Will this stock market madness affect cards?

[irv]

Originally Posted by japhi

No idea what will happen with cards but the next 4 weeks are going to be brutal. We are really only 3 weeks into layoffs and 6mm people have hit the dole, mostly front line workers. Next shoe to drop is workers who service these industries, including a significant amount of high paying jobs. Basically millions of layoffs each week for the next 6-12 weeks.

I also don’t see a quick turn around. A lot of these jobs aren’t coming back, corporations are going to have to right size. I suspect we see short term UE in the 20% range, mid term around 10% and it will take years to get back to full employment.

I am also betting that spending habits change. A lot of people are about to learn how risky it is to live cheque to cheque. Consumerism was out of control the past decade. Here in Canada we are bailing out travellers that don’t have the funds to extend their stays overseas for an extra few weeks due to flight changes. Who goes away on a vacation with no extra money in the bank? Apparently lots of people think it’s reasonable to spend your last dollars on a trip to Mexico - these people are going to get wiped out.

It's amazing how many people live pay cheque to pay cheque but have all the latest greatest stuff one could imagine.

Not a nickle to rub against the other one but guaranteed they are going to get the next best iphone, or whatever it is when it comes out.

Not sure why we continue to cater/help these people out when they are too stupid/ignorant to know that having some savings is a good idea.

[CharleyBrown]

Not all people that don't have savings spend it in such a way. There are countless others that have to live cheque to cheque without taking trips or buying the latest device. In fact, the number of people that spend it irresponsibly are few and far between. How does government distinguish between those that are trying to make an honest living in a system that is designed to exploit them vs those taking advantage? They can't; so the moral thing to do is to help all and recognize some will cheat.

In fact, the misdeeds of the most wealthy and corporations costs governments far more than the average poor person needing government assistance.

If you're up for a good, non-partisan read during this period of quarantine, I suggest the book Tribe: On Homecoming and Belonging by Sebastian Junger.

Originally Posted by irv

It's amazing how many people live pay cheque to pay cheque but have all the latest greatest stuff one could imagine.

Not a nickle to rub against the other one but guaranteed they are going to get the next best iphone, or whatever it is when it comes out.

Not sure why we continue to cater/help these people out when they are too stupid/ignorant to know that having some savings is a good idea.

[irv]

Originally Posted by CharleyBrown

Not all people that don't have savings spend it in such a way. There are countless others that have to live cheque to cheque without taking trips or buying the latest device. In fact, the number of people that spend it irresponsibly are few and far between. How does government distinguish between those that are trying to make an honest living in a system that is designed to exploit them vs those taking advantage? They can't; so the moral thing to do is to help all and recognize some will cheat.

In fact, the misdeeds of the most wealthy and corporations costs governments far more than the average poor person needing government assistance.

If you're up for a good, non-partisan read during this period of quarantine, I suggest the book Tribe: On Homecoming and Belonging by Sebastian Junger.

I didn't say everyone, I said those that take these vacations and have everything under sun who don't save.

Of course many people are struggling to make ends meet, I am not ignorant to that fact. It just frustrates me when I hear/see the other side whining/complaining how they never have any money but have zero clue they are the reason for that.

I think the number of those people is greater than you think? I see/hear it in my relatively small city quite often so I can imagine what it is like in much bigger cities/metropolis's.

There are many T.V. shows and other information sources out there to help people curb their spending and get out of debt, but in order for many to do, like anything, they need to admit they have a spending/debt problem first.

https://www.cnbc.com/2019/12/26/cons...ble-spots.html

https://www.daveramsey.com/blog/why-...e-stay-in-debt

[CharleyBrown]

Dale,

I believe you when you say when you aren't talking about all those living paycheck to paycheck.

Regarding what I quoted.

Statistics say otherwise. As a people, we are more inclined to focus on those that a) cheat the system b) flaunt.

Yeah, those that live way beyond their means made their own bed, but let's not assume the majority of those living paycheck to paycheck do so because they live lavishly and don't save.

It's like the old facebook trope regarding people that abuse social services entitlements. "I saw this woman in front of me talking on her iPhone with a Gucci bag paying with food stamps." Sure, there are those that do that and they get lots of attention, but they are in the significant minority. Let me break it down.

If you look at the hard data, the number of "common" people scheming the system cost the states and federal government in the U.S. far less than the executives and those engaging in corporate fraud... and it's not even close. Maybe it's different in Ontario, but I doubt it.

Here are some numbers:

Approximately 3% of people abuse unemployment and entitlements like welfare. That costs U.S. citizens $3.5 billion dollars ($5,000 per citizen)

On the other hand, fraud by American defense contractors amounts to $100 billion per year. Corporate fraud (such as insider trading or cooking the books) is up by more than 50% of what it was a decade ago. Nearly 90% of those cases directly involve CEOs, CFOs and in insider trading cases, politicians. This fraud costs U.S. citizens more than $10 trillion (works out to be upwards of $45,000 per citizen)

Guess which group continues to get rich at the expense of others and drives marketing campaigns designed to sell to those struggling to get by while simultaneously shaming them for poor spending habits?

Let's not vilify the average person trying to get by in a world that is designed to get people to spend, spend, spend.

Originally Posted by irv

I think the number of those people is greater than you think? I see/hear it in my relatively small city quite often so I can imagine what it is like in much bigger cities/metropolis's.

[Leon]

"Approximately 3% of people abuse unemployment and entitlements like welfare. That costs U.S. citizens $3.5 billion dollars ($5,000 per citizen)"


Whomever says that is ignorant. That isn't a personal attack. it is they just don't know the truth.

Originally Posted by CharleyBrown

Dale,

I believe you when you say when you aren't talking about all those living paycheck to paycheck.

Regarding what I quoted.

Statistics say otherwise. As a people, we are more inclined to focus on those that a) cheat the system b) flaunt.

Yeah, those that live way beyond their means made their own bed, but let's not assume the majority of those living paycheck to paycheck do so because they live lavishly and don't save.

It's like the old facebook trope regarding people that abuse social services entitlements. "I saw this woman in front of me talking on her iPhone with a Gucci bag paying with food stamps." Sure, there are those that do that and they get lots of attention, but they are in the significant minority. Let me break it down.

If you look at the hard data, the number of "common" people scheming the system cost the states and federal government in the U.S. far less than the executives and those engaging in corporate fraud... and it's not even close. Maybe it's different in Ontario, but I doubt it.

Here are some numbers:

Approximately 3% of people abuse unemployment and entitlements like welfare. That costs U.S. citizens $3.5 billion dollars ($5,000 per citizen)

On the other hand, fraud by American defense contractors amounts to $100 billion per year. Corporate fraud (such as insider trading or cooking the books) is up by more than 50% of what it was a decade ago. Nearly 90% of those cases directly involve CEOs, CFOs and in insider trading cases, politicians. This fraud costs U.S. citizens more than $10 trillion (works out to be upwards of $45,000 per citizen)

Guess which group continues to get rich at the expense of others and drives marketing campaigns designed to sell to those struggling to get by while simultaneously shaming them for poor spending habits?

Let's not vilify the average person trying to get by in a world that is designed to get people to spend, spend, spend.

[nolemmings]

Originally Posted by Leon

Whomever says that is ignorant. That isn't a personal attack. it is they just don't know the truth.

And the truth is?

[Republicaninmass]

I had seen this article a while back. Seemed like a large number

https://www.usatoday.com/story/money...fraud/2127897/

[CharleyBrown]

Sigh, I know it's not a personal attack, but I don't shoot from the hip. You've seen my research on the Bond Bread set.

https://research.stlouisfed.org/publ...nsurance-fraud

https://s3.amazonaws.com/real.stloui...2/2012-024.pdf

On the other hand... not mentioned in my original post, but along the same lines: medicare fraud costs taxpayers $60 billion/year... in fact, Senator Rick Scott was CEO of a company that committed $300 million in medicare fraud and faced a fine of $1.7 billion.

https://www.nytimes.com/2013/12/19/u...d-economy.html

Oops... not 3%, but rather 4% - I admit my estimate was off slightly.

This article discusses the cost of the 2008 recession to U.S. citizens:

https://www.nytimes.com/2014/01/22/b...g-tallied.html

Originally Posted by Leon

"Approximately 3% of people abuse unemployment and entitlements like welfare. That costs U.S. citizens $3.5 billion dollars ($5,000 per citizen)"


Whomever says that is ignorant. That isn't a personal attack. it is they just don't know the truth.

[CharleyBrown]

It should be said that fraud of any kind, be it unemployment fraud, food stamp fraud, medicare fraud, securities and commodities fraud, etc. is awful and costly. However, the average person is more likely to vilify those committing food stamp or unemployment fraud despite it costing tax payers less overall. Meanwhile, the perps that commit the more costly fraud to taxpayers... securities and commodities fraud... are often overlooked.

Perhaps this is because it's easy to spot the person with a fake Gucci bag and iPhone paying with food stamps than it is to find the multi-millionaire (or billionaire) padding an extra zero to their net worth.

[AustinMike]

Originally Posted by Leon

"Approximately 3% of people abuse unemployment and entitlements like welfare. That costs U.S. citizens $3.5 billion dollars ($5,000 per citizen)"


Whomever says that is ignorant. That isn't a personal attack. it is they just don't know the truth.

I'm not sure if they are ignorant, but they are either math challenged or don't proofread what they type or something is not explained in the analysis.

There are currently around 340 million people living in this country. Let's be conservative and use the 2010 census figure of less than 309 million. Let's say 308 million people. Let's be further conservative and assume that 10% of the population are not citizens. That leaves 277 million citizens. $3.5 billion divided by 277 million is less than $13 per citizen. How did they come up with $5,000 per citizen? Or am I missing something?

[CharleyBrown]

Mike,

You're correct in that I failed to incorporate the rest of my data in my analysis and I was assuming that the figures provided were on the low / conservative end. That was my error - not ashamed to admit it. The data that I failed to include was medicare and medicaid fraud (approximately $100 billion/year, along with fraud in the private sector insurance industry ($100-300 billion/yearly). I also should have stated U.S. citizen over 18 or even taxpayer.

Once you factor that information in, it's about $2,000/U.S. citizen over 18. So even if one were to say that the number of people defrauding services is over 3%, the impact on taxpayers is still far less than the criminal actions of corporate executives that led to the 2008 recession.

Originally Posted by AustinMike

I'm not sure if they are ignorant, but they are either math challenged or don't proofread what they type or something is not explained in the analysis.

There are currently around 340 million people living in this country. Let's be conservative and use the 2010 census figure of less than 309 million. Let's say 308 million people. Let's be further conservative and assume that 10% of the population are not citizens. That leaves 277 million citizens. $3.5 billion divided by 277 million is less than $13 per citizen. How did they come up with $5,000 per citizen? Or am I missing something?