We're All Job Doomers Now
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The Almighty
I am closing in on 37 toppy. I lived and worked through the brief recession in the early 90's and the recession of 2000-2003. Now for your daily economics lesson, since they clearly did not make that a part of your MBA guru master curriculum....
The economic hardships people go through are NOT defined solely on unemployment numbers.
There are a LOT of people out there who are seeing their equity investments decline, their home values decline, the dollar not buying as much as it used to, food and energy costs soaring..... and the negative effects are NOT based on whether or not they have jobs. Being unemployed certainly makes the effects worse. No question. But simply having a job does not protect someone from a bad economy.
Side note... before you go off on how oil is up... or how the GDP numbers are slightly positive. Yes, I am aware of these things. But a very slow to stagnant growth rate coupled with high inflation is NOT good toppy.
We did not have high inflationary pressures in 91. Nor did we have it in 2000-2003. It is the inflationary pressures that make this worse toppy.
*insert pre-emptive cold caller type insult to save toppy the time of mispelling it*
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The Almighty
I did not say it was solely from ethanol. But when you use 15% of your food crops for fuel, that increases demand by 15% that otherwise would not be there. When there is a shortage of grain, that hurts.
Topspin
Verified User
gerberfreak, please save your remedial econ for someone who needs it and your captain obvious comments as well. You skirt the much more massive job loss issue again which is standard for you. Also don't talk about the one where thousands of banks failed or the 87 crash. LOFL
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The Almighty
1) Thanks for your obligatory moronic comments, they were expected.
2) 87 was NOTHING compared to today. The equity market crashed hard, yes, but where was it a short three months later toppy?
3) The S&L problems were bad, yes. But again, look at where we are today. It is just as bad if not worse. I was pointing out the obvious two that were NOT worse than the current situation.
4) On the jobs.... I did address it, you are simply too ignorant to comprehend what was said. As I stated, unemployment is NOT the sole factor in determining how bad the economy is. It is one factor. If inflation on common goods (especially food and energy) is rising faster than income, then it hurts the average worker as they are obviously losing purchasing power.
If growth is minimal and inflation is soaring, the economy hurts far more than negative growth with low inflation (as we saw in 2000-2003).
5) As for ignoring data... I noticed you quite clearly are ignoring the remainder of my post to you. Just as you did in November. High grain, high energy, housing concerns, credit card debt rising, equity market in a trading range.... etc... Why are you ignoring all these factors and focusing strictly on jobs toppy? Because each of these effects EVERYONE.... whether they have a job or not.
uscitizen
Villified User
You conceal your awe in my presence if you so desire.
Topspin
Verified User
supertool, I find it comical that you are stressing how bad things are and were still growing. LOFL
I'll join the circus of crybabies when we have 6 months of negative GDP, and you'll see exponentially more job loss. I'm sorry at 48 sensationalism is lost on me. Even a mild recession is way worse than this and a natural periodic happening. To many tools getting caught up in the politisizing of everything.
I'll join the circus of crybabies when we have 6 months of negative GDP, and you'll see exponentially more job loss. I'm sorry at 48 sensationalism is lost on me. Even a mild recession is way worse than this and a natural periodic happening. To many tools getting caught up in the politisizing of everything.
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The Almighty
My god you are quite the economic retard. Again you respond with your normal idiocy rather than attempt to address the points I made. Minimal growth coupled with high inflation is bad toppy. Ask any economics professor you can find. Assuming of course any will converse with such a retard as yourself.
Ok good, and get me a no-foam Cappuccino while you're up, dummy.
Good Luck
New member
1) Few mortgages are variable rate, so fo course they are not going to change with the prime rate. That is why refinancing became so popular among those who purchased when the prime rate was significantly higher - because fixed rates do not rise or fall with the prime.
2) A 2 point increase in interest rates will have a lot more impact on people who are already barely staying afloat than you estimate. 2 points is a 10% increase on 20% debt, but a 25% increase on 8% debt, which is what many middle income people - who kept their credit ratings reasonably clean - are paying. Due to other conditions, many are already tipping over, let alone those who are on the edge.
3) A stronger dollar may bring oil prices down fairly quickly, but it will take time for a prime rate increase to affect the strength of the dollar significantly. Also, there are other factors depressing the value of the dollar on international markets. That is where the time delay comes in for the stronger dollar affecting things in a positive manner, while interest on variable rate debts will go up immediately.
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The Almighty
You clearly need an education in currency trading. The dollar will strengthen the DAY the Fed mentions an increased likelihood of a rate increase. Just look what the Euro did against the dollar the DAY they said they were more inclined to raise rates to fight inflation rather than lower them to fight a possible recession. As for it working through the system, yes, that will take varying lengths of time based on the underlying item. Oil prices will react quickly and you can be sure there will be corresponding pressure on gas prices to see subsequent drops.
Other commodity prices will also drop with the strengthening dollar.... nat gas, coal, grain etc...
Good Luck
New member
There is a difference between a stepped rate load and a variable rate loan. The problem with the housing industry is with stepped rate loans - that is why they went up even though prime has not. It was written into the contract to keep initial payments low, but with the knowledge thaat payments would increase later. It was the PAYMENTS that ballooned, not the interest rates on the mortgage.
Variable rate loans are tied to the prime rate. You look at almost every credit card contract and in the really teeny tiny print you'll find that the rates are prime plus X for the base rate and prime plus Y for the "default" rate. Prime increases, so do both the base rate and the default rate.
Also, people with lower rates do not necessarily have lower personal debt. In fact quite the opposite is likely. People with high risk rates are also usually tied to lower maximums. Even though their total debt is lower, they are closer to their maximums, causing their credit rating to drop, and their interest rates to increase. People with high limits can have a significantly larger total debt, yet still have a lower percentage of available credit, thus having a better credit rating which keeps their rates lower.
For instance, a person with a spotty credit history three credit cards, but they are limited to 2500 each. They have a total of $6000 distributed between the three cards. That means all three cards are close to their limit. By being close to their maximum, their already spotty credit rating is kept lower, and their interest rate will be higher.
Another person has a clean credit history. They have 4 credit cards with a maximum of $10000 each. They have $18,000 approximately equally divided between the cards. Even though they owe 3 times what the first person owes, they have a better credit rating that is not negatively affected by the debt because it is below 50% of their available credit. The better credit rating keeps their interest rates lower.
Now both people have, through bad planning, gotten themselves in debt enough they are very seriously struggling. But both are also managing to barely) hang on the couple years in their fight to climb out of the hole. Now they are both facing a marked increase in their transportation costs, and food costs, and power bills, etc. Now they are not balancing on the edge, they are starting to slide down the other side.
Even if an increase were to strengthen the dollar immediately, you KNOW the price at the pumps will not decrease in response to cheaper market oil anywhere close to how fast pump prices react to oil price increases. Nor will other inflationary pressures be relieved except after a three to six month lag. Most prices, including that of gasoline, are unlikely to go back to their pre-crisis levels.
But you can bet the credit card companies will be sending out notices of rate increase due to the prime rate going up within a day of a prime rate increase. The rate increase will add to the costs of inflation, and the delay before the rate increase will do anything about the inflation, could well send people like in the examples over the edge, disrupting their ability to maintain payments on their debt so they end up with even worse interest rates, thus making it even harder to climb back out of debt.
Inflation alone is bad enough. But add interest rate increases could end up spiraling people on the edge down into irrecoverable debt.
Oh, and shall we mention the effect the prime rate will have on the daily cost of the national debt?
Variable rate loans are tied to the prime rate. You look at almost every credit card contract and in the really teeny tiny print you'll find that the rates are prime plus X for the base rate and prime plus Y for the "default" rate. Prime increases, so do both the base rate and the default rate.
Also, people with lower rates do not necessarily have lower personal debt. In fact quite the opposite is likely. People with high risk rates are also usually tied to lower maximums. Even though their total debt is lower, they are closer to their maximums, causing their credit rating to drop, and their interest rates to increase. People with high limits can have a significantly larger total debt, yet still have a lower percentage of available credit, thus having a better credit rating which keeps their rates lower.
For instance, a person with a spotty credit history three credit cards, but they are limited to 2500 each. They have a total of $6000 distributed between the three cards. That means all three cards are close to their limit. By being close to their maximum, their already spotty credit rating is kept lower, and their interest rate will be higher.
Another person has a clean credit history. They have 4 credit cards with a maximum of $10000 each. They have $18,000 approximately equally divided between the cards. Even though they owe 3 times what the first person owes, they have a better credit rating that is not negatively affected by the debt because it is below 50% of their available credit. The better credit rating keeps their interest rates lower.
Now both people have, through bad planning, gotten themselves in debt enough they are very seriously struggling. But both are also managing to barely) hang on the couple years in their fight to climb out of the hole. Now they are both facing a marked increase in their transportation costs, and food costs, and power bills, etc. Now they are not balancing on the edge, they are starting to slide down the other side.
Even if an increase were to strengthen the dollar immediately, you KNOW the price at the pumps will not decrease in response to cheaper market oil anywhere close to how fast pump prices react to oil price increases. Nor will other inflationary pressures be relieved except after a three to six month lag. Most prices, including that of gasoline, are unlikely to go back to their pre-crisis levels.
But you can bet the credit card companies will be sending out notices of rate increase due to the prime rate going up within a day of a prime rate increase. The rate increase will add to the costs of inflation, and the delay before the rate increase will do anything about the inflation, could well send people like in the examples over the edge, disrupting their ability to maintain payments on their debt so they end up with even worse interest rates, thus making it even harder to climb back out of debt.
Inflation alone is bad enough. But add interest rate increases could end up spiraling people on the edge down into irrecoverable debt.
Oh, and shall we mention the effect the prime rate will have on the daily cost of the national debt?
Kamala Trump
Verified User
WOw. Great exchange here. Funny how neocon internationalist dollar debaser freemasons like good luck will twist the principles of market they usually value in order to destroy the dollar and institute the satanically premarked currency of the New World Order.
uscitizen
Villified User
Do you have to study long to be able to state things in such a manner?
I like " Neocons have their heads up their butts" better.