World economy talk

[uls]

^^

the good old days won't be back very soon.

yes banks are now more cautious.

[Monseratto]

Reminds me of the movie "Fun with Dick and Jane". But this is indeed very depressing read...Be happy you still have a house to go home to.

Bruce Richall is an IT consultant based in the affluent Connecticut suburb of Westport. He describes how the loss of his job at a multinational bank triggered a rapid spiral into poverty. Having depleted his savings and unable to afford rent, he now sleeps in the back of his car.

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"In the back of my mind, I hoped it wouldn't happen to me.

I saw bank workers being escorted off the property, clutching their boxes. It was very chilling to witness departing co-workers.

The bank where I worked had already undergone a series of lay-offs in the previous months.

I really liked my job and wanted to keep it. I joined in February, and having worked for many years as an IT contractor - with its inherent instability - this position offered the potential of a full-time position. It could become a "secure" job.

But when security guards made simple, routine rounds though the cubes and offices, people would look up from their desks.

There would be a sigh of relief as the guards kept going.

I never thought it would ever come down to this, but here I am - homeless

But it didn't happen this time. On a Friday, my manager came to my desk. Usually he came by to ask me if I could put in some overtime. But, just by the look on his face, I could tell. This wasn't an overtime request. This is it, I said to myself.

Sure enough, I was told that my last day would be the end of the month.

Though I didn't show it outwardly, I was devastated.

I would have another month before leaving so that I could start yet another job search. I immediately contacted my agency to let them know that the assignment would be ending.

My last day at the bank was bitter-sweet. There was a cake and a card. We joked but inside I was truly frightened. I asked myself what would happen to me now, in such a difficult job market? Would I become homeless?

At the end of my last day, my manager came downstairs with me. We had a cigarette and talked.

"Bruce, if I can get you back here, you know I will," he said. His words were kind and well-intentioned.

My life today has changed dramatically since my brief tenure with the bank.

Now I'm facing a very uncertain future.

I'm no longer collecting a nice pay check, going to work every day and returning home at night. I'm no longer a part of the team I so enjoyed working with.

Months passed as my savings gradually dwindled. I was only collecting a small unemployment check from a low paying "between-jobs" job that I had prior to signing on with the bank.

I had to move from my apartment, put my belongings in storage and find a homeless shelter.

I now sleep in the back of my car, while I wait for a bed to become available at the shelter. I call it The Hotel Honda.

I keep a good suit and a dress shirt in the back of the car for interviews. I tell recruiters that I'm working.

This is not the life I imagined for myself when I graduated from university. I never thought it would ever come down to this, but here I am - homeless.

Unlike the Europeans, we in the US don't have much of a social safety net.

My meagre unemployment income is too high to let me qualify for Social Services, yet far too inadequate to pay for my home, food, car, utilities and health insurance.

I have hypertension, yet I can't afford a doctor, the emergency room or vital medication. I need a corrective eye surgery that I can't afford. Even routine check-ups are out of reach.

My meals are taken at a soup kitchen. This is poverty.

What galls me the most is that about one third of my income is taxed. I'm taxed on what I earn and taxed on what I spend.

Now that I'm in need there is nowhere to turn.

Nobody is helping me except for my contributions to my unemployment account.

Yet our leaders have found a way to bail out the very institutions that have put myself, and others, at risk.

http://news.bbc.co.uk/2/hi/business/7681978.stm

[uls]

That's sad.

---

Now that fear of global financial meltdown has subsided,

the market is now concerned with recession.

[Monseratto]

Stock Markets continue to plunge. I haven't seen prices this low since 2003. I hope it reaches the bottom sooner than later.

The earnings outlook for big companies are bleak. Money is now something that have to be earned...

[tidus1203]

Its not about finding the bottom its more about stability. Even if we bottom out it does not mean stocks will go higher from there it could be flat and that still is a lot of wealth destruction. Don't count on the stock market. I would look more on oil and hope it bottoms out soon Because I am just waiting for it to do so and deploy some money on it.

[tidus1203]

Its not about finding the bottom its more about stability. Even if we bottom out it does not mean stocks will go higher from there it could be flat and that still is a lot of wealth destruction. Don't count on the stock market. I would look more on oil and hope it bottoms out soon Because I am just waiting for it to do so and deploy some money on it.

[uls]

people are still scared.

Things are very bad.

They are dumping stocks, commodities (even gold!)...

follow the money...

where did the money go?

T bills.

[tidus1203]

Actually I am shorting LONG TERM US Treasurues. 10 years and 20 years. Pero yung mga short term. 6 months to 1 year that's bullish.

[uls]

long term, i'm shorting the US

US sovereign rating should be downgraded

hehehe

If i own US T bills, i would be buying credit default swaps

haha

[tidus1203]

Actually my reason for shorting LONG TERMS is because of the massive inflation they are creating right now. Mainstream economists define inflation as rising prices, but tidus1203 defines inflation as increase in the supply of money. In 20 years those bonds are virtually worthless after all the inflation erodes its value and the interest rates are not even worth that much.

[uls]

Yan naman talaga e...

inflation is caused by too much money being created.

I heard last night the US govt is issuing new Tbills at the rate of $40B a day.

and the market is buying it up.

Coz there's no other "safer" place to park money right now.

but when things get better, money will go back into stocks and commodities...

Demand for T bills will drop.

[CVT]

Coz there's no other "safer" place to park money right now.

^^^ With that, you keep the number, but not necessarily the value....

Can't blame those who did that though.....

6909:seehearspeak:

[tidus1203]

Better to keep the number and lose the value then lose the number and the value all together

[uls]

Ya ganun nga ang thinking ngayon...

di bale na halos walang kita ang pera sa T bills...

kesa mag evaporate ang pera sa stocks

[tidus1203]

Safest pa din sakin is the Japanese Yen. Yes mababa interest rates, but also their inflation is low. REALLY LOW. 1% lang ata... SO just park your Yen in JGB's (Japanese Government bonds) and you should be sleeping nicely. Add that its appreciating against the USD, EUR, and GBP so in terms of those currencies you also get a nice capital appreciation.

[uls]

Quote of the day:

Jim Reid, Deutsche Bank:

It’s a depressing world when the only safe haven at the moment is a country that has recently nationalised its two largest mortgage companies, bailed out the world’s largest insurance company, is spending $700bn buying toxic assets, is injecting $250m into its largest banks after high profile failures and is about to go on a fiscal expansion the likes it has never before seen in its history.

[uls]

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[badsekktor]

maybe OT but do you think that the bailout is going to work? or would it just buy some time before the inevitable happens?

[uls]

^^^

Kung total financial meltdown... hindi siguro mangyayari... pero almost nangyari yan.

but what can happen is the banks will still need more capital as more and more loans turn bad.

The US and European governments will have to inject more capital into their banks.

So later on, the governments will not own only 10% or 15% of the banks, they could end up owning them almost entirely.

[tidus1203]

Its never going to work and they have not learned the lesson. You can't throw money into the problem, money does not solve confidence. Only time can heal confidence. So in other words what I am saying is the fast and quick and deep recession is what we need to cure this problem. They have not learned their lesson. They already tried the stimulus route earlier this year and all those money went to the backburner.