say hello to the big R
if you guys for once switched out of malaysian tv1 and tv3 channel, which kept on boasting about how US was immitating malaysia on ways to tackle the economic downturn, you'd realized how bad a shape the world economy is now.
when i said 'world' here, i meant the US and singapore.
the first thing i saw after i came back to civilization from hari raya holiday, was this great big headline in yahoo main page, 'it's official: singapore is now in recession'. and today it got more interesting. the line goes, 'jobs cut likely to start in december'.
aren't those make your heart skip a beat? i guess santa clause would be busy distributing job vacancy pamplets instead on the eve night this year.
my company has not been doing great for quite some time, just like a long lingering cancerous growth, all blamed on the world market price. last year i bought an 8G thumb drive for 80 dollars. early this year it was sold for 45 dollars during Comex 2008. recently my friend purchased one for only 30 dollars plus. by christmas this year i expect we have to actually pay people to buy our products. market price is free falling. how are we going to make profit? it's a matter of time before it drops six feet under and we have to start chanting lament.
to cool down some hot asses, the management clarified yesterday that there won't be any lay-offs for us. which is great, but before we went out of the room popping party balloons, they added that they do consider implementing pay-cut measures though.
excuse me, but pay cut? that's like end of the world too, right? how on earth am i going to pay for my house, my car, oversea trips, country clubs, butlers, designer clothes, jewellery, personal jets etc etc?
plus, now that US is into this bad recession, i guess i can say goodbye to my plan of making it big to the dreamland. now suddenly everything went quiet, as though a disconnected phone call when you go through a tunnel. it's understandable, because when the water level is already up to your nose, you won't think of anything else but your own survival.
one thing for sure. i must resort to being frugal from now on. if i have to, i must take drastic measures ala becky bloomwood in the shopaholic series. for example, my car is really dirty now in the parking lot below, but the new me won't send it to drive-through car wash. i must wash it myself instead. or if i'm too lazy, just leave it dirty. people say you shouldn't judge a book by its cover, so people should not judge me by seeing my dirty car exterior.
in the meantime, let's just hope for the best. what else can we do? it's not like we can influence the way the world economy is run anyway. i mean, i can stay late working my ass off but the company is still going to lose money anyway.
i wonder whose fault that the world economy is going haywire like this? sometimes i think, now that all company make losses and everybody is like losing billions of dollars, where does the lost money go to? stock investors? surely someone somewhere is doing the joker laugh now while having money shower.
*bastard.
...adie
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Stocks crash but where does money you lost go?
By ERIC CARVIN,Associated Press Writer AP - Sunday, October 12NEW YORK - Trillions in stock market value _ gone. Trillions in retirement savings _ gone. A huge chunk of the money you paid for your house, the money you're saving for college, the money your boss needs to make payroll _ gone, gone, gone.
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Whether you're a stock broker or Joe Six-pack, if you have a 401(k), a mutual fund or a college savings plan, tumbling stock markets and sagging home prices mean you've lost a whole lot of the money that was right there on your account statements just a few months ago.
But if you no longer have that money, who does? The fat cats on Wall Street? Some oil baron in Saudi Arabia? The government of China?
Or is it just _ gone?
If you're looking to track down your missing money _ figure out who has it now, maybe ask to have it back _ you might be disappointed to learn that is was never really money in the first place.
Robert Shiller, an economist at Yale, puts it bluntly: The notion that you lose a pile of money whenever the stock market tanks is a "fallacy." He says the price of a stock has never been the same thing as money _ it's simply the "best guess" of what the stock is worth.
"It's in people's minds," Shiller explains. "We're just recording a measure of what people think the stock market is worth. What the people who are willing to trade today _ who are very, very few people _ are actually trading at. So we're just extrapolating that and thinking, well, maybe that's what everyone thinks it's worth."
Shiller uses the example of an appraiser who values a house at $350,000, a week after saying it was worth $400,000.
"In a sense, $50,000 just disappeared when he said that," he said. "But it's all in the mind."
Though something, of course, is disappearing as markets and real estate values tumble. Even if a share of stock you own isn't a wad of bills in your wallet, even if the value of your home isn't something you can redeem at will, surely you can lose potential money _ that is, the money that would be yours to spend if you sold your house or emptied out your mutual funds right now.
And if you're a few months away from retirement, or hoping to sell your house and buy a smaller one to help pay for your kid's college tuition, this "potential money" is something you're counting on to get by. For people who need cash and need it now, this is as real as money gets, whether or not it meets the technical definition of the word.
Still, you run into trouble when you think of that potential money as being the same thing as the cash in your purse or your checking account.
"That's a big mistake," says Dale Jorgenson, an economics professor at Harvard.
There's a key distinction here: While the money in your pocket is unlikely to just vanish into thin air, the money you could have had, if only you'd sold your house or drained your stock-heavy mutual funds a year ago, most certainly can.
"You can't enjoy the benefits of your 401(k) if it's disappeared," Jorgenson explains. "If you had it all in financial stocks and they've all gone down by 80 percent _ sorry! That is a permanent loss because those folks aren't coming back. We're gonna have a huge shrinkage in the financial sector."
There was a time when nobody had to wonder what happened to the money they used to have. Until paper money was developed in China around the ninth century, money was something solid that had actual value _ like a gold coin that was worth whatever that amount of gold was worth, according to Douglas Mudd, curator of the American Numismatic Association's Money Museum in Denver.
Back then, if the money you once had was suddenly gone, there was a simple reason _ you spent it, someone stole it, you dropped it in a field somewhere, or maybe a tornado or some other disaster struck wherever you last put it down.
But these days, a lot of things that have monetary value can't be held in your hand.
If you choose, you can pour most of your money into stocks and track their value in real time on a computer screen, confident that you'll get good money for them when you decide to sell. And you won't be alone _ staring at millions of computer screens are other investors who share your confidence that the value of their portfolios will hold up.
But that collective confidence, Jorgenson says, is gone. And when confidence is drained out of a financial system, a lot of investors will decide to sell at any price, and a big chunk of that money you thought your investments were worth simply goes away.
If you once thought your investment portfolio was as good as a suitcase full of twenties, you might suddenly suspect that it's not.
In the process, of course, you're losing wealth. But does that mean someone else must be gaining it? Does the world have some fixed amount of wealth that shifts between people, nations and institutions with the ebb and flow of the economy?
Jorgenson says no _ the amount of wealth in the world "simply decreases in a situation like this." And he cautions against assuming that your investment losses mean a gain for someone else _ like wealthy stock speculators who try to make money by betting that the market will drop.
"Those folks in general have been losing their shirts at a prodigious rate," he said. "They took a big risk and now they're suffering from the consequences."
"Of course, they had a great life, as long as it lasted."
Good insight. YES, money IS afterall just a piece of paper...we should revert back to the old days, and starts collecting gold instead. hehe...go bling2!
bottom line, don't dabble in stocks.
well, lets just do what we can. being prudence is one good way to start. build up on savings until we've enough to fall back to( at least for a few moths) if, and I really mean, IF sth bad happens to the company.
ed,
err, why don't you start with cutting back on your 'chemical' supplies? ;-)
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