Global Economy Bursting?

[Couch Potato]

 

[Workbox]

Ouch !! Such a true observation.

 

[Couch Potato]

Like most things college is a good investment at the right price. Most seen to approach choosing colleges like an ignorant car buyer saying to the salesman "which car do you want me to buy and how much do you want me to pay?" The questions should be about what they want and need along with who has it at the lowest price. Is a car a good investment of funds? It certainly can be in that it allows for efficient, individualized transportation, but overpaying for one that does not run reliably is not a good investment. Likewise a college degree can equip someone to have the career they want, or it can be a useless piece of paper. It all depends on the person and the degree. A degree is a vehicle to get where you want to go just like a car.

 

[Couch Potato]

From 2000 onward the cost of college tuition and fees has basically disconnected from any underlying sensible metric. The large thing fueling this insanity is the access to crazy levels of student debt. Income over this last decade has gone absolutely nowhere so people are simply funding this spending with debt. This is likely to hurt net worth figures even more. Think about this. A student graduates with $50,000 in debt and no savings, a very likely scenario. Right off the bat, this person is in a negative net worth situation and by the facts showing nearly $1 trillion in student debt (and growing) many are in this spot.

Then again, a 40 percent drop in median net worth didn’t get much attention in the media. This generation of college graduates cannot earn their way of negative net worth.

You hit that nail right on the head. Just as easy money caused housing prices to irrationally inflate, easy money is inflating the cost of higher education. Last year North Carolina enacted a law allowing community colleges to opt out of the federal loan program and its accompanying regulation as a way to control costs.

 

[Terrel L. Shields]

Most seen to approach choosing colleges like an ignorant car buyer saying to the salesman "which car do you want me to buy and how much do you want me to pay?"

I think most 18 yr. olds have approach college with certain motivations that probably haven't changed much. My mother was a teacher's aide, father worked in a union job with Pet Milk. He hated both the job and the union...and I don't think he ever used a Pet Milk product in his life. He just knew it was steady work most years (laid off during droughts because of low milk production though..) and the "best" job (the one he liked most) was, of all things, cutting brush on the R-O-W for the telephone company back when all their lines were overhead. It was outdoor work. His farm made about a third of the income and was something you did after you got off work...he would loved to be a full time farmer but the cost even then was too high. He hated debt.
I knew I didn't want to be either a teacher's aide nor work in a milk factory. Nor did I want to raise chickens. I did like the cow part. Ditto my brother. He became a banker. I went to college, but with a less clear vision of becoming a geologist..or maybe meteorologist...And even after in college, did I want to pursue a career in mining (don't like underground mines)...petroleum (everyone hated them then too..)..or maybe just some geezer in the desert with a gold pan and a pack burro. Environmental geology, I liked that ...until I got a job as one, $2.80 an hour...less than dad was making as steam broiler operator (fireman) at Pet Milk..hmm. Maybe I should rethink this job business. Petroleum it was as much by accident as design. In fact, I was recruited by a fellow grad who had gone in the business. His call came the week my first wife left. I was free to go.
I don't think today kids are any more focused on some future they barely see and clearly do not (can not?) understand. Was there a single one on this forum who woke up the day after graduating from High School and said, "I want to be an appraiser."
When kids choose a career path, what piqued their curiosity to go that route?
Lure of big money? Doctor and engineering students often say that. Political science was the career path of many who wanted to be a lawyer. It was only later that they realized a career in law could be given a huge boost with a degree in engineering or a "hard" science.
Something they really WANT to do? My friends granddaughter is all of 11 years old but wants to be a veternarian. She loves animals...too much. I just cannot see her being able to put an old dog to sleep. There is a heckuva lotta things they don't tell you about a job when you see Doctor Lisa save a kitten on TV.
Some, especially those limited by money, work, take a course or two, work, and often even then have little clear sense of career and often are very dissatisfied as it is.
I think particularly of one young lady whose family has suffered a great deal of health issues both herself and her father, the breadwinner. She is smart. Makes A's but simply as a single mom lack resources to get the deal closed. After obtaining junior status, and as age 28~, child is 11...she took a permanent job with the casino. It pays well for the area. Her medical biology degree on the back burner. I fear she's never going to complete it. Not that she might make a lot more than where she is, but that it really was a goal. I think her job satisfaction would be much greater than pit boss....speaking of which, I notice that very few people who work the tables at the casino ever gamble...they watch too many peoples' lives crumble before their eyes.
So I kinda feel sorry for the young (our grandchildren) today. Our generation (baby boomers) instilled into their (the youth's) parents nothing about the vision of a real harsh world. We gave them everything, they grew up in a land of plenty, and they now don't have the life skills and self-discipline to pass onto the generation that is now waking up to a world that, for perhaps a decade or more, is going to be a much less prosperous place to live.
Can we expect them to go to college, choose the "right" career path that is both satisfying and profitable? Do they have to choose between the bohemian lifestyle of an educated but improvished adult...or simply settle for grunt work in the modern equivalent of sweat shops? It's not a pretty choice.

 

[DTB]

Good post Terrel.

I think the disservice many of the boomer parents have done to their kids is not emphasize enough the impact of their choices.

The single mother in your post is doing a wonderful job, IMO. To think however that having a child at 17 is not going to limit your choices or opportunity is crazy.

One is free to make choices, I got married at 22 w/o a degree, spent $50,000 for my son to play minor hockey, those choices had consequences. It limits my career choices and cut some discretionary spending but I'm happy with those choices.

One truly cannot have it all. That is not made clear to enough young people.

 

[Terrel L. Shields]

One truly cannot have it all. That is not made clear to enough young people.

I think for about 20-25 years though, a lot of people thought this new prosperity meant they could work less, buy more, and not have to worry about it because the value of their home and property would always increase. That second home in the mountains would pay for itself...ha.

I just witnessed a farm that was in the same family since 1844 have to sell out largely because the generation my age (2 brothers) took on far too much debt. In the end they simply could not cash flow it. The asset was worth far more than they owed, but the cash flow simply wasn't there as a drought year cut their production in more than half. With the note called in, they managed to find a white knight. They were left with 5 acres and a house each, sold off the machnery and was left with not too much money each. 350 acres up in smoke so to speak.

 

[DTB]

Yesterday was a very good month! Right off the top of value at the open and never looked back.

Buy the rumor, sell the news. :new_smile-l:

You know me better than that Al. Buy at low value (support) and sell at high value (resistance) Anyone can do it, the trick is determining S/R.

Friday was a good buy, took all freaking day though to pay off.

 

[Workbox]

You know me better than that Al. Buy at low value (support) and sell at high value (resistance) Anyone can do it, the trick is determining S/R.

Friday was a good buy, took all freaking day though to pay off.

Your statement is very correct, resistance and support. It just seems that some meetings and news are timed with both the S/R lows and highs of the market. At this moment I still smell a Rally for these coming elections. Lets be diligent and watchful and pray for blessings for your fellow man.

 

[Randolph Kinney]

Americans renouncing citizenship at record levels to protect wealth

http://www.myfoxphoenix.com/story/1...itizenship-at-record-levels-to-protect-wealth

America's rich are renouncing their citizenship at record levels -- just to get richer.

Startling new data from Uncle Sam show that defections by Americans are expected to double this year, largely to avoid any stiff tax bills resulting from the proposed 55 percent hike on the rich, as well as the likely Dec. 31 expiration of the Bush-era tax cuts.

As many as 8,000 US citizens are projected by immigration officials to renounce in 2012, or about 154 a week, versus 3,805 in 2011, or about 73 per week.

"High-net-worth individuals are making decisions that having a US passport just isn't worth the cost anymore," according to Jim Duggan, a lawyer at Duggan Bertsch, which specializes in protecting assets of the wealthy. "They're able to do what they do from any place in the world, and they're choosing to do it from places with much lower tax rates."

Duggan added, "Some are philosophically disgusted at the course our country is taking, in all kinds of ways. They're making a strong protest of 'enough is enough.' But largely, it's an economic decision."

Duggan said that dozens of tax-haven nations and island regimes around the world eagerly welcome disenchanted rich Americans with quick citizenship, business deals and protections from the US Justice Department and the IRS. Among the popular spots: Australia, Norway, Singapore, Cayman Islands, Costa Rica, Guernsey and Antigua.

And there is one way to have your cake and eat it, too, he added.

The US possessions in the Caribbean -- St. Thomas, St. John and St. Croix -- give a 90 percent tax credit to US citizens living there at least 183 days a year, resulting in an effective tax rate of just 3.5 percent, he said.