Where does it stop

[Maicojames]

Personally, I have been feeling the pinch since 2005, and only 2003-2005 were good years for me anyway. Never been an investor-other than a few 401ks, and a few CDs-all which had been cashed out with penalties. I hate to say it, but perhaps some of the Rich Bitches driving their Lexus, and Escalde SUVs will have to go back to work-and even consort with us peasants.
  It will be a shit to sort out, but will be sorted out. We in the US eventually vote out those of avorice, and the stupid forks...eventually.

As far as the philosophy, capitalism is awesome with reasonable regulation-when we lose that- we lose. I agree we can all lead simpler lives. I think that is a component of our interest in VMX-taking us back to more simple times.  I have complete faith that the USA will recover stronger than ever before. I am, though concerned about the time it will take and it's global impact.
I am registered to vote-and will on November 4-you can bet your ass I will.

[Nitram]

Yeah, we should be voting with our feet, and I hope enough US voters can see the light and give Obama the chance to turn his rhetoric into reality.

But I really sympathise with Walter and anybody else who is trying to keep a small-ish business afloat while reliant on imported goods.  The ability to put food on the table just got 20 or 30% harder.  And the bad taste in the mouth is that much worse with the knowledge that, as Lozza points out, the "heads of industry" -those hi-flying executives who get some press from time to time with their million dollar salaries and even bigger bonuses- are now scuttling into their bunkers with great wads of cash, waiting for the right opportunity to take Shoey's advice and buy buy buy at the expense of struggling small businesses like Walter's.

But surely the message should be getting through to backwater nations like Australia and NZ that we should be bending over backwards to cultivate and nurture LOCAL industry and talent.  We should be giving incentives to LOCAL entrepreneurs who can maufacture LOCALLY e.g. emulators, replica plastic guards, pistons etc etc, providing employment for our kids and insulation against the vagaries of the world economy, controlled as it is by self-interested capitalists.  As voters we should get behind would-be poilitcians who will actually promote education and local small business and industry, instead of just assuming that we can survive indefinately by digging up minerals and shipping them overseas to swap for cars and computers etc.

Hang in there Walter. 

That's what I reckon anyway.

Nitram

[paul]

i bought some side cover for the maico franken bike last week got the invoice today
 
94.00 USD = 141.010 AUD

[geraldo]

I'm with Nitram, NZ and Australian workers have watched for years as their jobs have been shipped off shore to cheaper labour centres.
Its such a short sighted view , we should be encouraging local manufacturing and innovation ,personally I would pay extra for products made here in NZ or even from Auz . Whenever I have to do the grocery shopping I always look for NZ made products , quite easy to do but go to a hardware or appliance store and see if you can find anything not made in Asia

[paul]

tell her to blame me
i get the blame for every thing

[mx250]

As far as the philosophy, capitalism is awesome with reasonable regulation-when we lose that- we lose.

Greed is the philosophy; Capitism is the mechanism. It has served us well in the last 200 years it will not necessarily serve us well in the future.  

I have complete faith that the USA will recover stronger than ever before. 

Yes the fundalmental are there, America will recover. But not as strong as before. America is in decline both in absolute terms and comparitively with other nations.

America's decline in absolute terms is of it own making. Over the last 20 years, and accelerated in the last 8, America has progressively lost its standing and leadership in one sphere of human activity after another - industry, technology, political, moral, education, health, research and development. It has now lost it standing in the financial world. Never again will Norweigan Villigers put their superannuation into the trust of the American Banking system.

Yes America by its sheer size and inate wealth of resources, including its population, is still strong in each of these spheres but it has lost and is lossing its leadership and all the advantages that go with it. America will never become a third world country but it will never be as dominent or as secure in the future as it has been in the last 50 years.

America lost of world leadership and status stems directly from the poor quality of its political leadership. The poor quality of its political leadership can be traced the corrupt and corrupting election process. After 12 months of campaigning and preselection America doesn't end up with the best statesman or policy maker or the best leader, but ends up with the best fund raiser. The funds are necessary for the wages of the Campaign Director and the best Spin Doctors money can buy. Millions of dollars of funds are also required for advertising, not to inform but to persuade voters. Without the Campaign Director and the best Spin Doctors and the advertising you don't win.

After 12 months of campaigning and preselection the candidates will owe more to the fund contributors than they owe to the American voters. When 'push comes to shove' they will act more to the advantage of the fund contributors than the American voters.

The candidates will know that voter loyality can be bought and swayed but if they can 'give value' to their fund contributors they can count on their fund support for the next re-elections.

This has been the history of the last 20 years with Affordable Home Loans, Freddie Mac and Fanny Mae, with bank regualtion and de-regulation, and has been a direct cause, although not sole cause, of the current crisis.

The election process  has again thrown up two low quality candidates and I would not expect any great difference in the quality of political leadership in the immediate future. I hope I'm wrong but given the history and the same process I'm probably right.

America is like having a brother who is gay. You love your brother, you understand your brother, you respect your brother, but shit you still wish he wasn't gay.

[mx250]

I'm with Nitram, NZ and Australian workers have watched for years as their jobs have been shipped off shore to cheaper labour centres.
Its such a short sighted view , we should be encouraging local manufacturing and innovation ,personally I would pay extra for products made here in NZ or even from Auz . Whenever I have to do the grocery shopping I always look for NZ made products , quite easy to do but go to a hardware or appliance store and see if you can find anything not made in Asia

Just a moment. I'll go and find John Howard and have him explain the advanatages of Free Trade again .

[vmx42]

Hey Guys,
Yes, there are many people to blame for this mess. Blame the spineless Regulators. Blame the opportunistic Banks. Blame the complicent Media. But unfortunately the one person that isn't attracting any blame is the often lauded, but never criticised, 'Working Class Australian' or 'American Joe Six-Pack [whatever the f#@k that means]' and their like-kinds in every developed nation around the world.

THIS MESS IS OUR FAULT!!   IT IS DOWN TO PERSONAL GREED, PURE AND SIMPLE.

Now don't go blaming me for saying it, but take a look in the mirror and tell me it isn't true.

Sure the regulators changed the rules to allow the banks to profit, encourage and fuel our greed. Sure the media kept stoking the fire with endless stories of the wonderful lives of others achieved through mindless, excessive, beautiful consumerism. And, sure the government basked in the amazing growth that they claimed was down to their superior fiscal management and foresight. But is it US, the best educated people in the history of the planet that signed on, again and again, in mindless droves. We are the ones who ignored common sense and sold our sole to the devil to join the Real Estate boom, to fill our new McMansions with STUFF, to keep up with others who were already gorging on the excess. If they can do it, so can I.

So hypocritical are we that while on one hand we urge our politicians to save the planet, on the other hand we as individuals strive to consume more than ever whilst using borrowed money to pay for it. Yeah, that was a long-term plan that was bound to succeed.

Keating [no I am not a fan, but at least he wasn't a spineless, popularist who only told us what we wanted to hear] told us of 'the Recession we had to have', well this is going to make that look like a walk in the park. The '87 crash hurt, the Asian Banking crisis was mainly ‘their’ problem, and the DotCom crash was swept away in less than a year but this sucker is going to force the world to take stock. Humans never learn from history. We all know that ‘BUST’ will follow “BOOM’ sure as night follows day but this time we thought we were too clever to be caught again. Well we don’t look to clever now.

Sure the problem first exploded in the US and sure they were possibly the worst offenders but this scenario is a world-wide problem. Don’t be comforted by our Pollies saying it won’t affect us, it is only the depth of the shit that is different - it is still the same shit. Our banks weren’t allowed to be as foolhardy as the US banks but they still played the same game – you can [or could] get a mortgage for 100% of the Blue Sky valuation of your new house, you can even borrow for the Stamp Duty and moving costs. These are loans that will backfire when the economy slows and unemployment grows, it is out there ticking as we speak.

Let me say this loud and clear. If you have to borrow more than 60% of the value of a property then you can’t afford it. If you borrow 110% of the value of a property then you are crazy. It didn’t work last time, it won’t work this time and it won’t work in the future.

There isn’t much we, as individuals, can do about this current mess, but sit there and watch it happen. Sure the US is going to the polls in a few weeks, and looks like changing governments, but if you watch and read the new boys are still playing the popularist game and blaming everybody but the voters. Unbelievably both sides are still talking of TAX CUTS for the average Joe, that is like giving an alcoholic another drink. It is time we acted like adults and stood up and admitted our stupidity.

Well, are you brave enough?

We will get through this shit, it will be painful, but it won’t kill us. My concern for our kids is that we learn from this debacle once and for all. If we are posting on OzVMX about the recession of 2021 and wondering how we got into this mess again then I think there isn’t much hope for the human race.

But, if we can finally realise that living within our means, both financially and ecologically, isn’t a bad thing then this may actually be the best thing to happen to this planet in the last 200 years. We aren’t bullet proof and our amazing technologies, whilst significant, can only slow the inevitable. My hope is that the significant pain caused by what is coming will finally swing the pendulum away from personal satisfaction fuelled through mindless, selfish, insatiable greed towards a simpler more sustainable existence.

So like anybody who suffers from an addiction, the first step to recovery is to admit the problem. Lets stand up and admit that we are addicted to CREDIT [it mean dept guys] and learn to say NO!!! to Banks and institutions that offer us money to BUY IT NOW. All it takes is one little word. Say it loud and proud…NO!!!!!!!!!

Say NO to the Banks! Say NO to Harvey Norman and their 4 years interest free!. Say NO to the Politicians and say NO to yourselves! Now that wasn’t so hard was it. And the best part is that like all individuals who work hard to beat an addiction - the world will seem like a better place when you are not a slave to something that removes your ability control and enjoy your life.

Please, lets look back on this and tell our grand kids that the Crash of ‘08 was ‘THE PRICE OF AN EDUCATION’.
VMX42

[Nathan S]

[A whole heap of really good stuff]

Pretty accurate summation there, Mr 42.

Was talking to my older sister the other day, and she made the point that we were near the end of our time at school when the last recession was happening.
We were told "there are no jobs, you'll be lucky to ever be employed" and that as a consequence, there's a narrow age bracket (say, 28~35 years old) that is actually quite financially conservative.
If I look around at the people I know, none of the financial risk-takers are in that age group.
To be sure, many people outside that age group are financially responsible, but it doesn't seem to be quite as universal as it is for people who have stared down the barrel of never having a 'real' job.

Which it why Anna and I borrowed less than half what the bank was offering, have no other debt, drive shitty old cars*, and are ahead on the mortgage repayments...

Can I please have an early mark, Mr42?

*Hey, I like my shitty old cars. But the newest car we own is a $1500 EL Falcon...

[vmx42]

Well Nathan,
It is that kind of responsible thinking that is part of the solution, not part of the problem.

Life doesn't end when you say no to credit. I have good friends who think I am 'austere' [their words not mine], but the money I have saved in interest payments over the last 17 years since I paid off my mortgage would buy an average house. And I can sleep at night.

I hope what you say about the next generation is true.
VMX42

P.S. and there is nothing wrong with shitty old cars, or motorbikes for that matter!!!

[Lozza]

I wouldn't completely agree Jeff, today we have a new wave of 'financial engineers' who use 'leverage' and 'short selling' etc etc (whatever that is) to, get returns on capital.The returns are demended by who provide the capital. That's what they are paid to do.Just as you can buy a NOS part on the other side of the world and have it delivered to your door, so can capital move just as easily around the world. Pressure for returns drove down the criteria for lending.To say we are all to blame is not quite true either. I'm sure you have used a toll road, you fully understand that you pay a price for the convienice.However if if a bridge on the toll way collapes, it's impossible to blame the unfortunate souls driving across it at the time of the collapse.

[Wombat]

Just on the personal debt thing I heard some figures on the ABC during my drive to work.

I didn't quite catch the number of credit cards in OZ but it was either 14 or 40 million.
That's in a Country of...is it 22 million residents?
Anyhoos, the kicker was the statement Australias credit card debt currently sits at $44Billion!
I've had my card for four years and manage to pay the balance in full every time.
I think that's important. In fact it's my personal mission or challenge to never pay interest on the plastic!
If it's used for convenience with the intent to pay in full then it's a good thing; a handy thing.

So I agree with vmx42 on the personal greed. Too much of this pain is self inflicted.

[firko]

I shudder to think of the billions of dollars the United States has spent trying to rid the world of Osama bin Laden and the Taliban, blaming them for undermining the American way of life when in reality the true enemy of their system was Gordon Gecko and his greedy Wall street cohorts.

I think Jeff and Nathan are pretty much on the money (no pun intended). As a society we have ALL contributed to this mess with our blatant consumerism and absolute need to posess the biggest, best, fastest and flashest, even when we couldn't come close to affording it. I've seen so many people jump onto the McMansion bandwagon and dive head first into a mortgage that has sent them to the edge and destroyed any semblence of quality of life because the three jobs needed to pay the mortgage takes away every minute of free time and every last cent of usable income. I have a smallish fibro house, in a not so flash suburb but it's fully paid for and I'm comfortable and happy. Thankfully I've never been stricken with McMansion syndrome. I saw my sister lose her house in the Homefund crash in the early nineties and wasn't at all surprised knowing that she and her then bludger husband would never be able to cover the mortgage on their minimal income. I learned a big lesson from watching that scenario unfurl and vowed that it'd never happen to me. I started to cut back on my credit card overdraft and cut back severely on my then yearly trips overseas.

.I'm retired now, and living off my rolled over super and have learned to live within my means, which includes keeping the card in the black. My only extravagances are a small weekend property, a smallish collection of vintage bikes and my beloved XJS Jag which I bought for 3k and restored myself rather than borrowing 20k and buying a Mustang or Corvette. Most of my toys are bought as junk for junk money and slowly restored, The overseas trips are now very few and far between.

With the dollar at 66c and sinking fast I'm glad I bought my last (meaning final) batch of vintage resto candidates from the USA at 96c. I've accumulated the parts to restore all three of them and can hopefully now build them without buying too many bits from overseas on the poor exchange rate. I think we'll experience a downturn in our sport in the immediate future until the turnaround commences. Until then, we'll probably see less new bikes appearing and the cheaper classes take the spotlight.

Like others have commented, it's not all "woe is me, the sky is falling". The cycle will eventually start to come around but until then we'll have to all learn to live a more austere life with fewer luxuries that we don't really need. We also need to support as many of our local companies that are feeling the pinch and to even cut back on American or Brit eBay and support our own local economy. It's going to be a bumpy ride for a while but we'll get through it in the end.

[YSS]

By the looks of all the posts , I am not the only excentric. Must be a VMX er thing to look at ther world as it really is. Likewise to many others , banks and cards are only good to me  in the black . So with all the precautions taken, this storm should not bother us to much then.

[asasin]

Just a note , cost of bail out 1 trillion dollars . 1 year in Iraq 3 trillion .Having been on both sides of the credit issue in my life . low Debt is the only way out . I might not impress the neigbhours but i get to keep what I have! Spare a thought for us in NZ our pacific peso (nz$) was 57c US this morning and dropping, so you can still have a vmx holiday here.