[Vision2020] And the Saga Continues . . . (unfortunately)

Mon Aug 8 13:23:49 PDT 2011

Sometimes families, businesses, and other organizations get so far in debt that the probability of them making good on their debts is extremely low.

That's why we have bankruptcy laws.

I think many of these laws are ill-designed, ill-used and abused, and are often used by the unscrupulous.

That said, there are sometimes situations beyond a person's or organization's control that place them in such impossible to pay off debts situations such as medical expenses for individuals or long term drought for farmers.  Hence, I think some kinds of bankruptcy protection is desirable.

Are we approaching the previously unthinkable for our country  -- is the current debt and current commitments nearing the point of where it may be extremely improbable to pay it off?

I don't know, but I suspect that some of those selling off now are seeing that their assets are in really grave peril, if not facing almost total loss in the short and middle term.

One sign that only a few have picked up on is that some banks are beginning to charge depositors to hold their money instead of paying interest on the money.

http://www.marketwatch.com/story/bank-of-ny-said-charging-for-big-cash-positions-2011-08-04?reflink=MW_news_stmp

In my opinion this is a horrendously bad sign:

1.    Banks have little confidence that any turn around will happen soon and do not see ways of  investing money to make much money in the near future.

2.    Banks intend to make as much money out this misery as they can.

3.    This is a time where intelligently designed regulation of all financial institutions is necessary --regulation that does not stifle honest and creative entrepreneurship, but prevents fraud, excessive greed/taking advantage, and unnecessary risk taking with depositor's and investor's funds.

The economists are not of great help here.  There is no generally accepted economic theory and predictive body of knowledge agreed upon by the majority of economists.  The rosy predictions of the so-called "trickle down" theories have grossly failed to materialize;  tax breaks as incentives have not worked well for about 40 years in fact, we had a surplus of business growth/revenue just after Clinton raised taxes.

I don't have an answer, but we need to stop doing what isn't working.  When a family is in debt, they need to reduce spending and try to increase revenue, else they will never get out of debt.  This country and other countries need to do the same before the problems become irreversible.

In the long run I think we need to reduce the national debt to zero, not allow deficit spending except in well defined emergencies, and then only when the debt permission includes a fixed term pay off plan.  

But this needs to be done very carefully.  Wealth is created by the production and sale of goods and services, and the collection of what is owed for these items.  Large scale layoffs reduce in one fell swoop spendable income and thus the demand/purchase/payment for goods and services.

The other part of the debate is what services as a country do we want  -- we are one of the lowest taxed industrialized nations.  Many so-called Christians, especially tea baggers, claim we are a Christian country.  Some of these same people are the ones who wish to greatly downsize or to eliminate programs which care for the unfortunate -- a position that seems quite contrary to the clear teachings of Jesus, who is alleged to had have something to do with Christianity..

w.

From: Jay Borden 
Sent: Monday, August 08, 2011 12:32 PM
To: Paul Rumelhart ; Tom Hansen 
Cc: Moscow Vision 2020 
Subject: Re: [Vision2020] And the Saga Continues . . . (unfortunately)

Paul:

There are two large factors...

1)  auto selling of securities holdings that specify the portfolio must have a % of investments carrying a AAA rating (like tbills)

2)  investment horizon.  You and I have the luxury of time.  We can let our money sit.  Others on the fringe of retirement are seeing their nest eggs lie in ruins and are pulling out for salvage.... fearing the market wont recover again on their windows of time.

Jay

Sent via DROID... so ignore the typpos

-----Original message-----

  From: Paul Rumelhart <godshatter at yahoo.com>
  To: Tom Hansen <thansen at moscow.com>
  Cc: Moscow Vision 2020 <vision2020 at moscow.com>
  Sent: Mon, Aug 8, 2011 19:17:14 GMT+00:00
  Subject: Re: [Vision2020] And the Saga Continues . . . (unfortunately)

  I don't understand this.  Really, what's changed that affects any given stocks fundamentals?  If I own a stock I bought prior to last week, what has fundamentally changed about that stock that I should start assuming it's not just going to climb it's way back up to where it was as soon as the panicked sheep have stopped slashing their own throats?  Unless I have reason to believe that my stock will plummet to zero, I would think that the last thing I should do now would be to sell.  On the other hand, if I had the money I'd buy lots of good, sound stocks that have fallen in value that someone else has sold out of some hazy "fear of the financial situation" and ride them  back up to where they were in a few weeks time when this whole stock market hysteria blows over.

  Paul

  On 08/08/2011 07:58 AM, Tom Hansen wrote: 
    The market as of 10:50 AM (New York Stock Exchange Time), today.

    Thank you, Tea Party!

    The DOW is down almost 1,200 points . . . SINCE TUESDAY!!!!!!!!!!!!!!

    One can hardly imagine what to expect from the 12-member super congress panel in November . . .

    Second verse same as the first, a little bit louder, a little bit worse.

    Seeya round town, Moscow.

    Tom Hansen

    Moscow, Idaho

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