Economic Downturn Has Finally Arrived!!

[gja1000]

The state of the economy is very very frightening. I'm so worried! My husband and I experienced a sudden loss of job 4 1/2 years ago, when he woke up in heart failure and then ever was able to work again. It was so sudden and unexpected - we were not prepared. It was so scary but we made it through. He was about to get his social security disability and medical retirement, but it is just a fraction of his previous salary - but at least we have it.

I have a good job and I am tenured at my University so that is wonderful. But much of my retirement is gone. I don't have a pension - only my 401K and you all know what that looks like. I don't have any plans to retire anytime soon - now it looks like I may have to work till I'm 85 - I'll be that crotchety old professor hobbling around with a cane!

We have learned to live much leaner since my husband's illness. We just got word today, that his co-pay on his medications will go up from $35 for name brands to $65. That's almost a 100% increase, don't seem fair. On the other hand we used to pay $10 for generics and now the first 3 generic prescriptions will be free - big whoop (a whole $30 savings) - and then $10 each! I guess it is something though. Problem is that he takes 13 prescription meds!!! This is going to hurt the pocketbook. Some of them are generic - but some do not have a generic alternative.

I also worry about our kids. SIL is district manager for a concrete company - their business is way down. I don't worry about him losing his job so much as I worry that they will close some of the plants and he'll have to move. The company is strong and I think they can survive slow business, but I fear they might have to relocate - there are worse things though. He certainly will not get the big bonus this winter that he is used to.

My daughter does not work (she has a two year old) - but she could if she needed to. She is an elementary school teacher.

I worry so much about the needy. For example, I work with an adult day care center that cares for the elderly who can't stay home alone during the day. They depend on donations and funds to make ends meet. Medicaid pays for adult day care but not enough per day to cover the costs. If people are not able to donate, I don't know what will happen. Same with organizations like the food bank. If people can't afford to donate, then they won't have enough food to help the needy!

It is not a pretty time right now. I don't know when it will get better.

[Gina]

Things will get worse before they get better. So sad we all have to watch our spending. My son graduates with a BA in Business fiance this Spring.. but there are no jobs on Wall Street. I don't know what he is going to. His medical coverage which my husband company pays will cease once he is through with college.

I pray that this country will rebound quickly but the future seems bleak.

[Marilyn]

The messy bailout news doesn't help. I can't believe these banks are getting our taxpayer money and not letting people refinance. Instead, they are hoarding the funds and paying their executives bonus'. It's time for us to step up and tell our congressmen and women that we just WON'T TAKE IT ANYMORE!!!! Maybe if we do it now before times get really desperate, something will be done. There just has to be more oversight in Washington. They can't just give our hard earned money to these GREEDY people.

[gja1000]

Marilyn, we just got a call from a pipeline company that they will be building a pipeline across our farm to connect to a gas well. I know that natural gas prices are way down, so I was surprised to hear they were building a new pipeline.

[HALEY]

Bailout execs get bonus billions

Despite the worst financial crisis since the Great Depression, Wall Street firms expect to pay billions in executive bonuses after being shored up with billions in taxpayer dollars.

Merrill Lynch & Co. lost money for five straight quarters and its stock dropped 70 percent this year. Yet, it set aside about $6.7 billion to pay bonuses this year, according to a Bloomberg analysis.

"I think it's sickening when I hear these stories," Democratic Rep. Jason Altmire of McCandless said Wednesday. "The Wall Street firms are tone deaf. They don't understand the American people are outraged at this type of behavior."

Many banks paying bonuses are receiving billions in capital from the Treasury department as part of the government's $700 billion financial rescue plan. The Troubled Asset Relief Program, known as TARP, was announced in September.

Stock brokerage giant Merrill Lynch is receiving $10 billion from the government. The struggling institution is merging into Bank of America.

Bank of America, which is getting $15 billion from TARP, is offering bonuses equaling up to 100 percent of revenue Merrill's brokers generate, in order to retain them, said Bloomberg.

"The public is angry about this, and they should be," said Joan Claybrook, president of Public Citizen, a consumer advocacy organization in Washington.

"(Wall Street executives) are the ones who caused this economic crisis, and they are the ones who should be asked to sacrifice," said Claybrook.

National City Corp. is not receiving government money -- but tried to. The struggling Cleveland-based bank applied to the Treasury for money but was told Oct. 19 it would not receive any, according to a recent Securities and Exchange Commission filing.

Five days later, National City agreed to merge into PNC Financial Services Group in a $5.6 billion deal. PNC, in turn, will get $7.7 billion -- more than enough to cover the acquisition -- from the Treasury in exchange for preferred stock.

National City spokeswoman Kristen Baird Adams declined to discuss the issue yesterday, saying it was "inappropriate for us to comment for your story on bonuses, given our pending merger with PNC."

PNC spokesman Fred Solomon said: "PNC will comply with the rules governing TARP participants, and the (board's) compensation committee shortly will start the annual process of carefully considering compensation decisions."

The Wall Street bailout passed by Congress states the five highest-paid executives cannot receive rich severance packages known as "golden parachutes," but it doesn't address bonuses. Altmire said he voted against the bailout for that reason.
"Wall Street firms will say the money isn't from the bailout," said Altmire. "But there is no separate pot of money. You have all the money in your budget, and you decide what to do with it."

Said Claybrook: "The deal was the $700 billion bailout would provide money to banks to increase their liquidity to extend credit to businesses and the public.

"The public's irritation with this is we're going into debt as a nation to try to save the economy, and then these banks are using the money to pay bonuses to executives," she said. "The cost is equal to about $3,000 to $4,000 per citizen, yet many are losing their homes. It's morally and economically wrong."

Fifth Third Bancorp, which operates 13 branches in the Pittsburgh region, is another TARP recipient -- $3.45 billion. The Cincinnati bank's stock fell 63 percent this year.

"At this particular point in time, we do not have a decision with respect to executive bonuses. That's a decision that will be made in January 2009," said bank spokesman Debra DeCourcy.

Bank of New York Mellon Corp. is receiving $3 billion from the government in exchange for preferred shares in the New York-based institution. It was among the nine major institutions chosen by the Treasury to jump-start TARP.

"We are not using the $3 billion from the capital infusion to pay bonuses or dividends," said BNY Mellon spokesman Ron Gruendl. The bank hasn't determined executive bonuses for 2008, he said.

Spokesmen for Citizens Financial Group could not be reached for comment.

[gja1000]

I was talking with someone who had heard an interesting idea about the bailout situation. When a business goes to the Government for bailout money, the stipulation is that they get the money, ONLY if the CEO's who allowed the company to get in trouble are fired.

Hmmm..... wonder how many would be clammering for a handout then???

[DianaB]

Originally Posted by gja1000

I was talking with someone who had heard an interesting idea about the bailout situation. When a business goes to the Government for bailout money, the stipulation is that they get the money, ONLY if the CEO's who allowed the company to get in trouble are fired.

Hmmm..... wonder how many would be clammering for a handout then???

Personally, I like that idea, Gayle!

I can't believe that with everything that's been going on that the banks would make sure that they got their bonuses!!! That makes me hopping MAD!!!!