in public. Again the keys:
force banks to evalutate their bad assets fairly via reverse auction
use federal home loan banks to store some of the bad assets
allow investors to compete once they see fair value is being assigned
ensure public is aware that bankers are being punished for violating regulation.

Value Investing: Five Most Searched Stocks

I would anticipate GE to be a winner in the next 5 years, not because of past performance, but because they design power generators. Toshiba, Siemens, and GM should also be bought, based on the Obama Administrations energy plan. Toshiba/Westinghouse and Siemens make electrical power components.

GM is included, because they own the majority of shares in two different pilot plants for producing ethanol for under a buck/gallon. The Wisconsin plant uses heat and can convert anything (including old tires and garbage) into ethanol. It will begin producing 100,000 gal/day late next year. The Massachusetts plant uses genetically altered bacteria to convert woody brush, switch grass, and field stubble into ethanol. It will begin producing 250,000 gal/day in 2012. Ethanol that does not challenge our food production and costs less than a buck to produce directly challenges gasoline as fuel. If GM stays out of bankruptcy until the end of next year, they will have a completely new revenue stream. If they become bankrupt the best we will ever see is the lab results.

I don't agree with the Obama plan as far as wind and solar energy go, because forcing GE and Toshiba/Westinghouse to increase coal plant efficiency can cut in half during the next decade. Congress should be writing legislation for electrical power similar to what they have done for automobiles. Folks 2/3's of the heat made by coal is wasted and the methods used by geothermal energy producers can cut the waste in half.

Russian Currency Watch: Ruble Update

The USG is going to find they cannot paper over this downturn, like they have in previous downturns. It is going to take hard currency, based on something of value to shore the dollar up

Fannie, Freddie and the 4.5% Mortgage Myth

My personal opinion is that all ARMs should be turned into fixed rates, and ARMs outlawed. I've seen good families torn apart when their wages didn't keep pace with the increase in rates.

Unimproved property just outside the city limits is still a good buy, although prices are still increasing.

Big Stocks Under a Buck

Diane, I'd rather they give the next 350 billion to every adult American. I promise to start spending my share immediately.

Big Stocks Under a Buck

I took a gamble and bought 1000 shares of Fannie at 0.95 a share, because I don't think either party has enough political will to lose them. They are a pretty valuable tool to use without congressional approval.

I'm waiting for IBC (Hostess/Dolly Madison) to get out of bankruptcy in February and buy their stock. I'd gamble on GM if I knew Congress was going to help them out.

The Convertibles Collapse Offers Investment Lessons for All Investors

Thank you for your analysis. I'm betting there were some individuals who raised the red flag and got told by management "It can't happen here." Those individual were probably given the opportunity to excel elsewhere.

Had management worried that "Anything wrong can happen at least once for any given industry" they might have taken a more critical look.

Should We Really Bail Out the Big Three Automakers with $73.20 Per Hour Labor?

Nappy, that comment got a chuckle out of me. User I'm pro-union too, because I have benefited from my membership. However, I'm not pro-UAW and here is why.

When I worked for GM installing parking brakes, one day the line suddenly stopped. It turned out that a mixed race couple working in the paint booth had been arguing over the man being a cheat. During the argument he stabbed her. That caused the line to shut down, because unpainted cars were downstream of the paint booth. Two days later the guy was back at work, while the woman laid in a hospital. Apparently the union forced GM to put him back to work. From that moment on I knew they were too powerful and would eventually kill the golden goose.

Another thing the union did wrong was not to encourage union employees to work up through the ranks, educate themselves, and join the management team. Therefore, management and union officials were always at odds, instead of finding ways to work together. The electrical industry paid 75% of my college education, because they know the value of a manager who worked their way up. A meter of cooperation is much more valuable than a kilometer of competition.

I don't drive a Toyota. Had two and hated them. At the moment I'm driving a 2001 Buick Century with a v6. I love it. GM v6 engines are almost as economical as Toyota 4 bangers.

Should We Really Bail Out the Big Three Automakers with $73.20 Per Hour Labor?

Thanks for your comments leapingcat. I've heard the adage that when the USA sneezes the rest of the world catches a cold. How that happens I don't have a clue.

I'm pretty tired of reading rants and finger pointing. All that does is raise the blood pressure and make the heart work harder. Today, we have a unique opportunity to pull together, brainstorm, and find our way out of this mess. In order to do that we have to focus our attention on what methods will work the best in the US economy.

My personal choices are:
1. Increase manufacturing by making our own shoes, TVs, washing machines, garbage cans, etc. The selected manufacturing components must be subsidized in order to compete with foreign products.

2. We must continue to innovate. We haven't put any new products on the market since we commercialized GPS. Our economy is risk when we do not create new products. (GM is supporting two initiatives that will make ethanol for less than a dollar a gallon). Our economy is predicated on free thinking r & d. If it means allowing full stem cell research, then so be it.

3. Open up new markets. I believe the most recent market to open is the CO2 trading system in Europe. New markets create new wealth.

Should We Really Bail Out the Big Three Automakers with $73.20 Per Hour Labor?

Uh plumber Employment at will is exactly why unions are needed. The ploy used to get employment at will laws passed is that the law gives a person the right to work! If you take the time to read employment at will laws you will find that the law actually gives an employer such as you, the right to hire and fire at will.

Now I know you aint a real plumber because if you were you would have been part of AFL-CIO. That is the union that regulates a plumbers wage. If you were a licensed, union plumber you wouldn't be so mad about working 70 hrs a week for little or nothing, because you too would be protected. Now did the auto workers elect the wrong union leaders and almost kill the golden goose? Of course they did. Does Toyota, Nissan, VW, et. a. recognize it? yep. The way they handle their workforce used to be by ensuring the oriental paternal management concept was enforced, vs the western model.

How do companies such as Wal-mart and Tyson's keep unions out? They scare the hell out of their employees.

However, Joe you are absolutely right. Without banding together to ensure our protection, we leave ourselves open to having to work long hours for little pay, too high healthcare payments, and no pension (other than SS). I would attempt to organize my fellow manual laborers to at least get healthcare costs down and ensure we have a pension in our old age. Believe me, management will do their best to keep you from organizing, because the union will cut into their pay. They may go as far as to fire bomb your house so be aware and protect your family. Once you organize though you find the benefits of being union greatly outweigh the risks. If my company had not organized I wouldn't be on medical retirement now, or have the opportunity to pay my house off. I would have been out the door with a "see ya, wouldn't want to be ya".

I've seen college educated engineers up through PHDs join the union for their own protection. The same goes for Chemists and Physicists. They became the backbone of our unit and a select few have moved on from union to management positions. With them moving into management, our company management is now much more sensitive to the needs of their employees.

Self employed I read where you were dissing auto workers for spending their pay increases. Since you are self employed I also know that you held any employees pay to little or nothing, while you increased the costs for your products, relative to their pay increase. I'm betting you were salivating each time you heard they might get paid more. You also know that you directly benefited from it. So cut the BS.

Should We Really Bail Out the Big Three Automakers with $73.20 Per Hour Labor?

Wow there are a lot of comments!! I'm a disabled IBEW union worker, and I believe I have a solution for "legacy" payments. If companies that hire union welders, electricians, riggers, etc. took time to look, they would find that the unions are much better at gaining good healthcare benefits at lower costs. That's because the total of the union workforce is much greater than it is at any one company. IBEW is doing it now.

Of all the hourly people in the country, Nuclear Reactor Operators should be the highest paid. This is because they can go to prison or be heavily fined if they screw up. Unfortunately UAW workers make the same wage. I've worked at the Fairfax GM plant, so I know what assembly line workers do. It's the same thing over and over again.

In every union there are people who want to kill the golden goose. You know the type...me, me, for me. If they become business managers or chief stewards the results can get ugly. It is up to the rank and file to elect responsible officials.

I realize there are quite a few people that do not understand what a union is supposed to do. The intent of a union is not money, money, money. The intent is to give the working man a voice. If a worker is being bullied, hit, or harassed it is the unions responsibility to help the employee file a grievance. Grievance resolutions always include at least one steward, one mid level manager, and the employee. The union is also responsible for ensuring the employee is paid a fair days wage for a fair days work. Our grandfathers and great-grandfathers shed their blood for that one. The union is responsible to ensure the companies overtime policies are fair. If an employee is being forced to work overtime, the employee should be paid fairly. It is the unions duty to ensure that companies provide adequate vacation time and sick leave. There is more but this is getting a little long.

Lastly...Union contracts set the wages for the rest of the country.

Three Problems with the Fannie / Freddie Mortgage Modifications

If I were in the situation of loosing my home for whatever reason or having government assistance, I'd stay. Yeah the value might be down and yeah it will take along time to get it back, but the kids wouldn't be uprooted and I would keep the wife happy. As far a I'm concerned those intangibles are worth more than money.

I saw comments about rent. Actually we all are paying rent until we get the mortgage paid off. After the mortgage is paid the house can still be taken away in some States using eminent domain laws. I'm sure there will be some morons who will try to use 90 day delinquencies to lower their payments. I'm just as sure that in 180 days there will be a law passed making that illegal and it will be backdated till 11/11/08.

I think adjustable rate mortgages need to be scrapped and balloon payments made illegal. Both of these methods add fuel to the fire. In the 1970's all mortgages (that I knew about) were fixed 15 or 30 year rates.

Folks who have a few thousand to spare might want to go look at the houses for sale at Fannies website. You can find some pretty good bargains. Fannie has 67,000 homes to get off the books so it's sale time.

GM: Charging Forward with the Volt?

ATWshop
I purchased an Opel GT over 30 years ago that gave 34 mpg... the Opel was a sub-line sold thru GM Dealers. Then for some odd reason, the entire line was taken off the market. You figure out why... it was a great car with great features and great gas mileage = why take it off the market???

The reason the Opel was taken off of the US market is that it didn't sell very well here. Toyota today uses the same 4 banger they did in the 70's with a few updates. The 72 Corolla I had got 32 mpg highway with a manual transmission and a 1800 CC motor (1800 CC = 1.8L). The 2001 Century I have now gets 30 mpg highway with a 3.0L V6 and 4 speed automatic. Oh yeah that's cause GM invented the throttle body and went back to using overdrive.

All the gushing over Toyota's hybrid makes me sick. The system was invented by EPA labs. All Toyota did was copy the drawings once the EPA patent expired. EPA labs have now put a hydraulic hybrid system together that is 75% efficient vs 25% for the electrical hybrids.