I believe the official recession is a decrease in the GDP for three straight quarters (don't quote me)

Cheesey, It is not the execs. While they make huge amounts of money it is usually in porportion to the business generated.

American cars are overpriced and cannot compete on an equal playing field with the imports. Why? I know many are going to yell "off with his head!" but here is the main sticking point.

Unions.


Every car in America has an extra 5k or more attached to it because of union benefits that Japaneese companies don't have. Add to that the need to pay dividends to stockholders and you have an incredibly small margin in which to create net operating profit. this then leaves less of a margin of error for sales fluctuations.

Any company should be able to adjust and handle a 30% decrease in sales and not be headed to bankruptcy. The Auto industry seems to be the exception.

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You are correct Trippster.
Unions cost more jobs then they protect. And the ones they seem to protect the most are the lazy good for nothings that SHOULDN'T have their jobs.
Of course if we were not taxed to death in this country, and could actually KEEP the money we make, there wouldn't be such a need to push up salarys.
But when you make $16 an hour, and take home $12, and then get taxed to spend it, it's no wonder that other countries can afford to make items cheaper then we can.

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Primary root of the downturn.... the housing crisis. At least the immediate source.. but we were in trouble well before that one could argue.

We can have all the debate we want on the cause of the out of whack risks that banks took on home loans, whether the government drove them to do it or that they operated on greed with the ARM's and such..

But in the end, it illustrates the underlying problem with this country today.. people extending past their means and putting themselves in unhealthy credit positions.

People, banks and businesses.. top to bottom we are a nation of borrowers.. and sooner or later we have to pay the bill.

With the Bush administrations bail out of the banks started a larger deadlier form of borrowing, one in which the current administration is extending.. the worst part, whom do we owe now?

I think as a country we need to re-invent ourselves and learn to live differently within our means. At all levels.

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Bingo. And who pays the bill? Responsible people like me, who save their money, do not own a credit card.

Here's an idea:

If you can't afford something, don't buy it. :thumbright:

I totally agree.

But I have to say that alot of this stuff very missleading aswell. When I see a commercial on TV with people taking a big loan to buy a big BMW, I always wonder how these kind of adds can even be allowed on TV. There are alot of people who are way to naive and just get into these things without giving it a though.

It doesn't justify what they're doing, but still, one more thing.

Bingo!

And yes, Pack93z is indeed correct. Real estate was the start of the recession but it was caused by banks LYING and I'll explain.

What was going on in California and probably half the country as well...

You had Joe Sixpack wanting a house. House costs 500k, but Joe makes 50k a year. So bank tells him "nope, can't do, but whispers that let's say you make 100k a year, wink, wink, nudge, nudge."

So, Joe and bank together lie, Joe owns house. Goes up to 600k. Refis, takes 50k out and buys himself a nice car, remodels a bit, but he's he's now making 52k (he got a raise). With that extra bit of money left over, he can still make payments but it's starting to get tight.

House goes up to 650k, Joe takes another 50k out of the house so he can make the payments because he's now making 54k a year (got another raise).

Then the whole deck of cards falls. Joe can't take any more money out of the house because it's fallen to 400k and he owes 600k. Can't make payments either because him making 100k as we all know was a LIE that the banks winked winked nudged nudged knew all along was a lie.

Joe walks away from the house.

Happened all over California, and I'm sure a lot more states. Did the banks deserve to go out of business for LYING? Damn right they did. But instead we give them $700 billion. And who gets to pay that $700 billion? Your kids. Don't get mad when they stick you in a crappy retirement home. You deserved it. (You means all of us, myself included).

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Yep Yep Yep!

...and stories like that just reiterate the whole outcry for responsibility in this country. If you cannot afford something, then don't buy it. But we are almost force-fed this bloated version of the American dream. I say we destroy the true American dream every day in this country because of the kind of behavior that is going on.

The whole idea of having a credit card scares the poop out of me.

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Hmm, yeah I hate credit cards. I won't ever get one and I'm trying to talk my gf into ditching hers.

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Zombie, partially correct. Only it was the Martgage companies that (Countrywide, USmortgage or something like that) that were doing those loans. Most banks wont do sub prime, or at the very least they will refer to a sub prime lender. Also, banks have way too many dual checks to allow the lying. Mortgage companies didn't because the lenders and the underwriters were too close of a relationship.

What cause the issues is that theSubPrimes then repackaged all those bad loans (with good ones) worth millions and resold them to investment firms as mortgage backed securities. Then the
Investment companies sold them. When the properties went under so did the underlying securities....bringing everyone down.

What investment companies were heavily involved? Shearson Lehman, Bear Stearns, AIG. Not the Banks. the banks invested with Shearson Lehman, AIG etc.....

No one really did enough due diligence into what was really in the mortgage bundles that were being resold. that was a huge part of the problem. Add to that because of the need for profit to increase stock prices and there was never a real desire to kill the cash cow. However, many people even within AIG brought this to their bosses attention without results.

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Credit Cards:


Like anything else, if used properly is a very usefull tool. Here are some rules I would encourage everyone to follow.

1. Yes, you need one. Many hotels, car rentals, etc will not do business if you do not have one.

2. Own two of them. That is all. Put one in your dresser drawer in case the other one is stolen. We are talking about major cards (VISA, MC, AMEX) do not keep any store cards.

3. Use it every month. not a lot, but every month. You need to show activity.

4. Never let the ballance be over 30% of your credit limit. High than that reflects negitively on your credit report.

5. Zero balances and high credit limits also reports negitively.

6. Not having one ususally shows up on credit reports as "insufficiant credit".

Most importantly, before EACH AND EVERY PURCHASE ask your self, including this purchase, can I pay off my credit card with THIS MONTHS INCOME? If so, go ahead and use it.

High credit scores are incredibly important these days. Revolving credit (credit cards) are an intregal part of your score.

Credit cards are not bad anymore than guns are. It is all in the application.


and for those of you who do not know me, yes, this is counsel from a professional.

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