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Economic Pearl Harbour / changed your habits?


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I was just reading the below about the current economic mess we're in.

 

The bit about "people have really changed their habits like I haven't seen". Personally I haven't made any changes to my lifestyle at all, though it has never been of the constantly acquiring/buying kind like some people. I wonder if that will change and when and how in my case.

 

Have you made any adjustments?

 

Quote:
Warren Buffett, the influential American investor, has likened his country's escalating fiscal woes to "an economic Pearl Harbor".

 

The multi-billionaire, who is an informal advisor to President Barack Obama, conceded the economy had approached "close to the worse case" possible.

 

He also warned that recovery would not come quickly.

 

Acknowledging his own failure to foresee the scale of the crisis, he admitted: "It's fallen off a cliff. Not only has the economy slowed down but people have really changed their habits like I haven't seen."

 

Mr Buffett, recently ranked the second-richest American by Forbes magazine, said that fear was the greatest cause of damage to the economy, claiming it is now dominating the public's behaviour to an alarming degree.

 

"People are confused and scared," he said.

 

"People can't be worried about banks, and a lot of them are."

 

Mr Buffett singled out Americans' failure to predict the severity of home price declines, which he said in turn led to problems with securitizations and other debts tied to the stability of house prices.

 

He said: "It was like some kids saying the emperor has no clothes, and then after he says that, he says now that the emperor doesn't have any underwear either.

 

"We want to err on the side next time of not allowing big institutions to get as unchecked on leverage as we have allowed them to do."

 

Mr Buffett also urged consumers to curb their dependence on credit cards.

 

"I can't make money borrowing money at 18 or 20 per cent. I'd go broke."

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The people I know who are suddenly out of work are fairly well off and comfortable and they are saying that they're not going to bother looking for a job now. Apart from the fact that it would prove pretty difficult, they are both going to take a rest and have a holiday for at least a few months.

 

I haven't changed the way I do things really though I am starting to think about where all my money is and what to do with it. All a bit worrying.

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Economic Pearl Harbour? doh

 

What is with this recession (there I said it) that people can not use the word!! Our PM has steadfastly avoided the use of the r... word despite being pushed on it. It is quite comical.

 

We are in an Economic Storm, a Global Financial Hurricane, a tidal wave of financial duress...

 

Good god! How many more euphamisms for RECESSION do you need?

lol

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Australia's mini bubble hasn't burst yet and Oz is not independent from world economics. Especially dependent on exports to countries like Japan somewhat excessively. The media is trying to hype up the housing market by saying it 's time to buy now, but actually whoever buy's is entering a contract and if you lose your Job, you are stuffed. Australia has been stuffed by politicians and Labour unions, but when shit hits the fan, it's gonna be like anywhere else. They can't help you. People lose jobs, they lose houses. I always thought the housing market will collapse but the 2000 Olympics delayed that and rather made fortune to some and created more gap between the rich and the poor. Again the recession is going to increase that. When thing are tough, people resort to buying cheap stuff rather than giving it up. No good. DON"T BUY CHINESE. BUY LOCAL. make them rich, and they already are, they will buy up every necessities in one's own land. When you sell energy and food industry to other nations, You are selling political and economical leverage. Not only that, since Australia has sold Arnott's and Edgells to U.S, Tim-Tams and Gingernut doesn't taste good any more. boo

Rip up the useless lawn that is just for show backyard and put a vegie garden in it. Stuff Bourke's backyard ! It's about time people should be thinking about real economy than pimping up your own house and improving property values. When a country is dependent on the housing market (ie: USA) guess what happens... Prepare for the recession by lowering rental prices and that's what we should press the politicians to do.

 

 

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I'm in an incredibly stable job environment, in fact looking for expansion/promotion and a bigger bonus than last year (fingers crossed).

 

The only changes I've been looking at making are considering how my superannuation is invested

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The Australian super is another "shame, shame on you politicians" joke. You plan for a life time and retirement, so you expect the contract you made with the government is honoured. Well. well, what happens? They change it 5 years down the road. They must be feeding off the accounting industry in donations or what?

 

ger, what is a protectionist? I just want to point out that there is a bigger picture and risk as a consequence of all this recession. China. We have been maintaining our material and american model middle class lifestyle on cheaps labour throw away quality chinese goods.

Results could be a threat to our lifestyle and freedom which is already at stake since the government have used anti-terrorism as means to invade our privacy. "We are making it safe and better for you." Doesn't that sound like what the Chinese say about Tibet?

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Some of my investments that I look on as pension have taken a hit. Don't need to touch them though so trying not to look and hoping that one day in the not too distant future they recover and get back on (some kind of) track.

 

Sending money to the UK when I can because of the exchange rates, though the interest rates in the UK have shrivelled to almost nothing.

 

Other than that no changes.

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Originally Posted By: Jynxx
The Australian super is another "shame, shame on you politicians" joke. You plan for a life time and retirement, so you expect the contract you made with the government is honoured. Well. well, what happens? They change it 5 years down the road. They must be feeding off the accounting industry in donations or what?



Mate I work in the super industry, and can't work out the joke.
The only changes they have made recently have been better one's so I'd be pretty interested to see what the scam is.
It's market linked so it would be outrageous for the govt to guarantee it all unless it was invested in cash.. That' what we are seeing now, mass capitulation to cash. Sad to see so many pensioners taking a hit.. The govt is taking action to help these people by reducing minimum annual pension which will preserve pensioners balances for better days (when ....they return).

For people like me with 20-30 years left, I'm taking an aggressive approach.

Also if you think Aussie super is a joke, check out the Japanese scheme.. Australian are lucky to get what we do!
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Jynxx seems to be harbouring a bit of resentment there I think...

 

My mother has always said that the Government wont be able to keep thier hands off that big pot of money called superannuation forever - but I have always brushed that off as paranoia...there are regulations in place. Market forces are another thing altogether - and I feel for retiree's.

 

As for changes - not so many here yet. We had planned to tighten the belt this year, but so far it has not happened.

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Let's take a capitalist approach...

If you are running your own business, why weren't you allowed to invest in real estate for your own super?

This could have resulted in increasing the available housing and reduced the available rent..

what regulations? the one's they can change any time. Ma'bear your mum's suspicion is well founded... Indo, I don't know what I am talking about. I think the big benefit for super is to create an industry that means jobs... kill two birds with one stone as the Japanese say.

I hope it doesn't literary end up that way touch wood.

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Jynxxie,

A normal person can't own a property in super so why should a self employed be able to? With the introduction of SMSF's now allow investments in property. So that is an option for a self employed person to take.

 

As for the govermnemt getting their hands on the super pot of gold.. Impossible. They would have to buy out every trustee to do so.

Japan on the other hand, the govt controls the investments and when you pay into the pension it goes into a pool rather than an individual's account.. Now thats bloody scary!

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Originally Posted By: Indo
Jynxxie,
A normal person can't own a property in super so why should a self employed be able to? With the introduction of SMSF's now allow investments in property. So that is an option for a self employed person to take.

As for the govermnemt getting their hands on the super pot of gold.. Impossible. They would have to buy out every trustee to do so.
Japan on the other hand, the govt controls the investments and when you pay into the pension it goes into a pool rather than an individual's account.. Now thats bloody scary!



....and didn't the J government lose a whole bunch of people's pension records because of a fire or something?
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Because if you a self employed, you are running a company. As I said, here is no such thing as Free trade. It's all about governments and big companies. Why can't I directly make a choice in what to invest for my retirement. It's about self efficiency, too. What kind of efforts are the government taking to encourage savings (ie: not taxing the first 50 transactions in stock exchange. Not taking the first AUD50000 in savings accounts. abolish taxes on deposits, withdrawals. not taxing people on poverty earnings under AUD15000 pa) These so called investment advisers. They are playing with someone else's money. Japanese call it Wrestling with someone else's pants on .(in Sumo terms). There should be an option to use your Super industry or not. (by the way, that realestate option did not exist before..here we go, no plans, ad hock) I can make my decisions thank you very much.

This protectionist jargon.... IF it is really Free trade, It is my freedom to say NO to some things. I don't have to sell it to the lowest bidder, I can make alliances, I don't have to deal with some cultures or regions because it is a risk or I don't like it. It is the peoples free will to protect their industry at the taxs payers expense.

Look at all he governments bailing out companies on the tax payers expense. Basically, one generation messing up big time and passing it down for the next generation. We will still take our big bonus checks, sorry your pension got hit.....

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Thank you Gimp.

 

ignorance is bliss isn't it. Some people are just happy to look good, have some money so they can consume, fast cars, pretty chicks, yummy food, live for about 60 years and that's all it's about. Love to perv on people and get perved in return.

Live in a Panopticon... we are just monitoring it to make sure it's all right... It's called regulation...

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Originally Posted By: Jynxx
Because if you a self employed, you are running a company.
Ahh not always. My husband is self employed - he is running a company; but I am self employed and I am not...it is just little old me.
Originally Posted By: Jynxx
Why can't I directly make a choice in what to invest for my retirement.
To an extent you can here..but most people choose to go with the superfund thier employer uses as a default because they do not know enough about it to make choices. We have a private super fund, and choose EXACTLY what to invest our money in. Property was considered and dismissed for us at this stage.
Originally Posted By: Jynxx
...not taxing people on poverty earnings under AUD15000 pa)
There is a tax free threshold and without referring back to the current tax website 15000 would be about it.. then there is a sliding scale of taxation. Some might argue (and I am one of them) that taxing high income earners at 48c in the dollar is counterproductive to industry and results in people deliberately earning less to stay under certain thresholds - now THAT is not good for the economy!
Originally Posted By: Jynxx
These so called investment advisers. They are playing with someone else's money.....
But before compulsory superannuation those that saved to fund thier retirement were in the minority... People expected that they paid tax all thier life so they were entitled to a pension. That worked while the population was growing - but now that it is top heavy with retiree's it is an unworkable situation. The taxes we pay are used that same year - a small part on supporting those that can not support themselves, the rest on roads, police, schools, infrastructure, hospitals... without some kind of legislated and controlled super things would be looking more than just grim!!
Originally Posted By: Jynxx
Look at all he governments bailing out companies on the tax payers expense. Basically, one generation messing up big time and passing it down for the next generation. We will still take our big bonus checks, sorry your pension got hit.....
hmmmm...see I think you are mixing two issues here. Compulsory superannuation and government checks and balances to minimize rorts in the industry is a good and positive thing. The world financial crisis, and stockmarket crash and burn having a knock on effect has had a huge and very negative effect on the portfolios and even the viability of peoples superannuation - but that is market forces. the government can not be held to ransom for market forces - if so we would all be being urged by government to stuff our money under our mattresses!!
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Geeze, mama,

You actually made sense of that huge unbroken slab of text from Jynxx. I am sooo impressed!

 

(Note to Jynxx, please try to use paragraphs, it makes the text that much easier to read and involves the use of just ONE single key - the Enter key- and makes the text just sooo much easier to read!)

 

and FWIW, Mama has summarised the Oz experience quite well! One thing, most employers have a "preferred" super supplier. It is a hassle to change, and most people are not prepared to make the effort.

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Originally Posted By: Jynxx
Because if you a self employed, you are running a company. As I said, here is no such thing as Free trade. It's all about governments and big companies. Why can't I directly make a choice in what to invest for my retirement.


If you are Self employed depending on structure of your Co you may not have to pay into super therefore having the choice that you so desire to invest in whatever you want.!


Quote:
It's about self efficiency, too. What kind of efforts are the government taking to encourage savings (ie: not taxing the first 50 transactions in stock exchange. Not taking the first AUD50000 in savings accounts. abolish taxes on deposits, withdrawals. not taxing people on poverty earnings under AUD15000 pa)


err, if you are taking saving for retirement, look at concessional tax rates for concessional contributions to super. If you had a look and did your sums you would see that whilst the tax free threshold is currently at $6000 with the low income tax offset it actually equates to around $14k that you can really earn before having to pay tax.


Quote:
These so called investment advisers. They are playing with someone else's money. Japanese call it Wrestling with someone else's pants on .(in Sumo terms).


fond of those saying's aren't we?

Quote:
There should be an option to use your Super industry or not. (by the way, that realestate option did not exist before..here we go, no plans, ad hock) I can make my decisions thank you very much.


For most people the 9% super guarantee is a forced way to save. You can actually dictate how it is invested and in my super I can trade in the ASX stocks. Without super you will find many people will never be well funded for retirement thus needing to rely even more on he govt!


Quote:
Look at all he governments bailing out companies on the tax payers expense. Basically, one generation messing up big time and passing it down for the next generation. We will still take our big bonus checks, sorry your pension got hit.....


Well lets see what happens if the US gov lets GM go to shit..
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