A Vote for Obama/Biden
5.8% Social Security COLA Increase for 2009

It's the Stupid Economy

[EDITORIAL NOTE: If you have written any blog posts on political issues this week, be sure to get links to me by Friday for the Sunday Election Issues post. If you're wondering what I'm talking about, see this post.]

category_bug_politics.gif If I have anything useful to say about last night's final debate, I'll post it tomorrow. Meanwhile, George Phenix, who blogs at Blog of Ages, posted a story a couple of days ago that I think captures what’s really going on around the U.S. and probably in Europe, Japan, Australia and other regions too. As he said in an email about his post:

“I am fiercely partisan for Obama/Biden. But this conversation was different. I could almost hear the same talk coming from kitchens and bars across the country. Too big for politics.”

Before I go any further, here is Geoge’s post about that talk:

This is the new national conversation.

Last week we met some friends for burgers. We looked forward to the low-key evening. How are your kids doing? Grandchildren? Any trips planned? Do you think you’ll go back to work? Should Brad Childress get fired? How about those ‘Horns.

Often (at our age), the big question is how’s your health? Not this time. Almost immediately, the conversation jumped into the economy.

Bam. One son has not been able to find steady work for a year, is divorced, and living in his parent’s home.

Bam. Another adult child is having a difficult time getting pre-approved for a home loan.

Bam. The ten-year-old van needs replaced but it is worth very little as a trade-in and credit is very expensive - if you can find anybody who has money to lend.

Bam. One guy wants to sell his business but the economic slowdown has caused the value of the business to drop to near nothing.

Bam. A friend has seen her retirement savings shrink by 40 percent in a matter of days. The funds took a life-time to build.

This is personal.

Not once did anyone mention the presidential election, nor either candidate, nor either political party. Not once.

Our problems are real. Our problems are bigger than politics.

I wish our politicians were.

Like one of George's friends, my retirement savings, meant to pay for my care if I become disabled or otherwise incapable of caring for myself, is down by 30 percent, mostly due to a Lehman Brothers bond (don't get me started on how pissed off I am that the government bailed out other investment firms, but not Lehman). I cannot imagine how I will ever make up that 30 percent difference, no what it will mean should I ever need that money.

What about you. How hard and in what ways have you been hit by the economic crisis? Please feel free to post comments anonymously today if you would rather not reveal personal details with your name.

[At The Elder Storytelling Place today, Brenton "Sandy" Dickson at last uncovers the significance of his enjoyment of Solo Hikes.]


Just a week ago we met met with our financial adviser to talk about our 'nest egg' and were told that we were down about 25%. What we didn't hear while we sat in his office that morning was the crash on Wall St. Where are we now? Who knows.

We don't have a plan for this; who would? And we don't know what it all means - yet. We only know that we are no longer safely into our retirement. Any cushion, real or imagined, is gone.

But we're lucky. I can't help but think of those who would be glad to have a fraction of what we lost. As a society, we need to be watching over each other, that's what civilized societies do. Yet I didn't hear any candidate talk about raising the minimum payments for Social Security...

Gotta stop. Too much to talk about in a small space.

Nest egg? What's that? When my marriage finally fell apart ten years ago, my now ex-husband made damned sure that I got little (read: nothing). In a job market that doesn't hire people over 50, I've had no chance to recover. Am I angry? Damned right. Will I survive? Who knows? I'm just muddling through. I'm still working part-time and will do so as long as I can whether I feel good or not. I'm going to wind up in a truly bad nursing home and die of neglect.

Hubby and I have been both lucky and smart and have a federal retirement (small) and federal health care and we have no outstanding debt in retirement. Our cushion in the stock market, which was for emergencies has been reduced by 35% over the last year. I took 50% of that out last week and put it in treasuries so I am even more weighted in investments that will be eaten by inflation. All of this does not prevent me from worrying about the employment security for both of my adult children nor seeing the fatigue and fear in the eyes of those folks who are one paycheck from disaster. I am smart enough to know that this will continue to impact me as well.

My savings, invested in a bank with American affiliations, went down 25% because of the fall over the last weeks. Those savings were modest to begin with, now they are puny. Like Kay, my husband and I will not be able to retire. The savings were to help put our children through university. Now that possibility has more or less disappeared. We'll manage. I'm not sure how, but we will. All the best to you Ronni. It is good to be a part of your group here of concerned elders.

I was fortunate (or farsighted) about two years ago when I instructed my broker that whenever we made any changes in my 401K that proceeds should be held in cash. When the crash hit I had about a quarter of my 401K in the money market. I have since moved about half of that into laddered CDs.

Nevertheless I am seeing losses in five figures for the past few months on the part that is in mutual funds and the like. Who knows what this month's statement will bring. Yes, it is belt tightening time for us, but, since I'm already long retired and 71-years-old, it would be difficult to have to come out of retirement and get a real job. Perhaps being a greeter at Walmart would be an option. I think we will just take everything up a notch and wait this one out. I have hope that if and when we get a democratic president and congress that they will approach our financial difficulties sanely and we might be mostly out of the woods in three to five years.

Stock market losses are only realised *IF* you close out your positions.

History tells me to ride this out and in ~2years it'll be back where it was, zero losses. Timing is everything. The more pertinent question is: CAN you ride the timing out??

Most position taking right now appears to be sentiment over reality: has ANYONE actually looked at intrinsic values vs share prices and not thought this might actually be the time to buy shares **if you have the cash**??

It is the CASH hits that are the real concern - the hit on income streams (dividends on investments etc) and an inability to move through the day due to tightened credit markets. Keynes' Money Multiplier has shrunk to impossible lows. And youre right - that isnt about the colour of your politics.

Last night I looked at our investment portfolio and it shows a 51% loss for the year to date. '07
was up 25% over the previous year and '06 was about the same so basically we're back to where we were in 2005.
Is that really bad? It could be a lot worse I suppose but the fact is that there is nothing I can do about it now and dwelling on my losses will not do anything for the bottom line. Blaming the guys in Wall St. who caused the disaster through investment strategies based on greed and the pusuit of the quick buck isn't going to do any good either.
Instead, we all have to "Pick yourself up, dust yourself off and start all over again."
At 74 I'm not going to find a job that's worth anything at all but I can be more careful with expenses and look for opportunities to improve my financial situation. I know I can't rely on the government to get my money back but I can hope that the new administration will keep a careful eye on the Wall Street Gang in the future.

As one of the "youngsters" of this group at 49, I'm years away from retirement and hopefully my TIAA-CREF account will rebound. But I must admit, I have no idea how much money I have lost as my last quarterly statement is still sitting unopened on my kitchen table.

One thing I'm very glad about is the decision I made five years ago to put any additional monies into paying off my house and not into my retirement account (although I am putting in a modest amount into that fund every paycheck). So, my house will be paid off in just under seven years when I'm in my mid-50s and that should help quite a bit.


I am lucky. I am young enough that, as long as the stock market recovers, I can afford to wait for my retirement account to recover with it. (In the meanwhile, I am trying not to think too hard about what that account is doing. It's not a pleasant topic to let myself dwell on. Although, thanks to some laziness - I hadn't moved funds where I thought I wanted them in a while - I have more in cash than I normally would, for which I am now grateful. I still have enough in other investments to not want to consider what is happening.)

I am wary of the next several years for my own sake, but as long as we keep our jobs we should be okay. If we keep just one of them, we will struggle but still survive, I believe...assuming no unexpected expenses.

If my parents were alive today, however, I would be more worried about our jobs. They were dependent on Dad's IRA for part of their retirement income - THAT would be a disaster now. (Why would I be more worried about our jobs? Because the obvious solution would be to help them until the stock market recovered, so they could avoid taking any more out of the IRA than mandatory withdrawals, since anything drawn out now would be a loss.)

I think my job is pretty secure. I am not so sure about my spouse's. I think both companies are secure but, of the two, I work in an industry less likely to have problems in this mess.

We need to replace one of our cars. It is 13 years old and we started the hunt for a good model to replace it last year. Now? Now I am wondering how much longer that old car can go. It is still functional, we are just worried about the day when it won't be. We are probably better off using it until that day and then buying a cheap used car when it does happen, rather than either depleting our savings this early in the mess or taking out a loan (if we could).

And I? I'm blessed. I've got it GOOD in this mess, and I know it. So if I've got it good and I'm tracking this many things and more and looking for ways to save to increase my cushion...I think of our country in general, of where everyone else is, and it's enough to make me want to cry.

What can we do for our neighbors, friends, and community during this time without increasing the burden unduly on ourselves? (For some people that will mean no monetary cost, for others very little.) Are there ways and places to volunteer that will ease costs on an organization so they can put more money into goods that help the needy? I need to look into that.

Our investment guy had taken out some of what we had in the previous year; so we had about a quarter in money markets (which have also been endangered) of the rest, the overall account went down about 40% as best I can tell as of right now. Some is total losses and there was some Lehman Brothers and some Fannie Mae. We had thought he wasn't into those but this is a managed account, the kind you have to keep from paying taxes on the whole thing and roll it over under your own control. Although I have since heard there are some accounts that do allow you to manage them and still keep them in the retirement category.

Although we are both 65, my husband hadn't intended to retire for awhile. He is a consultant and has projects he likes. It's a good thing as clearly if he had, it'd have made this tough going. We will stay in the market to the level we are with the hope that it will go back up eventually. If we got out now, our losses would be in concrete. If we stay, who knows-- unless companies totally go under.

What makes this hard for most Americans is that we don't know enough ourselves to be wise in our investing. Many of us count on someone else to know and they didn't either this time.

We are in a fortunate position with no real debt, a farm that can generate a little income (very little), no desire to take expensive trips or eat out a lot, and not needing to start taking out of the retirement funds; but that is if this thing only stays down a year or two. Who knows what is really going on! It's definitely and upsetting time and that huge bailout may not help at all. That's what is so maddening. Our government is in worse shape than we are economically and keeps piling on the debt. It seems nuts to me but what do I know? I am just an ordinary citizen

I am 64. I lost 43% of my 401K this year so far. I moved everything into treasury bonds last week. Everyone told me I was crazy, especially on Monday and Tuesday with the stock rebound. But it was down again yesterday. Treasury bonds won't make me money but I won't lose at the level I was losing.
I own my house, still paying a mortgage cause I stupidly refinanced 3 years ago when the real estate market was high. My house had increased in value by 4 times what I paid for it. I used the money to fix up the house and thought I would retire by 66 (if women retire at 65 now, the monthly stipend is nothing, if you wait to 66 and 10 months it doubles (2 times nothing) and if you wait to 68 it triples). But SS may not be around in 4 years if McCain gets in. My house is now devalued by half thanks to the housing market decline.

Bottom line: I cannot retire in the forseeable future. If everything rebounds, it will still take at least 2 good economy years to recoup losses and start increasing savings again. But that is only IF. I can't even live on the 68 year old SS if my house doesn't rebound also. I thought that would be my nestegg.

I cannot watch the news, look at stock market prices or frankly even think about the economy. I have 5 grandchildren and another on the way. My children are happy and healthy. This is the bounty that gives me hope.

I have to add that when I started watching the debate last night, for the first 30 minutes or so, I thought McCain would win and rebound, I was so depressed. Polls late last night showed more favorable response to Obama. I can't wait for the election and am counting on a new beginning for all of us.

I want to add that I love my job and the people I work with, that is my solace also. But I have worked practically all my life (since 16). I am tired. I wanted to travel and play with my grandchildren. But I recognize that I am luckier then most to have a job with a solid company that actually values us "older folks" and there is no retirement policy. You can work here forever as long as you do your job well. For that, I am blessed.

Both my husband and I retired early - in our 50's - and paying heed to conventional wisdom at the time, we took our pensions as lump sums. We were about 70% invested over the last year. We are on social security now as we are in our mid-sixties. We have lost over 6 figures but I also have moved a lot into a money market and am taking my time moving it to bonds or cds. I feel we will be ok.

My biggest worry is our youngest son who (in his 30's and with our help) is finishing a degree. He has Type 1 diabetes and has had multiple eye surgeries this year. I am supporting Obama for his promise of universal health care.

Please read Robert Reich's latest post on his blog: (robertreich.blogspot.com)
It is the clearest and most insightful comment on the "crash" that I've seen anywhere.

We've been 30% in stocks in recent years, and that's put away in a pre-tax (TIAA-CREF) annuity for use 10 or 20 years down the road. I continue to average into the market, which is irresistible given the huge sale on stocks.

But mostly I just went out and rounded up some work which I enjoy, so we are running on income even though retired. We have CDs laddered just in case. I'm 6 years from Social Security and my wife 4 (that's to 66) and that and an annuity will pay the bills then.

Sooner or later the stocks, bonds and real estate in our pre tax funds will bounce back.

So, the lifestyle is intact here.

Most of my good friends are retired or about to be so, so we're reeling under opening those quarterly statements, but we sure won't be tapping into IRAs next year even if penalty-free. The biggest annoying expense I notice is in gas and groceries. When was the last time you splurged and bought an avocado!? We are very conscious to combine trips to town twenty minutes away, and try definitely to limit our travel. Budget items are first in the basket for groceries and we've cut way back on treats of any sort. Ditto dinners out, movies, even regional travel.

With many suffering far worse, and the damned wars still raging, how cna the election be anything but a landslide for Obama and new thinking?!? (If people were really thinking and not seeing things just thru fear.)

I've probably lost 20% via Edward Jones and A.G. Edwards' stocks, and will have to live to be a 100 to see them come back to what they were a year or so ago. Sheesh....

29% here.

We've been on a strict budget for a long time now. With the current financial crisis, we have no more wiggle room for any more cuts. Everything has gone up - bills are behind and it is on a rotation as to who gets what and when.

Rent has been increased on the apartment as well as on a necessary work space for domestic partner.

We didn't have any investments in the market. Yet, I hold deep empathy for those who did and the losses I read about. Change in finances and downslides happen very quickly. Almost in a blink of an eye sometimes. Catching up is quite the challenge as once you catch your breath, sometimes you coast breathing normally and them oops along comes an unexpected necessity.

These days I admire the self-sufficient, the self-employed who have contributed to a better marketplace as well as to their own lives. I think we are all going to need to learn how to grow food (or at least some food), start mending clothing, learn to shop thrift shops or yard sales to replace broken appliances and so on and so forth.

Even without a recession or worse decline, measures such as this can be first steps in taking back control of one's life as well as saving some money.

403B and IRA down 40%. Condo purchased in 2005 worth about half what I paid. Now -- here's what steams me. I talked with Countrywide about negotiating the actual balance or any other details, and they said NO -- because I pay my mortgage and debts on time. Once again, I cannot find full-time work, only part-time. With this new bailout in place, the only way I can get mortgage relief is to STOP PAYING MY MORTGAGE, so that Countrywide notices me and my problems, and plays let's make a deal. Otherwise, relief with only go to irresponsible borrowers who purchased more than they could afford. Let those of us who pay on time trade up into those foreclosed properties that we couldn't afford last year. I am supposed to rejoice that I help me neighbor stay in a four-BR home with 2cg, pool, and hot tub while I live in a condo that went to ruin after hurricane Wilma. Grrrrr!

I was struck by Rain's comment: "What makes this hard for most Americans is that we don't know enough ourselves to be wise in our investing. Many of us count on someone else to know and they didn't either this time."

I'm reminded that investor Warren Buffett has said that he invests only in what he understands. So, even though Bill Gates is a good friend of his, Buffett says he doesn't invest in tech companies, for example, because he doesn't understand them.

I have lost 50% value on a very small token investment in a publicly traded company, but it's still worth twice what I paid for it. I don't know what that means though as I haven't taken the time to figure out how cost of living and inflation are reflected in that gain over recent years. Have I really just broken even or has my investment's dollar value actually eroded? There have been yearly dividends to be considered, too.

I have very real concerns that cost of living and inflation will take a toll on my other monthly income reducing my dollar's value. I consider myself fortunate to have a profession I can practice and can still work to earn what I need to cover the rather high dollar expenditures required to keep it current yearly in my state and nationally.

We have to keep making the issues with which we are concerned known, pursue obtaining meaningful representation in our Congressional offices, states, counties and cities. We do this not only for ourselves but for future generations including our children and grandchildren. What greater legacy can we give them?

This is a terribly sad thing to have to say at age 71, but I am happy that I,like all of my ancestors before me, have no retirement fund, no savings, and no high-priced home from which I was hoping to make a "killing" when I sell it.
All I have are my brain and my own two hands with which to keep on making a living until I drop over or have to move in with one of my kids or into the dreaded "nursing home".
I will be forever grateful for my good genes that gave me a tough body, and (so far) good brain ... thanks to those same ancestors.

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