[Vision2020] [Bulk] Re: Better Match Investment Timelines

[Paul Rumelhart]

Ted Moffett wrote:
> http://www.marketwatch.com/news/story/economists-say-2008-year-forget/story.aspx?guid=%7BF1BD8B30-B628-4AA3-853E-1FDD8D54A33E%7D
>
>  
> "The recession is likely to be a serious one," said Dean Baker, 
> co-director of the Center for Economic and Policy Research.
>  
> He estimated losses in prime mortgages will be two to three times the 
> $160-$200 billion hit seen in the subprime sector. This, he said, will 
> lead to large losses at banks and difficulty for Fannie Mae and 
> Freddie Mac.
>  
> University of Chicago professor of finance and former chief economist 
> at the International Monetary Fund, Raghuram Rajan, said questions in 
> the media over whether the U.S. economy will fall into recession are 
> really only about semantics.
>  
> "We are going to have very low growth in the first two quarters of the 
> year. Whether it is negative or zero, it is going to feel like the 
> same thing," Rajan said.

The big question is: are we going to learn from this?  Will the average 
American stop racking up tons of credit card debt, and stop taking out 
questionable loans that should have sounded too good to be true? 

Some statistics I found on the net (from 
http://www.fool.com/ccc/secrets/secrets.htm):

    * Total consumer credit: $1.7 trillion.
    * Credit card debt carried by the average American: $8,562.
    * Total finance charges Americans paid in 2001: $50 billion.
    * Percent of U.S. households deemed credit worthy by the lending
      industry: 78%.
    * Number of credit card holders who declared bankruptcy last year:
      1.3 million.


Also, 75% of credit card company revenues come from finance charges.  
They are also talking about starting to penalize those who pay off their 
credit card bills every month.

Until we fix this problem, we'll be bouncing in and out of recessions 
forever.  The only answer I see to this is education and discipline.  
For example, don't buy that 60" plasma screen TV if you really can't 
afford it.  This isn't rocket science.

Paul