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Old 2014-01-18, 04:46   #1
Fusion_power
 
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Aug 2003
Snicker, AL

7×137 Posts
Default Ye Olde Mystery economic theatre 2014

Ok, so we had one thread that got on somebody's nerves. Here is a fresh start. Please keep posts ON TOPIC. The topic is the economy and relevant financial discourse.

Here is a summary, my anecdotal impression of the current economy.

The massive economic meltdown of 2007/2008 was primarily driven by massive mortgage fraud. This fraud was based on borrowers who had no income to support the loans they were given and lenders who decreased standards until a corpse could get a loan (I think I saw it breathe, it definitely moved!).

The meltdown was followed by economic chaos for 3 years with massive bankruptcies in the business (GMC) and governmental (Birmingham Alabama) arenas. European conditions were severely challenged by defunct economies in Greece, Ireland, Iceland, Italy, Spain, and Portugal that resulted in several bailouts. Large banks in the U.S. were bailed out via a series of money injections that kept them afloat transferring risk from the bank owners onto citizens. Jobs were difficult to find and often involved pay decreases into the minimum wage range.

Regulatory oversight was and still is seriously compromised. While about $50 billion in fines are expected to hit large banking interests, this does not even begin to reflect the trillions of dollars of losses incurred in the overall economy.

Current 2014 conditions in the U.S. are somewhat improved compared to 5 years ago. The overall jobless rate is a few points below highs reached 4 years ago. Worrisome issues include manufacturing jobs that have migrated to lower wage countries like China, movement of workers into service sector jobs that typically pay low wages, and a trend toward more automated manufacturing. The number of young people entering the workforce exceeds the job creation rate which is producing a wage stagnation/regression environment. All of these indicate extreme challenges in the next 20 years to maintain a viable economy.

Retirement concerns are the focus of a large number of people in the 45 to 65 year old range. Roughly 65% of current retirees have to rely primarily on social security for retirement income. Savings rates for retirement are affected by reduced wages, loss of jobs, and a still limping economy.

So have at it. What economic malaise should we dig into?

Last fiddled with by Fusion_power on 2014-01-18 at 04:51
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