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World Economy Status - Why is it so bad?





ganesh
The current recession around the world is impacting a lot of people. Many are losing jobs. The cause of this recession has been traced back to the status of the US economy in particular.

I came across this opinion piece in the New York Times website:

http://www.nytimes.com/2008/12/24/opinion/24friedman.html?_r=1&ref=opinion

It opines that money is being invested to churn out management guys, those who are in the business of making money out of money, rather than in actual innovation. What is the opinion of fellow Frihosters? Do you all think that these money managing middlemen need to be gotten rid of? In the area of layoffs, do you think it is the innovating / implementing engineers who need to go, or is it the endless chain of money managing people who need to be booted out? These are questions which are not directly answered in the opinion piece linked above, but are ones which I am thinking out loud on. Inputs for discussion would be really great!

PS: I am no authority on economics, and haven't even done any basic course in it! My status is that of a layman, and my approach to the issue is the same. I guess people here have some sort of 'professional' / 'semi-professional' attitude to economics, and I would love to hear their voice on this issue.
deanhills
I wish I could meet this Friedman guy. His insights are absolutely on the number. Not only for commerce and industry, but ESPECIALLY for Government. In Canada for example so much of the funding for medical care and education goes to the top and middle managers. So that what is left ensures services and salaries that cannot stay in touch with rising prices and as a consequence have to be cut all the time. All those guys in Government too, who are there to think only, and do very little. So true, we need to get down to nuts and bolts basics.

I find that if I want to buy stocks these days, I need to sign up with a company because all the stocks are held in electronic custody, and of course pay for the custodianship. If I go to a bank to draw cash these days, it is almost as though the money belongs to the bank and not me. I have to go virtually through hoops and layers of stuff. All those financial advisors, the middle men. Friedman is right, and this is truly an insight that is completely valid. Also such a well-written Column.

I think I liked this part the best:

Quote:
That’s why we don’t just need a bailout. We need a reboot. We need a build out. We need a buildup. We need a national makeover. That is why the next few months are among the most important in U.S. history. Because of the financial crisis, Barack Obama has the bipartisan support to spend $1 trillion in stimulus. But we must make certain that every bailout dollar, which we’re borrowing from our kids’ future, is spent wisely.

It has to go into training teachers, educating scientists and engineers, paying for research and building the most productivity-enhancing infrastructure — without building white elephants. Generally, I’d like to see fewer government dollars shoveled out and more creative tax incentives to stimulate the private sector to catalyze new industries and new markets. If we allow this money to be spent on pork, it will be the end of us.



And then this final one:

Quote:
John Kennedy led us on a journey to discover the moon. Obama needs to lead us on a journey to rediscover, rebuild and reinvent our own backyard.
bogger
wow, scary.

http://en.wikipedia.org/wiki/Milton_Friedman

Possibly the god of modern economic thought, saw your say "friedman" deanhills, and I was like, wtf?

recent article, by a dead man? ey?

on topic
A reboot isn't reallly on the cards, realistically >.>. He's just ranting populist bullshit for collumn inches, although you have a point, deanhills
LumberJack
Wouldn't it be lovely if we could all trim down our bureaucratic fat, and have a leaner and meaner government. Friedman might have the numbers, but he definitely isn't the first one who has called for it. Government = Waste.
ptfrances
There is hundreds of reason why the global economic situation is so bad today.
deepviolet
I agree that Friedman's opinion is widely represented among the populace. He's telling us what any thinking human being should know.

But why should we base our sense of identity on nationality? Who cares about where you were born? If you think you're capable of more than a society plagued by corruption and bureaucracy, let's get together and start a new society.

Apparently, millions of people agree with Friedman. If this is the case, why don't they get together and do it better rather than do more talking?

The answer is probably that deep down Friedman and those who agree with him are part of the problem. They would never be able to create a society that is any better.
deanhills
bogger wrote:
wow, scary.

http://en.wikipedia.org/wiki/Milton_Friedman

Possibly the god of modern economic thought, saw your say "friedman" deanhills, and I was like, wtf?

recent article, by a dead man? ey?

on topic
A reboot isn't reallly on the cards, realistically >.>. He's just ranting populist bullshit for collumn inches, although you have a point, deanhills


The guy was Thomas Friendman, still alive and kicking and working at the New York Times as Foreign Affairs Columnist. Thought I would cut and paste his biography and photo for you. Pretty impressive writer ehhh ..... Definitely going to search for some of his works of art. Smile

Quote:
Thomas L. Friedman won the 2002 Pulitzer Prize for commentary, his third Pulitzer for The New York Times. He became the paper's foreign-affairs columnist in 1995. Previously, he served as chief economic correspondent in the Washington bureau and before that he was the chief White House correspondent. In 2005, Mr. Friedman was elected as a member of the Pulitzer Prize Board.

Mr. Friedman joined The Times in 1981 and was appointed Beirut bureau chief in 1982. In 1984 Mr. Friedman was transferred from Beirut to Jerusalem, where he served as Israel bureau chief until 1988. Mr. Friedman was awarded the 1983 Pulitzer Prize for international reporting (from Lebanon) and the 1988 Pulitzer Prize for international reporting (from Israel).



Mr. Friedman's latest book, "The World is Flat: A Brief History of the 21st Century," was released in April 2005 and won the inaugural Goldman Sachs/Financial Times Business Book of the Year award. In 2004, he was awarded the Overseas Press Club Award for lifetime achievement and the honorary title, Order of the British Empire (OBE), by Queen Elizabeth II.

His book, "From Beirut to Jerusalem" (1989), won the National Book Award for non-fiction in 1989 and "The Lexus and the Olive Tree" (2000) won the 2000 Overseas Press Club award for best nonfiction book on foreign policy and has been published in 27 languages. Mr. Friedman also wrote "Longitudes and Attitudes: The World in the Age of Terrorism" (2002) and the text accompanying Micha Bar-Am's book, "Israel: A Photobiography."

Born in Minneapolis on July 20, 1953, Mr. Friedman received a B.A. degree in Mediterranean studies from Brandeis University in 1975. In 1978 he received a Master of Philosophy degree in Modern Middle East studies from Oxford. Mr. Friedman is married and has two daughters.



Indebted to Ganesh for introducing this guy's writings to us. Thanks Ganesh!
Nick2008
Perfect, perfect. First time I found someone who isn't those CNN big mouths who keep telling us that the bailouts will continue, blablabla. We know that. He finally told the world the truth, America is not acting as smart as it should be, definitely in this crisis, there is nothing to be dumb about. This is reality, the more we wait, the deeper we fall. Action is needed now, and giving bailouts to corporations makes the government's debt increase. We need to pursure new ways of making profit, new engineering, less dependency on foreign oil so we should do offshore drilling and find new methods of finding oil deep down, and new inventions and ideas that can redesign the image of America.
jinnixue
I'm also a layman of economics, but I think your opinion is somtimes correct. too many middleman in the money link,maybe at first, many people became "paperly" rich, but for these guys did nothing on actual inovation, and when people who are in actual inovation get into this kind of business, the money became paper, which caused the money inflation, and enomic crisis happens.
LumberJack
All of these financial instruments and derivatives should either be outlawed, or highly regulated. The amount of leverage that the market took on is just too much, and now it is choking on it. There is going to be a lot more write downs and bailouts, until people say enough is enough, I am not paying for your stupidity. Will that cause a lot of short term pain, absolutely. But, will we be paying for it for generations? Nope, everyone takes the hit now and we move on. All of these bailouts are really dragging out the recession, and the inevitable with some companies.

Furthermore, the Federal Reserve (or insert Central Bank here), should be much more transparent. They cause a lot of this mess we are in, so either they make it more accountable to the public, or bring back some kind of gold standard set by parliaments/governments in which the Fed must operate within. Will that happen? Not very likely.
deanhills
LumberJack wrote:
Furthermore, the Federal Reserve (or insert Central Bank here), should be much more transparent. They cause a lot of this mess we are in, so either they make it more accountable to the public, or bring back some kind of gold standard set by parliaments/governments in which the Fed must operate within. Will that happen? Not very likely.


Exactly! And imagine just how transparent the Government is going to be about its ownership of the banks? I already cannot understand how the Government can become a banking owner? Will it be accountable to the shareholders of the bank? Can the shareholders have court cases against the Government? Already it is baffling the mind, completely complicated, onerous and guaranteed to create greater lack of transparency.
Cddhesh
i agree with Friedman's reason but there are many more reasons for current recession. Biggest question is where is Money ? where it went? who is acquiring that money currently. Most possible source could be middle men in business or it can be organization owners them selfs.
US banks should have taken measures while giving loans to these organizations. or is it that they have retrieved money and not declaring it. It is really a big question to be investigated upon.
deanhills
Cddhesh wrote:
i agree with Friedman's reason but there are many more reasons for current recession. Biggest question is where is Money ? where it went? who is acquiring that money currently. Most possible source could be middle men in business or it can be organization owners them selfs.
US banks should have taken measures while giving loans to these organizations. or is it that they have retrieved money and not declaring it. It is really a big question to be investigated upon.


Good question! Think most of the credit bubble was money that did not exist. People buying things they could not afford with credit cards, and using one credit card to pay off another. Then I also believe (stand to be corrected by the gurus) that there was a large outflow of money to China, India, and the developing countries who were exporting to the United States and other Developed Countries. China was flooding the world markets with its discounted products and services, and so was India. All that money went to China and India as well as other countries who were mass marketing abroad.
yuxuan
we consumer have no confidence now ,we believe the world economic will contiune to reducing ,so we are afraid to use money
LumberJack
When the markets start becoming ore liquid, things will start to turn around...
deanhills
LumberJack wrote:
When the markets start becoming more liquid, things will start to turn around...
Obama will first have to get support from Congress for that. Think once things start to lighten up in the US, it will work is way through to everyone else in the world.
LumberJack
It is up to us to make the markets more liquid. Not the government. Obama might be able to convince people and banks to part with their money a bit more, but only thing that will truly fix it is time.
joomla
the whole world economy is a big pyramid scheme and suddenly when some partners don't put in money anymore the bubble will burst. too many people have got loans which they can't effort.
the cause of all this is greed.
deanhills
LumberJack wrote:
It is up to us to make the markets more liquid. Not the government. Obama might be able to convince people and banks to part with their money a bit more, but only thing that will truly fix it is time.


OK. I'm all for that! So let's get rid of the banks first, as I think they are the reason for our dilemma. When we had Building Societies and transactions were transparent, all was OK, but the rot set in the moment when the banks gobbled up the people's banks. So let's start over, the banks got too big, and now not only have we got to bail them out, but we have to reinforce the big layers of stuff that had been the problem in the first place. Governments are trying to bail out the problem, they are not creating solutions!
LumberJack
Like it or not, Banks are a special type of institution that allows money to be more liquid. To blame the banks is not appropriate. Blame the banking executives and government for allowing banks to pile on the leverage to the point of insanity. You can also crucify the people who brought you those nasty derivatives, like ABCP or Alt-A Mortgages. Basically, people got greedy, and the beauty of capitalism allows us all to fail and lose our money. But now we all want our own bailout. We are just as guilty as anyone else...
ptfrances
I think it's the moment to change entirely our societies and the way we consume products.

I hope 2009 will be the beginning of big changes
Arrow
davidfromoz
I think the article is mostly populist crap. He managed to blame most of the usual scapegoats. Banks, Government and Car companies.

How did it come to this? I think you can look 2 ways. One is a mass failure of the individual to live responsibly. Or a failure of the government to create an environment where companies act responsibly.

When I was living in USA I watched my friends buy million dollar houses and pay nothing off the loan principle. I watched them get a new car every 3 years. And I saw financial institutions falling over themselves to pony up the cash for all these people living beyond their means. Everybody had massive credit card balances. It was quite normal and it was a disaster waiting to happen. You can't blame the banks or the government for people spending money they didn't have. Thats a failure of people.

Whoever was at the wheels when those companies lent all that money sure as hell weren't representing their shareholders. I would argue they were chasing the next bonus check. And how could all of this be completely beyond the bounds of regulation? The massive deregulation of the Greenspan era (and quite possibly before) is now viewed for what it was: a big mistake. (I think Greenspan's stock is the only thing that has plummeted more rapidly than my investment account). Its the governments job to create an environment where companies represent their shareholders.

I happen to be a fan of larger more expensive government that acts for the good of the people (or tries to). But whichever way you lean, I don't think these events can be used to justify smaller government. The government failed in its responsibility to regulate industry. And people failed to regulate their own behavior. I wonder if we will learn from it.

cheers,
david

PS> Not to muddy the waters of this discussion. We charged ahead despite the fact that many could see that it was crazy. It didn't matter that it was all a house of cards just so long as you could flip your house before the whole thing fell apart. I would argue that we are doing it again on a much larger scale with the environment.
fx-trading-education
I also think that blaming banks is not a solution, but banks should strickly remain in their role and not try to make too much extra money from diversification and speculation.
Banks should be under a very tight control. Maybe it is not in accordance with the liberal ideology but I think it is needed otherwise the whole system can fall appart anyday.

People spend money that they don't have because their bank let them do it. If they wouldn't be granted loans they wouldn't spend money that they don't have.
bigt
fx-trading-education wrote:
I also think that blaming banks is not a solution, but banks should strickly remain in their role and not try to make too much extra money from diversification and speculation.
Banks should be under a very tight control. Maybe it is not in accordance with the liberal ideology but I think it is needed otherwise the whole system can fall appart anyday.

People spend money that they don't have because their bank let them do it. If they wouldn't be granted loans they wouldn't spend money that they don't have.


Banks are not the problem. The U.S. government is not the problem. People are the problem and people will be the solution, not government.

The problem with American businesses and consumers (and now others in the world) is they spend more than they make. Yes, this is common sense, but so many financial problems can be linked back to credit. And there should be some changes to the financial industry, but the market should be trusted to handle itself without the government getting in the way. For example, it was the U.S. government that encouraged the lending to people that couldn't afford houses in the first place. I'm not saying people don't need housing, as everyone should have a place to live, but there are apartments and other alternatives for those not ready or able to have a mortgage.

You are in control of your life. Don't wait for the government bail you out.
deanhills
bigt wrote:
Banks are not the problem. The U.S. government is not the problem. People are the problem and people will be the solution, not government.

The problem with American businesses and consumers (and now others in the world) is they spend more than they make. Yes, this is common sense, but so many financial problems can be linked back to credit. And there should be some changes to the financial industry, but the market should be trusted to handle itself without the government getting in the way. For example, it was the U.S. government that encouraged the lending to people that couldn't afford houses in the first place. I'm not saying people don't need housing, as everyone should have a place to live, but there are apartments and other alternatives for those not ready or able to have a mortgage.

You are in control of your life. Don't wait for the government bail you out.


So Government is not spending more than what it has available to spend? Think we need to do a little reality check here? In the US I thought Government was of the people? Not something separate from the people. But perhaps we need to check up on Government spending. The URL below is for the Government. When you click around note how the terminology and everything in the Website are less than direct. You have to think about it and figure it out, it is not direct and transparent in "true-speak" language. Both Government and the Banks need to be dismantled of this layers of fancy terminology and systems and talk and layers of bureacracy. Like in Iceland, we have to go back to where the financial system was working OK and that was BEFORE the Banks were allowed (with the assistance of the Government) to get as BIG and BAD as they are right now:

http://www.treasurydirect.gov/NP/BPDLogin?application=np
Chinmoy
freelancing is always an option..
deanhills
Chinmoy wrote:
freelancing is always an option..
True. The positive part of times like these is that you may be forced to develop other areas of your skills that you would not have thought about when you were safely employed. Some people even become millionaires this way.
Crinoid
Quote:
Do you all think that these money managing middlemen need to be gotten rid of? In the area of layoffs, do you think it is the innovating / implementing engineers who need to go, or is it the endless chain of money managing people who need to be booted out?

If I may make a parallel:
Can you change employer, if you want to earn more or have better job or more job security, OR you have to leave this employer and try find the better one (if this is possible)?
This is a market economy,
Quote:
An economic system in which the means of production and distribution are privately or corporately owned and development is proportionate to the accumulation and reinvestment of profits gained in a free market.
(source).
Owner decides, who to get rid of. Not you, me or anyone else Wink

If this is production and product don't sell, owner have to reduce spendings, that do not make profit: close the plant, lay off workers. Not to spend more on innovative/implementing engineers and making high tech production line, producing the same product in the end. Any improvements, that do not pay for themselves at once, are postponed in the hardship periods.

If this is not production enterprise, then laying off clerks and middle management, reducing number of departments could be way to go.

If more profit could be made by money managing people, then by production, in order to survive business owner may take this route. Quite a complex issue. Business - just to continue to be business, not a hobby - must make a sizable profit.

Quote:
World Economy Status - Why is it so bad?

IMHO, for the same reason, that environmental changes go in the same direction.
mtsbuild
at the end of it all... relationships, interactivity, market dynamics.... the problems still boil down to the same issues.... and that is that we put value on an invisible entity.


this is a fundemental problem in the way the western world and the stock market works... and this is why the government shouldn't help anyone .........

if a business goes bust, it is their fault... if shareholders lose their money ... it is their fault....

- this is a gamble remember.... you are buying shares to speculate on success, that (obviously) would come to an end...

- the companies also invest to boost profits... therefore their profit portfolio is also based on thin air... this is just as appropriate in banks as it is in commodity companies or raw materials producers... i worked for engine manufacturers who invested billions in competitors, banks, governments, etc... and they did this to boost profits at the end of the fiscal year...


so when one cog goes belly up... its not just the banks that suffer, but the comapnies... and then shareholders and then confidence and then employees...

so the only way to fix it... is to let the companies go broke, that will do so......

the unemployed will be re-employed, simply because (well if ford goes...... who do you think will take up the demand for xxx million cars a year) - surely if one company goes... demand will still be there----- there will still be millions of buyers...... so who do they goto...... i would guess their nearest competitor.

demand will then be shared amongst the surivving companies....
however now.... because money is now reinvested, we own the banks/comapnies and whats worse is this didn't make a jott of difference (apart from the lower the value of the currency)....

i say, let the companies go...... make plans to support the re-distribution of workers to the competitor plants, who will see massive increases in demand as their is one less player in the market...... its that simple... surely.
hangnhu
I don't know if anyone heard of this theory, but do you think the mega rich all got together and agree to pull out of certain investments and let the stock plumet from there? did anyone predict this recession like a year before it happen?
surely there are always middleman and they can't be the cause of the crisis.
gandalfthegrey
Debt, debt, and more debt - both government and personal
Deficits, deficits and more deficits
An economic system that is built on debt and infinite growth, which makes it totally unsustainable and doomed to an eventual collapse. I figure in about 30-40 years, after a couple more rounds of massive government spending and bail-outs in an attempt to avert the impending disaster.
deanhills
gandalfthegrey wrote:
Debt, debt, and more debt - both government and personal
Deficits, deficits and more deficits
An economic system that is built on debt and infinite growth, which makes it totally unsustainable and doomed to an eventual collapse. I figure in about 30-40 years, after a couple more rounds of massive government spending and bail-outs in an attempt to avert the impending disaster.
It should have collapsed during the nineties and it did not, then again at the end of last year and it did not. Obama is now in trillions, no longer billions of debt.

If you say collapse, how do you see it happening?
ronbuice
It is my opinion that the current economic conditions stem from government iterference in the free maket. Government spending in all of the areas that it chooses to "help out" provides opportunity for the law of unintended consequenses. For example, the law the requires hospitals to treat any emergency room visit regardless of the person's ability to pay affects other hospital patient's bill. Hence you end up with an $8 pair of aspirin. The current conditions stem from amoung other things the housing downfall. Do you remember in the 90's when Democrats were wailing against "Red Lining"? Well in the terms that Jeramiah Wright America's chicken's have come home to roost. During the nineties, Demacrats were constantly introducing legislation (or threatening banks) that were precieved to be descriminating against minorities. The truth was the were following generally accepted lending proceedures using credit histories and ability to pay formulas. The end result was that an unbelievable amout of loans were given out and ultimately bought by Fannie May and Freddie Mac (ie. the federal government). The end result was that many banks made numerous bad loans were have ended up in default. As a result Housing prices have fallen by a third on average in most parts of the country. With housing so cheap and plentiful the construction market has slumped. Since the housing market has slumped the mortage market has too! Many bank began constricting their degree of loans overall as a result. Bank reposations also called REO, causes banks to be penalized by the Federal Reserve at about a $3 to $1 ratio. So if a certain bank repo's a house that is worth a $100,000 value, the fed decreases their to ability to borrow from the Fed by $300,000. Add to this the mark to market accounting practice by the Fed's when applied to real estate and it's a double whammy. Well those who caused the problem (read the Democrats like Barney Frank), are now completely in charge of everything now. So you might ask how does this effect the rest of the economy? When Banks lose there ability to get short term loans from the Fed, they have less money to lend to other areas of their clientel such as small businesses who need the money to pay payroll or to expand. This causes business to cut back on those items as they must resulting in things like layoffs, new pruchases, and new construction. As these things take effect and the news screams the warnings others in our society begin to tighten up on their spending. Less products being bought requires less production resulting in even greater slowdowns in the economy. Furthermore until the last couple of week our new president had been bemoaning the worst economy since the Great Depression. How does that affect the general population's physche? Lastly this years budget quadruples the national debt. As legislatures begin to look to cover the cost of all of the new spending (oh yeah there is the stimulas plan to add to the debt too) and you know that new taxes are on the way; removing even more money fron the economy. Lastly look at the stock market, with president Obama taking over banks, GM, and the healthcare system, who knows whe in the world to to invest their money so people are eiter sitting on their money or withdrawing it from the market!
Overall it looks like stormy days ahead for us and the U.S.!
standready
I remember a common quote from the past, "What is good for General Motors is good for the country." That should be the last time that is ever said.
Mr. Friedman is right about education and engineering being needed here. Instead we have the corruption of greed from twisting money out of money. Look at current gas prices which are being driven up by speculation not demand.
pgrmdave
I've got to agree with ron here - the problem stems from decades old legislation designed to get people who can't afford it into home ownership under the false idea that rather than have someone be rich, it is enough to make them feel rich.

When you push people into loans they can't afford, you hurt everybody involved, and everybody involved with them. People lose their homes. Banks lose revenue. Property values drop as homes are sold quicker, or foreclosed upon. Retail loses revenue as people are forced to move...
deanhills
standready wrote:
I remember a common quote from the past, "What is good for General Motors is good for the country."
One could probably also say that what is bad for General Motors is bad for the country. It seems to affect a large number of suppliers and businesses in addition to employees losing jobs, to affect the nation.

pgrmdave wrote:
When you push people into loans they can't afford, you hurt everybody involved, and everybody involved with them. People lose their homes. Banks lose revenue. Property values drop as homes are sold quicker, or foreclosed upon. Retail loses revenue as people are forced to move...
That is so true. What has happened to the usual expectation of young people saving first before they buy new homes? Sort of baffles the mind as they are encouraged to buy homes when they cannot really afford it by people who say "interest rates are low", and this is a good way to start life. Surely people need to be educated that they should not spend money that they do not have.
pgrmdave
It would be wonderful if people weren't encouraged to "own" but rather to build up value. Houses are, on average, losing bets. If you add up all the expenses of owning a house, and subtract the value you earn on it, you tend to end up with less than if you'd just rented something and invested the difference.

I'm 23, and just getting out of college next year. I've started investing what little I have into various funds and I plan on getting an apartment once I'm out of school. If I choose to buy a house, it will be for the freedom it can afford, not for any thoughts of "investment". If only our government understood that it was better to save than to buy...
deanhills
pgrmdave wrote:
It would be wonderful if people weren't encouraged to "own" but rather to build up value. Houses are, on average, losing bets. If you add up all the expenses of owning a house, and subtract the value you earn on it, you tend to end up with less than if you'd just rented something and invested the difference.

I'm 23, and just getting out of college next year. I've started investing what little I have into various funds and I plan on getting an apartment once I'm out of school. If I choose to buy a house, it will be for the freedom it can afford, not for any thoughts of "investment". If only our government understood that it was better to save than to buy...
I"m completely impressed that you are saving. Which is obviously the best thing to do. Governments are notoriously bad with saving, technically the US is bankrupt and now into trillions of spending. Governments are the last people to give advice about how people should be managing their money. The best advice in the end is your own.
chiragpatnaik
deepviolet wrote:

But why should we base our sense of identity on nationality? Who cares about where you were born? If you think you're capable of more than a society plagued by corruption and bureaucracy, let's get together and start a new society.


Good question.

deepviolet wrote:

The answer is probably that deep down Friedman and those who agree with him are part of the problem. They would never be able to create a society that is any better.


You answered your own question... Smile
chiragpatnaik
pgrmdave wrote:
It would be wonderful if people weren't encouraged to "own" but rather to build up value. Houses are, on average, losing bets. If you add up all the expenses of owning a house, and subtract the value you earn on it, you tend to end up with less than if you'd just rented something and invested the difference.

I'm 23, and just getting out of college next year. I've started investing what little I have into various funds and I plan on getting an apartment once I'm out of school. If I choose to buy a house, it will be for the freedom it can afford, not for any thoughts of "investment". If only our government understood that it was better to save than to buy...


ummm not entirely true. especially if you are buying in a growing sub-urb/city. I stay in a sub-urb of Delhi and prices have consistently risen over the past few decades to make it financially worth while to own a house. apart from the mental peace of mind about leases and moves.
gunjanmarwaha
Blaming banks will never justify the actual scenario. Who was, in the first place, to allow banks to operate so liberally? everything de-regularised? This was just a catalyst or a trigger for all the liquidity to be pulled out from a major economy, which in-turn is a big chunk of world economy. Its like ..... one fall, all fall
deanhills
gunjanmarwaha wrote:
Blaming banks will never justify the actual scenario. Who was, in the first place, to allow banks to operate so liberally? everything de-regularised? This was just a catalyst or a trigger for all the liquidity to be pulled out from a major economy, which in-turn is a big chunk of world economy. Its like ..... one fall, all fall
We probably need to blame ourselves then, for being greedy and essentially allowing corruption and not being stricter enough with ourselves.
lagoon
gunjanmarwaha wrote:
Blaming banks will never justify the actual scenario. Who was, in the first place, to allow banks to operate so liberally? everything de-regularised? This was just a catalyst or a trigger for all the liquidity to be pulled out from a major economy, which in-turn is a big chunk of world economy. Its like ..... one fall, all fall


What? You're saying it wasn't the banks fault? Are you serious?
ortie10
Exactly! And imagine just how transparent the Government is going to be about its ownership of the banks? I already cannot understand how the Government can become a banking owner? Will it be accountable to the shareholders of the bank? Can the shareholders have court cases against the Government? Already it is baffling the mind, completely complicated, onerous and guaranteed to create greater lack of transparency.[/quote]

Waite a minute! It's to my knowledge that it's the other way around, the government is in debt to many privately owned banks, some even overseas. In retrospect the banks own the U.S. government.

In 1832 during Andrew Jackson’s presidency, this was his greatest feat. He paid off the national debt and fought Nicholas Biddle and the Second Bank of the United States, a privately owned bank. Eventually the bank fell and government had more control over finances. It was to crush the abuse of the financial systems and restore order in a dictating banking system.

You know what they say history repeats itself!
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