Saturday, January 29, 2011

USA - A Step Closer to Bankruptcy ?

Alarming! You Bet, IT IS.  John Doe lives on a $50000 a year salary and have normal expenses like everybody else.  He also has atleast 2 credit cards like everybody else with $10000 total limit (which he earned by having good credit history for last 10 years) on them.  Now, he gets 2 more credit cards for another $10000.  Life is good.  John goes on a spending spree over few years and maxed out all of his credit cards but he is still trying to pay them off like a good "American" Citizen.  All of a sudden he gets problems at work and finds himself out of job.  Started raining, I guess.  And to make things worse his rent went up, the gasoline went up and prices of groceries went up....adding insult to injury he missed one credit card payment and his interest rate went up....okay okay...long story short.  Someone knocking on the door? Bankruptcy.  Yes, It is Inevitable.  Simple as that. 

I am sure you've heard this story before, this is what our entire nation has been going through over last many decades.  It has trapped many innocent people willingly or unwillingly into it.  Now, we are all part of this death spiral.  Personal Debt. is a problem in itself.  But Guess, what our great country is not doing anything different.  There is a fundamental problem in here.  I've pointed out before in my older posts about the massive debt and the debt to income rations we are facing, I came across another good reads on the same subject, only this time it's not "good" its "WORSE".

Bill Gross, who is the manager of the world's largest mutual fund, Pimco Total Return Fund hints that we could be a step closer to one of the biggest financial disasters this world has ever seen.  Our country is primarily funded by these Treasury/Bonds investors like Bill Gross and countries like China, Japan etc.  US Treasury sells these Bonds to Bonds Investors in return for a "GUARANTEED" payment plus any interest.  USA has been selling these bonds in international auctions every month and now our total debt has come pretty close to it's limits, $14.3 Trillion.  There is a debate ongoing in the Congress whether to raise these limits or not.  We are at a crossroads with this.  If this limit is raised that means more debt which the bond investors think the USA will never be able to pay.  If the interest payments go up so will be the ability for us to sell more debt, hence the interest rates may go up, dollar may collapse and the dominoes may start falling when one after another the bond investors start pulling their money out of USA.  Eventually the world Credit markets would come to a halt.  A major disaster.  I think this would dwarf any financial disasters we have faced so far.  I am sure the USA (Treasuries, Feds, Congress and everyone else in govt.) has some tricks still left up their sleeves which they can use to "delay" the process.  But unless and until our debt to income ratios don't get better the problems are inevitable.  Now let's see how can USA reduce the debt.  One thing I read was stopping Social Security Payments to Americans rather than missing their interest payment to China. Neither of these two are good.  The question is not "IF" but "WHEN" will this happen!  I hope it doesn't for the good of millions of people.

Friday, January 28, 2011

Whining is for Sissies. Meet A Real Hero - Rick Ball

People whine.  Period.  Whether you agree with me or not but I can "almost" guarantee you that you did in last 24 hours, atleast once...Be Honest.  I know, I do, (didn't in last 24 hours) every once in a while, I do.  I always find something to whine's not that difficult at all. :)  Because this world and life is full of challenging variables and difficult surprises and we "normal people" don't like difficult things in our everyday life, it's beyond our comfort zone. We need to do a lot of juggling to maintain order and not everyone knows how to juggle, let alone try to be an expert in it.  So, my point is, Everybody (I mean every living organism on this planet) faces problems and challenges, every single day in their lives.  Some choose to ignore them, some choose to close their eyes, some choose to see the other way, some choose to walk the other way, some choose to hop over the problems, some choose to bring somebody else in front of them and their real problem and they think these problems would magically disappear but do they?  May be for a short while for some but in the end these problems multiply and come back even harder than ever before in their lives.....and there are a small percentage who are MAN enough to stay Bold with their Rock solid intentions and determination to face any problem in their lives.  These are the ones who survive life's most painfull tests.  These are real Heroes. Rick Ball  is one of them.  I came across this very inspirational short video that I couldn't resist sharing....This is mainly to motivate myself for everything I don't do that I need to do and keep my on the ground and appreciate what I have.

Rick is from Canada and who is 44 now, lost his leg about 24 years ago in a motorcycle accident and was tore apart by this.  One day his brother took him to the hospital and he saw that "other people are facing even tougher challenges than him missing one leg"  This experience pushed him to change his attitude and move on or be miserable the rest of his life.  He decided to move on with a positive attitude and broke several World Records in running.  It's a very touching and motivating video, please see it and do something in your lives whenever you feel down. 


Tuesday, January 4, 2011

2010 - Consumer Bankruptcies at 9%

SAN FRANCISCO (MarketWatch) — Consumer bankruptcies rose 9% in 2010 and filings will keep climbing this year given high debt levels and tepid income growth, the American Bankruptcy Institute said Monday, citing data from the National Bankruptcy Research Center.
Ironic.  In the wake of almost 20% unemployment (U6) record federal debt almost $14 Trillion (with a "T", yes), largest foreclosure rate in the history and still growing, 9% Consumer Bankruptcies and expected to grow double digits, mortgage rates going up, falling real estate prices, rising commodity prices (inflation, think $4 gas this summer with no jobs, yeah! feels great)....and we are Partying at the WallStreet with a record climb at the indices from Aug 2010 lows to the 1/1/11 highs.  Most of the highs were made by pushing the "futures" in the overnight market but this is the topic of discussion for another post. :)  What I am thinking is, with 9% Consumer Bankruptcies and 20% U6, Can USA really sustain this kind of growth they are projecting?  3.5 to 4% GDP for 2011?  I've seen first hand how Credit Card offers have started pouring in from all over the country, (ME, I can understand lol) but to people with extremely sub-standard Credit histories, with no jobs and prior bankruptcies.   Come on guys, give me a break.  What are we trying to do and what the hell are we thinking?  December 2010, saw a record breaking holiday shopping season with these numbers.  My bet is come Jan/Feb 2011 and going forward a lot of these people with new hi-tech toys like IPAD, IPHONE, WII, KINECT and new cars, GMC, FORD etc. will have hard time paying their bills.  We are starting all over again at a time when we are not even out of the original mess.  Remember the fundamental problem we all are facing here as Consumers, Companies, Governments, Countries....We are spending the money WE DON'T HAVE based on future growth.  This is a disaster waiting to happen.  Bunch of "Fxxxxxx" Morons sitting in the high profile places, called FEDS who unfortunately has power to control our lives are doing everything in their power to make the Rich (GS)even more Richer and poor middle class people (US) even more poor.  How in the world are we going to get out of this?  We are "FxxxED".  God Save our Great Country.

Sunday, January 2, 2011

2011 Resolutions - Pointers

1-a) Spend Less Money and Save More
1-b) Save More Money or Make More Money, either way you are good.
2-a) Eat Less Calories and Burn More
2-b) Fit to Fitter, In Just 10-15 minutes a day.  300 reps of pushups, squats, dips and crunches.
3) Hate Less and Love More
4) Sleep Less and Work More
5-1) Work Hard and Play Harder
5-b) Work Hard and Smart (Be more efficient)
6) Spend Less time with your virtual friends on "Facebook" (Web). Spend More time with your REAL FAMILY (especially your Children) and FRIENDS.
7) Quit Tobacco and Eat more Spinach & Broccoli
8) Quit Alcohol and Drink more Water (at least 2 liter / day)
9) Quit the old nasty nagging habits and Learn something new, something fun, useful and productive.
10) Organize things, Organize your paper work, Organize will make life much easier.
11) Go Green, I mean Greener.  Reduce, Reuse and Recycle Everything (mostly) possible.  Save Mother Earth.
12) Learn to play at least one Song on Guitar (or your favorite musical instrument)
13) Read at least One Good Book and then read another and another.
14) Meditate

These are some of the pointers I've always had in my mind.  I already do or follow a lot of them and not do some of them.  For e.g. I don't Smoke, I don't consume Alcohol, I am a Vegetarian, I am not Obese etc. etc.  But there are a lot on this list that I need to work on and will be....In the mean time I will be putting on some details on the above list pretty soon.  If you've got some then please share your resolutions and experiences!

Happy 2011!