Where will the DOW be a year from now?

I’m just hoping for spare change.

I believe you are right. An interview on Bloomberg with the head of a large U.S. white goods firm stated that sales figures were largely uninterrupted. As he said, people still have wages coming in and are still buying.
This tells me what you suspect Huang Guang Chen, which is that people are still going about their daily business unaware that by next year they may have no job and no income.[/quote]

My friends in the states (in their rocking 20s and 30s) are still talking about buying 52" TVs and whatnot, and they’re ridiculing me for recommending them to save money…

consumerist.com/consumer/clips/snl-ski t-dont-buy-stuff-you-cant-afford-252491.php?c page=3&sort=asc#viewcomment.[/quote]

Let them laugh at you all they want. I see it everyday, and the # 1 thing I keep hearing is the downfall of people is CREDIT CARDS. I’m watching some of my cohorts blow their student loans on Coach bags and other items and I’m thinking, do you realize that you’ll have paid more for that bag in interest in the coming years :loco: And they also fail to realize that because of the high foreclosures and bankruptcies that are occurring, banks are making it hard for one to borrow money because they are really looking at credit scores like never before. Employers are also taking credit scores very seriously. Credit scores in the US are going to make or break the next generation in so many ways.

[quote=“Namahottie”]

Let them laugh at you all they want. I see it everyday, and the # 1 thing I keep hearing is the downfall of people is CREDIT CARDS. I’m watching some of my cohorts blow their student loans on Coach bags and other items and I’m thinking, do you realize that you’ll have paid more for that bag in interest in the coming years :loco: And they also fail to realize that because of the high foreclosures and bankruptcies that are occurring, banks are making it hard for one to borrow money because they are really looking at credit scores like never before. Employers are also taking credit scores very seriously. Credit scores in the US are going to make or break the next generation in so many ways.[/quote]

I think that’s the jist of this whole mess. Americans have forgotten how to manage money. Credit is good in some instances (house, car, education). But to spend money you don’t have on things you really don’t need is a crime.

On some sick level, I think this meltdown might be a good thing (even though I’m hurting portfolio wise). Americans needed a slap in the face concerning money management. I see so many people doing, what I consider, stupid things with their money. Especially abusing student loans.

Back a few decades ago, I travelled the U.S. by hitching and grabbing a flop where I could. I learned some valuable life lessons in doing so. Later, taught these lessons to my kids. The first was, never get into a car with a drunk. Always try to find a part time job in a greasy spoon. The owner tends to understand folks on the road. Now, get to know the cook and scrub his pans until they gleam. You will never be hungry. Next, volunteer to stay late and sweep up, wash the windows, etc. This will no doubt get you the cot in the back room for no charge. Make a few tips, eat right, stay out of the rain and snow, and when your ready to move on, the locals will steer you to a good ride.
I only did it for 2 years before I went back to uni but it was a valuable life lesson. Now, I just got an email from my son who recalls those lessons and he tells me that he fears a coming crisis and is also teaching his kids the same stuff. Sure as hell hope they don’t have to use them but he feels it was good advice and - well, it worked for me.

Is it really possible…Bruce Banner in the flesh :slight_smile: . Sure you had some interesting experience then.

Oh Ya! Next happy hour, look me up and I will tell some stories that are funny, some sad and some about Greta.

The years not over yet, but I’m embarrased how high I voted.

[quote] Late-Day Drop Sends Dow Below 7,500 Threshold

Wall Street slipped lower on Thursday, and the Dow Jones industrial average dropped beneath 7,500, closing at its lowest levels in six years. . .

While stocks have been trading in a broad range over the last three months, analysts said that the indexes may be carving out a new, deeper trench, where the bottom of the old range becomes the top of the new one. Stocks could linger there for the next few months, analysts said, as investors wait to see whether the $787 billion stimulus package will have any effect.

“We’re going to see the same action we saw earlier, but maybe one step lower,” said Dan Cook, senior market analyst at IG Markets. “There’s just a lot of downward pressure on the market right now.”[/quote]
nytimes.com/2009/02/20/busin … ml?_r=1&hp

And here’s a cool tool to calculate how many years it will take to get back to where you were. :s
nytimes.com/interactive/2009 … aphic.html

Why do employers look at credit scores, and why are they allowed to?

Stock market values have always been overinflated. If they aren’t, the selling of stock won’t bring in as much revenue.

Try this: Take two balloons and put a piece of tape on one of them. Then get a sharp needle.

Poke the hole through the balloon without tape and see what happens.

Now, poke a hole through the tape covering the second balloon and see what happens.

The Great Depression was the first balloon, the current economy is the balloon, and Geroge Putz’s “stimulus” from last fall is the tape. Both balloons will end up deflated, it’s just a matter of time.

A second piece of tape might stop the leak in the second balloon…but only IF it’s applied carefully, and in the right place. If you don’t cover the leak, the balloon will still end up being deflated.

Why do employers look at credit scores, and why are they allowed to?[/quote]

Here is the article from USA Today: When ‘bad’ credit stands in the way of a good job

[quote]After a judge found that Rick Brooks had been wrongly fired from his airport-screener job in Milwaukee, the Transportation Security Administration agreed in 2005 to hire him back.

One catch: Brooks had to pass a background check.

Brooks sensed trouble because, he said, after losing his job at General Mitchell International Airport in 2003, financial problems led to missing child-support payments.

The TSA found that Brooks owed $7,700 in child support and would not hire him.

“It’s ridiculous,” said Brooks, 45, who has not worked since losing a temporary driving job with UPS on Jan 1. “In today’s economy, people are losing their jobs, so naturally they won’t have income. Should you be further punished by not getting a job?”[/quote]

Credit scores can give employers an idea of how you’ll act as an employee. It also is necessary for anything having to do with security clearances. Those clearance jobs aside, employers want to know how likely it is you’ll sell out to the competition or do illegal activities. It isn’t a causal effect, that having bad credit and high debt will ensure that you will sell secrets to a competitor, but it can be a correlation.

I don’t see why that’s such a shock. You give plenty of companies the right to look at your credit score if you want to get a loan, rent an apartment or get insurance. It’s only one of several methods to see how reliable you are as a person. References are also given to contact and see how you are outside of work. If you run up thousands of dollars worth of credit card debt, then it would be something your potential employer would worry about.

So there’s evidence that having a bad credit score translates into any of those things for an employer? Because everyone knows that people who are good at handling money would never screw anyone else.

It just seems like a very, very long bow to draw and another form of discrimination. Do they say, for instance, that being of a certain ethnic minority bears a greater correlation with being likely to commit crime? Of course not. There’s no way they could get away with that.

To look at it form a completely different angle, surely someone who has a really bad credit score is the best employee you can have because they really need the money. They will always be fearful for their job, so as an employer, you can try on all sorts of dodgy ways to exploit them. Someone who is in control of his money is in a much better position to tell his boss to take a running jump.

I couldn’t live under such nanny-state conditions.

[quote=“GuyInTaiwan”]So there’s evidence that having a bad credit score translates into any of those things for an employer? Because everyone knows that people who are good at handling money would never screw anyone else.

It just seems like a very, very long bow to draw and another form of discrimination. Do they say, for instance, that being of a certain ethnic minority bears a greater correlation with being likely to commit crime? Of course not. There’s no way they could get away with that.

To look at it form a completely different angle, surely someone who has a really bad credit score is the best employee you can have because they really need the money. They will always be fearful for their job, so as an employer, you can try on all sorts of dodgy ways to exploit them. Someone who is in control of his money is in a much better position to tell his boss to take a running jump.

I couldn’t live under such nanny-state conditions.[/quote]

How is it “nanny-state conditions” if it’s private business? Despite the USA Today article, the US government doesn’t employ the majority of the population. So, if private business does it, then is it still a nanny-state?

Plus, private businesses are allowed to discriminate more than the government is allowed to. Handsome men make more in salary than ugly men, as do taller men at the detriment of shorter men. Your genetics are out of your control, but your credit score isn’t. It’s one of the few things you can control, along with your grades. You may not be able to go to Harvard, but a degree with honors could do better than a C average from Harvard.

To use your example, if some of the people with really bad credit scores are discriminated against because of their past financial issues, then they’ll find a company that doesn’t check. The good candidates will improve the new company, at the detriment of the old company. The so-so and bad candidates will keep looking. The 1st company will continue to lose good talent who have bad credit scores to the 2nd company until they change their policy. As long as company 1 doesn’t change though, they’ll get all shades of candidates with good credit scores: good workers, room temperature and then the ones who watch break.com all day.

Company 1 ends up hiring workers who they wouldn’t before, because the good candidates with bad FICO scores went to other companies. Company 2 with less discriminatory hiring practices, gets good candidates that were overlooked and has their choice of who to hire. As you pointed out, they also have workers afraid about their ability to find another job, and so work harder.

I don’t think you can compare this to racial or sexual discrimination because you can’t control or change the previous two. You can choose not to run up your credit cards. It may be sad that people who are now facing 30k in credit card debt didn’t read the fine print about interest rates, but they made a choice. Their actions have future consequences that they didn’t think about beforehand.

It’s acceptable to discriminate on intelligence by only hiring the best and brightest workers and then paying them those wages comparable with their skills and education. As a society we reward those who work hard and study. Why isn’t it also acceptable to judge someone’s future reliability based of their past personal actions with their finances? Companies don’t require a certain FICO score, but they should take that into consideration along with your letters of reference.

Perhaps nanny-state wasn’t the correct term. Reagrdless, I think it’s ridiculous that government allows this kind of discrimination and not others. I’d like to see evidence that people with poor credit ratings actually are more likely to cause any of the problems in your first response than those with good credit ratings.

Can a company discriminate and not hire women of certain ages simply because they may have children (now or in the future), and therefore may take time off to look after them when they’re sick? Or how about someone who is religious and can’t work late on a Friday, Saturday or Sunday? There are a whole lot of ways in which a whole lot of things we do or don’t do outside of work could possibly affect work, yet actually demonstrating the links is pretty hard. How about people who aren’t in peak physical condition, drive unsafe motor vehicles or any other host of variables that could make them a risky choice as an employee?

Work is not completely isolated from the rest of our lives, indeed. However, to start hypothesising about what an employee might do in one area of his life based upon what he does in another area of his life is a little over the top, I think. Again, I ask you to show the link between poor judgement in one area of a person’s life and how he will perform on the job. Plenty of people hold down (and succeed in) good jobs despite making a complete shambles of their private lives from bad credit to drinking too much to having failed marriages. I think the underlying message though is that wealth is equated with moral goodness and vice versa.

If you really want a free-market approach to this, then go the whole hog and say anyone should be able to be discriminated against on any reason and the market will sort it out. Otherwise, where do you draw the line?

“What you mean ‘we’, white man?”

8352.67, plus or minus a RCH.[/quote]
I would like to admit now that I was wrong. I’m betting we will see a major slide over the next two months to 6000, if not lower. Depending on the cascading effects from that, over the next few years we could see a 2000 Dow again.

I’m still not convinced we’ll see any real deflation, considering that the government is trying to spendwaste trillions of dollars as fast as it can to trigger inflation, but I don’t think many people will have much money left to buy anything by the end of this.

I talked with an acquaintance last night who pointed out that when gold broke $1000 a year or so ago, the USD was very weak on international currency markets; the GBP was at 2:1, and the EUR was at about 1.5:1. Now, they’re about 1.44 and 1.28 respectively and yet gold is back over $1000 again. A few people are calling this a sign of currency flight from the USD, as well as noting that recent Treasury auctions have been poorly subscribed and that the dollar is again falling against other currencies (GBP was at 1.32 a few weeks ago, and EUR has bounced slightly off 1.25).