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Invelos Forums->General: General Discussion |
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Global Economic Meltdown |
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| Registered: March 13, 2007 | | Posts: 4,596 |
| | Posted: | | | | Quoting Unicus69: Quote:
Quoting Danae Cassandra:
Quote:
Really? I guess I don't know much about economics, or I'm behind the times. I always through payroll came out of profits or accounts. Like I always thought it worked this way - your company makes X this month, out of that you pay Y in payroll, Z for expenses, put A aside for later, and B goes to you the owner. I suppose I'm just naive about the way things are supposed to work.
That is how business is supposed to work. Unfortunately, it doesn't. More and more, companies are borrowing money based on projected receivables. When those receivables don't meet expectations, they borrow more money. It can turn into a vicious cycle that ends with the company going under. Exactly. That's where we stand right now. I'm in the Produce industry, and with higher than normal operating expenses, we're struggling...as are many in the industry. Our customers are paying their invoices later and later but the expenses keep coming in. Now, with the credit crunch it's looking grim  . | | | | My WebGenDVD online Collection |
| | Registered: May 26, 2007 | Reputation:  |  Posts: 2,878 |
| | Posted: | | | | Okay, I don't feel quite so dumb now. I figured that's how it was supposed to work; the fact that companies were borrowing against future profit to pay for current payroll didn't occur. (Though I suppose it should have, I should have thought about tobacco farming, which works the same way as I understand it.) I feel really good now about the shop I work for, since this month's payroll came out of last month's profits. I guess the fact that we're behind the times in so many respects is a really good thing.  | | | If more of us valued food and cheer and song above hoarded gold, it would be a merrier world.
-- Thorin Oakenshield |
| | Registered: March 13, 2007 |  Posts: 1,380 |
| | Posted: | | | | If the governments would just let the banks fall, what would/could actually happen to your average joey? | | | | Last edited: by whispering |
| | Registered: March 15, 2007 | Reputation:  |  Posts: 5,459 |
| | Posted: | | | | Off the top of my head, I'm guessing most of your money is in a bank account. If that bank falls, how do you get access to your money? How does the company you work for get access to their money so they can pay you? Average Joey would not be a happy bunny!  |
| | Registered: March 13, 2007 | | Posts: 1,380 |
| | Posted: | | | | Quoting northbloke: Quote:
Off the top of my head, I'm guessing most of your money is in a bank account. If that bank falls, how do you get access to your money? How does the company you work for get access to their money so they can pay you?
Average Joey would not be a happy bunny! Americans are not happy about the government handing out money to help the banks not crash, surely they wouldnt want that to happen? Our government also made a trash bank that bought the bad loans in the 90's cause of one of the worst depression in our countries history, it worked. But the experts here say the situation in US is too diffrent to be compared to that. |
| | Registered: March 13, 2007 | | Posts: 21,610 |
| | Posted: | | | | North and Whispering We have a little thing created in the wake of the Great depression called the FDIC (Federal Depostory Insurance Corporation). It is an insurance fund underwritten by the US Government that "guarantees" the safety of all bank accounts up to a maximum of $100,000 per account. ome like to see that as a safety net, but ir doesn't take much to understand that if the Government started just "allowing" banks to fail the FDIC would very quickly become overwhelmed and money would indeed be lost. This is an absolute mess and care must be taken, especially when involving the Government. Part of the problems that led to the Great Depression, besides a Tax increase in 1932 that destroyed everything, was that every action taken by the Government to attempt to counter the trend, only succeeded in making it worse...a little bit like what we seem be to seeing right now. It's gonna hurt, that is certain, how much is the unknown. Skip  | | | ASSUME NOTHING!!!!!!
CBE, MBE, MoA and proud of it.
Outta here
Billy Video | | | | Last edited: by Winston Smith |
| | Registered: June 12, 2007 | | Reputation: | | Posts: 2,665 |
| | Posted: | | | | I think the bailout last week included a provision to bump the $100,000 to $250,000. Not that the FDIC automatically has any more in its coffers to support that.
I thought i heard on the radio this morning the Eu was going to require some minimum equivalent insurance. | | | | Bad movie? You're soaking in it! |
| | Registered: March 13, 2007 | | Reputation: | | Posts: 2,394 |
| | Posted: | | | | Another of the unintended consequences of the actions the US Government took during the Depression seems to be happening today, too. If I recall my economic history correctly, the US imposed stricter tariffs on imported goods to stave off some of the problems of the depression. What those actions did was export our financial troubles overseas -- other countries imposed more tariffs in response to US action and the unintended consequence was making the US crisis into a world crisis. It may have happened anyway, but it was certainly fueled by the US-imposed tariffs. | | | Another Ken (not Ken Cole)
Badges? We ain't got no badges. We don't need no badges. I don't have to show you any stinking badges.
DVD Profiler user since June 15, 2001 |
| | Registered: March 13, 2007 | | Reputation: | | Posts: 6,635 |
| | Posted: | | | | Quoting tweeter: Quote:
I think the bailout last week included a provision to bump the $100,000 to $250,000. Not that the FDIC automatically has any more in its coffers to support that.
I thought i heard on the radio this morning the Eu was going to require some minimum equivalent insurance. This is a temporary measure, BTW. As of January 1, 2010, coverage goes back to $100,000. Also, for those that are interested, the NCUA is included in this, so Credit Unions have the same coverage as regular banks. | | | | Hal | | | | Last edited: by hal9g |
| | Registered: June 12, 2007 | | Reputation: | | Posts: 2,665 |
| | Posted: | | | | Quoting hal9g: Quote:
This is a temporary measure, BTW. As of January 1, 2010, coverage goes back to $100,000. Didn't realize that. Thanks. | | | | Bad movie? You're soaking in it! |
| | Registered: March 19, 2007 | Reputation:  |  Posts: 6,018 |
| | Posted: | | | | In the EU all countries have agreed to guarantee the savings of individuals up to 50,000 euro per bank. Some countries (including mine) are providing guarantee up to 100,000 euro per bank. Ireland is providing a guarantee without limit. | | | | Last edited: by dee1959jay |
| | Registered: March 13, 2007 | | Posts: 21,610 |
| | Posted: | | | | Quoting tweeter: Quote:
I think the bailout last week included a provision to bump the $100,000 to $250,000. Not that the FDIC automatically has any more in its coffers to support that.
I thought i heard on the radio this morning the Eu was going to require some minimum equivalent insurance. Supposedly a temporary increase, tweeter, but my interest was in explaining the concept. Whic, BTW, FDIC cover $5 Trillion in deposits, obviously they have nowhere near that amount of money, if they did Congress would not be able to resist writing IOUs. Skip | | | ASSUME NOTHING!!!!!!
CBE, MBE, MoA and proud of it.
Outta here
Billy Video |
| | Registered: March 13, 2007 | | Reputation: | | Posts: 6,635 |
| | Posted: | | | | Quoting skipnet50: Quote:
Quoting tweeter:
Quote:
I think the bailout last week included a provision to bump the $100,000 to $250,000. Not that the FDIC automatically has any more in its coffers to support that.
I thought i heard on the radio this morning the Eu was going to require some minimum equivalent insurance. Supposedly a temporary increase, tweeter, but my interest was in explaining the concept. Whic, BTW, FDIC cover $5 Trillion in deposits, obviously they have nowhere near that amount of money, if they did Congress would not be able to resist writing IOUs.
Skip $45 billion, or less than 1% of actual deposits | | | | Hal |
| | Registered: March 13, 2007 | | Reputation: | | Posts: 2,394 |
| | Posted: | | | | Raising the amount insured by FDIC to $250,000 SHOULD have the effect of stopping people from withdrawing money they now have in the banks over $250,000. The banks really get into trouble and fail when depositers start lining up to take their money out because they fear they'll lose it. I remember long lines outside a particular Savings & Loan here in Maryland with people trying to get their money out. This was a bank NOT insured by FDIC but by a quasi-State entity. Because this S&L had a Mayland State seal on the door, people mistakenly believed their saving were as secure as those in FDIC-insured banks. A lot of people lost their life savings and were only partially remunerated afterward.
The temporary increase to $250,000 should give things enough time to settle down and let the banking industry get back to some semblance of health which they could not do if they were facing hordes of panic-stricken depositors wanting their money. | | | Another Ken (not Ken Cole)
Badges? We ain't got no badges. We don't need no badges. I don't have to show you any stinking badges.
DVD Profiler user since June 15, 2001 |
| | Registered: March 13, 2007 | | Posts: 21,610 |
| | Posted: | | | | 8598 Dow Don't even ask what this has cost me. Skip | | | ASSUME NOTHING!!!!!!
CBE, MBE, MoA and proud of it.
Outta here
Billy Video |
| | Registered: March 14, 2007 | | Posts: 489 |
| | Posted: | | | | Well there is some "good" news in all this financial trouble. Some scientists are saying that with the troubles people are driving less, and with businesses cutting down on operating hours or even closing Global Warming is slowing down. Leave it to scientists to find good news in peoples suffering! So remember to save the earth go broke, and lose your job/house/savings!  Bobb, who in the game of life always ends up in the Poor House anyway. | | | | Do Cheshire Cats drink evaporated milk? |
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Invelos Forums->General: General Discussion |
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