Home › Forums › Financial Markets/Economics › Another crash in 2012? Any thoughts?
- This topic has 91 replies, 20 voices, and was last updated 11 years, 4 months ago by
paramount.
-
AuthorPosts
-
January 12, 2012 at 1:13 PM #735752January 12, 2012 at 1:51 PM #735754
Anonymous
Guest[quote=CA renter]If there are shortfalls, public employers **and employees** will have to make larger contributions to their retirement plans.[/quote]
Who do you think “public employers” are? They are taxpayers.
Every single dime of a public employee’s compensation ultimately comes from tax revenue.
Aside from the fact that you don’t understand the most basic aspect of where this money comes from, your assertion above is completely bogus.
Why do you think San Jose and Vallejo have massively cut back services?
In case you forgot:
http://piggington.com/california_or_bust_san_jose_in_crisis
Why didn’t these cities just take bigger contributions from employees instead of cutting services and declaring bankruptcy?
Because the unions (and their lawyers) wouldn’t let them.
January 12, 2012 at 2:19 PM #735755an
Participant[quote=sdrealtor]
I would gladly give up SS if I could self direct the money I contribute every year.[/quote]
I would gladly do it too, if I can keep my 15% I pay to SS.January 12, 2012 at 3:40 PM #735757CA renter
Participant[quote=pri_dk][quote=CA renter]If there are shortfalls, public employers **and employees** will have to make larger contributions to their retirement plans.[/quote]
Who do you think “public employers” are? They are taxpayers.
Every single dime of a public employee’s compensation ultimately comes from tax revenue.
Aside from the fact that you don’t understand the most basic aspect of where this money comes from, your assertion above is completely bogus.
Why do you think San Jose and Vallejo have massively cut back services?
In case you forgot:
http://piggington.com/california_or_bust_san_jose_in_crisis
Why didn’t these cities just take bigger contributions from employees instead of cutting services and declaring bankruptcy?
Because the unions (and their lawyers) wouldn’t let them.[/quote]
Wrong again.
Public workers are not employed by “taxpayers.” They are employed by elected and appointed government officials. Government services are paid for by tax receipts.
Do you expect these public employees to work for free? They are public employees, not nuns.
You keep claiming that I don’t understand how the system works, but it’s very clear that I have a much better understanding of it than you do. You don’t even know how the pension system works, yet you spout off about it on a regular basis. The benefits paid to public retirees are NOT paid directly by taxpayers; the vast majority of that money comes from investment income, not tax receipts.
Yes, public employees can be required to pay more, but it is done through negotiations; it is not driven by misinformed public hysteria and propaganda. Public pay and benefits are not the only expense incurred by public employers, though it is a majority. How these public agencies tax, how they handle thier finances, their vulerability to certin economic conditions, and other draws on their funding can also cause a city to experience financial difficulties. It’s just the fad right now to blame everything on public employees.
Do some research for a change and find out who’s behind the attacks on public unions. They are not taxpayer advocates.
January 12, 2012 at 4:20 PM #735761sdrealtor
Participant[quote=CA renter][quote=sdrealtor][quote=CA renter][quote=sdrealtor]Ummm…SS is essntially an entitlement program. Last time I checked the max benefits were around 20K per year and to get that you as an individual fund much more than that to support those on the lower end of the wage scale. I dont see people collecting better than 60% of pre-retirement income on SS. I dont see deep 4 figure monthly checks coming out of SS either. Apples and oranges.[/quote]
That’s because SS is an **entitlement/insurance program** vs. deferred **compensation** that was earned.
Not only that, but public employees (especially the public employees who get the “generous” benefits everyone likes to whine about) and their employers contribute **far more** to their retirement plans than SS recipients and their employers do.[/quote]
I contribute about 15% of my gross income. What do public employees contribute. The problem with their “employers” contributing far more than SS recipients is exactly the problem. We the taxpayers are their employers so not only do we pay for our retirements via Social Security but we pay for theirs too via taxes.[/quote]
Public employees and employers contribute far more than 15%.
Again, even the “employer” portion of the contribution is considered a part of their total compensation package, and the pay/benefits of public employees are looked at as a whole during negotiations. Public employees give up certain pay/benefits in exchange for other pay/benefits. The truth is that the entire contribution amount is 100% paid for by the employees as it is ALL considered together as part of their compensation package.[/quote]
I asked what the employee pays not what the employer pays. I have seen tax returns from several public employees and was appalled what they were paid. If you add what the “employers” paid to these compensation figures and show me the numbers I would probably get even sicker. I dont have the stomach to see those numbers.
FYI, tomorrow I am picking up tax returns from another public servant I am doing a short sale for. I hope I can stomach them.
January 12, 2012 at 9:11 PM #735765ParticipantAlready answered it here:
Again, even the “employer” portion of the contribution is considered a part of their total compensation package, and the pay/benefits of public employees are looked at as a whole during negotiations. Public employees give up certain pay/benefits in exchange for other pay/benefits. The truth is that the entire contribution amount is 100% paid for by the employees as it is ALL considered together as part of their compensation package.
January 12, 2012 at 9:34 PM #735766paramount
ParticipantWe can argue about all of this and never get anywhere – let’s put the question of public employee pay and benefits where it belongs: in the hands of voters.
Actually, that might not be a good idea; with so many directly dependent on the government in California either as employees or on welfare it’s not likely to pass.
January 12, 2012 at 9:39 PM #735767Participant[quote=CA renter]
Do some research for a change and find out who’s behind the attacks on public unions. They are not taxpayer advocates.[/quote]
I got the Following from Howard Jarvis:
It is galling for private sector workers to see so many public sector workers thriving because of the power their unions exercise. Take California. Investigative journalist Steve Malanga point out in the City Journal that California’s schoolteachers are the nation’s highest paid; its prison guards can make six-figure salaries; many state workers retire at 55 with pensions that are higher than the base pay they got most of their working lives. All this when California endures an unemployment rate steeper than the nation’s. It will get worse. There’s an exodus of firms that want to escape California’s high taxes, stifling regulations, and recurring budget crises. When Cisco’s CEO, John Chambers, says he will not build any more facilities in California, you know the state is in trouble.
January 12, 2012 at 9:42 PM #735768Participant[quote=CA renter]It’s just the fad right now to blame everything on public employees.
[/quote]
No, it’s not a fad, it’s an awakening:
While the rest of us (private sector workers) have been struggling to keep our jobs and pay our bills through this recession(yes… your wages are most of our taxes), you have been sitting at your desk, feet ontop, fat & happpy, not a care in the world.
Every morning you drive to work and sit at your desk and serf the web for the first 3 hours. You day dream about that nice little pension your going to get after just 15 years, which will be 2 or 3 times your salary. You drool with complacity as you enjoy the 100% stated funded healthcare benefits, the nice little income tax breaks you get on your house, and just laugh. Silly private sector workers.
There is no level of accountability with your bunch either. Mediocrity is not penalized, everyone just turns their head the other way. If you stink at your job or are just plain lazy, no one worries, the Union thugs & Democratic politicians protect you.
Whenever people oppose your lavish benefits, you all get together and accuse them of being racist, xenophobic, wealthy, Republican, etc. with the hope that they go away. You group even goes so far as to threaten them with acts of intimidation, violence, vandalism, etc. “You think back to when you have broken car windows, thrown bricks through windows and eggs at houses of non Union members that have opposed your union.”
After leaving work at 3:30 in the afternoon while the rest of us are struggling to pay your HUGE salary & benefits, you see house after house in foreclusure, see businesses closing and people losing their livehoods.
But you don’t care. Your politicial buddies will surely raise TAXES AGAIN to pay for your cookies. You hold your head up high, flip all them desperate people the birdie and think about the green wad in your wallet. F” them you think.
2010 & 2012. REALITY CHECK! Your ridiculous cookie benefits and gravey train is about to END. We are bankrupt! We have no more money to give you! You can’t fool us with this tax the rich garbage anymore. Your Unions have forced tax rates so high that OUR private employers are fleeing the country to stay in business. We have lost almost everything BECAUSE OF YOU!!!
SAY NO TO UNIONS!!! SAY NO TO MORE TAXS INCREASES!!!! AND SAY NO TO SPOILED LOUD MOUTHED PUBLIC UNION WORKERS!!!!!
January 12, 2012 at 10:07 PM #735769Participant[quote=pri_dk][quote=CA renter]Firstly, I’m not talking about Rich. He had nothing to do with causing the financial crisis.[/quote]
But he profited from it (and many of us admire him for doing so, btw.)
[quote]there is no question that what many “investors” (including myself) do is completely unproductive and simply takes money from the more productive part of the economy.[/quote]
You believe that? Wow.
[quote]No, not *everyone* on Wall Street, but you’re naive to think that only .001% knew what was going on.[/quote]
So simply “knowing what was going on” is the crime? You mean like Rich (see above) and most of the other folks here?
[quote]Let’s start with those who absolutely knew what they were doing. Their actions are already well documented by multiple investigators and journalists.[/quote]
Can you name any names? Do you have any actual FACTS? Or just vague references to “investigators?”
And now that the “journalists” have found the bad guys for us, exactly what legal principle do we use to take all of their wealth? (as you have suggested as a solution.)[/quote]
As they say, timing is everything…
“Despite Golden West’s track record for double-digit earnings growth, Herb Sandler said he and Marion knew the company needed to diversify beyond home mortgages to remain successful in the future.
“You can go just so far with a one-product company,” he said during the conference call. He emphasized the sale shouldn’t be interpreted as sign that Golden West is worried about a real estate meltdown saddling the company with huge losses, labeling those theories as “a bunch of garbage.”
The Sandlers are in line for a $2.6 billion windfall, based on their 10.24 percent stake in Golden West, according to documents filed with the Securities and Exchange Commission. In an interview, Herb said the couple plans to give all their money away through a foundation that that they set up years ago.”
“Wachovia Corp. (WB), the nation’s fourth largest bank, is muscling into the West with a $25.5 billion deal to buy Golden West Financial Corp. (GWB), a mom-and-pop shop that blossomed into a prized savings and loan.
http://www.foxnews.com/story/0,2933,194632,00.html
……………….Wachovia’s closet full of skeletons
Wells Fargo acquired Wachovia in 2008 after the government forced the sale of the latter before it collapsed completely during the economic crisis.
…………………..
“Mozilo will not go to prison.
According to Los Angeles Times’ sources, Angelo Mozilo has been the subject of a secret federal criminal investigation since 2008, and the 3-year investigation has now been officially closed with no indictments.
First Ralph Cioffi and Matthew Tannin in the Bear Stearns case, then Cassano, now Agent Orange. Perps are walking free.”
http://dailybail.com/home/angelo-walks-feds-drop-criminal-probe-against-mozilo.html
“The perpetually suntanned founder of Countrywide Credit– Angelo Mozillo– made $521.5 million in compensation from 2000 until 2008. He also coined $140 million in gains from selling his Countrywide stock between November 2006 andOctober, 2007, at the very moment he was learning internally that his company was merchandising soon-to-collapse subprime mortgages– what he described as the most “toxic product” he’d ever seen. He called this expectation “a looming disaster” and the company’s “poison” according to internal emails. But, he told no-one on the outside, not his shareholders, not the regulators, not his board of directors– not even the politicians like Sen. Dodd for whom he had arranged sweetheart deals.
Strangely unfair, then, that Mozillo was able to settle with the SEC by paying only $22.5 million of his own personal money as a fine. The other $46 million plus Mozillo’s legal fees actually will be paid by Bank of America and insurance policies taken out by Countrywide.”
http://www.forbes.com/sites/robertlenzner/2010/10/16/why-isnt-angelo-mozillo-in-jail/
……………“So control fraud is when the person who controls a seemingly legitimate entity, uses it as a weapon to fraud. In the financial sphere, the weapon of choice is accounting. So here are the four ingredients of the recipe that produce a sure thing of record accounting income.
Grow like crazy
Make preposterously bad loans but at a premium yield.
Have extreme leverage. That means you have a ton on debt.
Put aside only ridiculously low allowances for future loan losses.
You do those four things, you are mathematically guaranteed to report record, albeit fictional, profits in the short term. You are also guaranteed with modern executive compensation, to make the Senior Executives wealthy, and you are guaranteed, because after all, if you think about those four ingredients, they are the perfect recipe as well for maximizing real losses. And that’s why the title of Akerlof and Romer’s article says it all, “Looting: The Economic Underworld of Bankruptcy for Profit.” The firm fails but the executives walk away rich. This is the same concept with my book “The Best Way to Rob a Bank Is to Own One.” It is these internal people who control the seemingly legitimate entity that can get away with financial murder. And here is the really bad news. I mean that is bad news right there, but the really bad news, is that this tends to happen as the FBI warned, and again in 2004, seven years ago. So the next time you hear some moron tell you that no one could have predicted this, it was predicted by the Premiere Law Enforcement entity in the world dealing with white-collar crime.”……………………
“The role played by the Treasury was again obscured, hidden in the $180 billion-plus bailout of AIG. Former CEO Maurice “Hank” Greenberg had used that insurance giant as the counterparty for credit default swaps and financial derivatives originated by Goldman and Lehman. Had Treasury Secretary Henry Paulson not backed the AIG bailout, Goldman would have suffered a $20 billion loss. As a former co-chairman of Goldman with a personal net worth exceeding $850 million, Paulson could not have been unmindful that Goldman’s bonus pool for 2007 was $20 billion.“
http://criminalstate.com/tag/lloyd-blankfein/
…………….25 People to Blame for the Financial Crisis
The good intentions, bad managers and greed behind the meltdownRead more: http://www.time.com/time/specials/packages/article/0,28804,1877351_1877350_1877326,00.html #ixzz1jJbz1ZXq
——————–
This is just scratching the surface. I also think that regulators and politicians who got in the way of investigations during and after the bubble need to be investigated, and if found guilty, forfeit their assets and spend time in jail.
Oddly enough, the people most likely to go to jail for bubble-related crimes are guys like this:
“On Valentine’s Day, the elder Mr. Engle said, his son had entered a minimum-security prison in Beaver, W.Va., to begin serving a 21-month sentence for mortgage fraud. He then proceeded to tell me the tale of how federal agents nabbed his son — a tale he backed up with reams of documents and records that suggest, if nothing else, that when the federal government is truly motivated, there is no mountain it won’t move to prosecute someone it wants to nail. And it was definitely motivated to nail Charlie Engle.”
January 12, 2012 at 10:49 PM #735770bearishgurl
Participant[quote=CA renter]Wrong again . . . [/quote]
CAR, can you hear the trees rustle? I think we’re whistling in the wind here, as usual. As I’ve stated here a few times before, the average Joe6P Pigg is clueless as to how much a typical public employee has taken out of his gross pay in retirement contributions, which may also be deducted in combination with FICA tax!
I’ll use local agencies which I’m most familiar with for examples here and divide them by “Class C” groups (safety-worker units who are NOT eligible for SS) and “General” groups (incl all other public bargaining units, unclassified and unrepresented groups) who ARE eligible for SS. Bear in mind that the “General” groups have BOTH a retirement contribution PLUS FICA tax taken from their biweekly pay. Safety groups have only the 1.45% Medicare Tax portion (abt 19% of FICA tax) PLUS their retirement contribution taken from their biweekly pay.
Safety (“Class C”) Groups:
https://www.sdcers.org/benefits/active/city/fire/Documents/Fire_Safety_Contributions_7_10_10.pdf
https://www.sdcers.org/Contribution%20Rates/UPD%20Safety%20Member%20contribution%20rate%20FINAL.pdf
http://www.sdcera.org/PDF/safetyA_contribution_rates_comparison.pdf
Local public Safety workers’ retirement contributions range from 7.35% to 17.57%, depending on age of entry and agency employed by.
https://www.sdcers.org/Contribution%20Rates/Airport%20Authority%20General%20Contribution%20Rates.pdf
http://www.sdcera.org/PDF/generalA_contribution_rates_comparison.pdf
Note: About 95% of current SDCERA workers are in “Tier A”.
Local public General workers’ contributions range from 5.52% to 14.88%, depending on age of entry and agency employed by.
According to these tables, the average local “safety” public employee has approx 14.04% taken from their biweekly gross pay (up to $106,800) for “retirement” contributions and the average “general” public employee has 10.4% taken from their biweekly pay PLUS FICA (on a usually smaller salary than safety workers). (Remember that unclassified “Mgmt” employees have a FICA cap at $106,800 annually.)
Note: These figures do not reflect any (minuscule) “retirement offsets” paid for by the employer which had to be negotiated at the bargaining table (not very likely in recent years).
[quote=sdrealtor] I asked what the employee pays not what the employer pays…[/quote]
As a “non-safety employee,” let’s use public servant “Kenneth R. Justice” (age 49) for an example here, shall we? His classification is Court Clerk III and he has 23 years in service. He’s been stationed in the Honorable Dia Bolical McGruff ‘s courtroom for the last 7.5 years.
Base biweekly pay: $2,378.04
Retirement contribution: -350.05
Current FICA deduction (incl Medicare): -134.36 ($181.92 as of 3/1/12)Balance (from which state taxes and benefits get deducted): $1,893.63
[quote=sdrealtor] . . . I would gladly give up SS if I could self direct the money I contribute every year.[/quote]
sdr, may I suggest you now pick up (your ubiquitous) glass here, to sample – – go ahead … it’s a “small” 750 ml bottle:https://www.mcnabridge.com/xe/xe.asp?page=viewcat&cat=mcnab-ridge-reserve
to assist in your simultaneous “pondering” of the following:
The 7.65% FICA tax paid by both employer and employee includes the 1.45% Medicare Tax (6.2% to SS and 1.45% to Medicare). Both portions total 15.3%. In all of 2011 and the first two months of 2012, both the employer and employee contribution is only 4.2% for SS, result in a total 5.65% contribution including Medicare Tax. For instance, YOU, who claims to be “self-employed” would pay FICA only on your NET “profits” shown on your Schedule “C” of your Form 1040 AFTER you take all your numerous deductions from the “income” shown on your annual 1099 your rec’d from your broker (presumably office expense, room at your residence, cell phone, auto and gas expense, Board fees, MLS fees, licensing fees, continuing ed, etc, etc).
Don’t you have an “MBA” (to help you figure all this out)?? ;=D
[quote=AN] I would gladly do it too, if I can keep my 15% I pay to SS.[/quote]AN, an “employee” (such as yourself) pays 5.65% (in Jan 2011 thru Feb 2012) or 7.65% of your GROSS pay towards FICA. Go figure . . .
FICA contributions currently cap at an annual gross W-2 pay (or self-employed net “profit”) of $106,800 making the current maximum Social Security contribution $6,621.60. The current annual SS cap was lower in previous years.
FICA Limits 2012 — Likely To Return to 2010 Limits
2011 saw temporary tax cuts for employees; there was a 2% reduction of FICA taxes for all employees. Typically, FICA taxes are collected on 7.65% of earnings. Prior to 2011, the rate has been 7.65% since the 1990s, but with the tax break, the 2011 FICA tax rate for employees was reduced from 7.65% to 5.65%.
The FICA tax rate was reduced temporarily for employees by 2% for the year of 2011 and the reduced rate is scheduled to end March 1, 2012.
2010 FICA Tax Rates and Social Security Limits
In 2010, as already mentioned, the FICA tax rate was a total of 7.65% of the worker’s gross income. 6.2% of this went to Social Security and 1.45% went to MedicareThe Social Security tax could be collected on up to $106,800 of income making the maximum Social Security contribution $6,621.60. .FICA Limits 2011
In 2011, the 2% tax break came from the portion of the tax that contributes to Social Security. This reduced the Social Security rate for employees only from 6.2% to 4.2%. The amount of taxable income remained at $106,800 so the maximum employee contribution was reduced from $6,621.60 to $4485.60.FICA Limits 2012
The FICA tax rate was reduced temporarily for employees by 2% for the year of 2011 and the reduced rate is scheduled to end March 1, 2012. After that, the FICA limits for 2012 are expected to return to 7.65% of gross income, the same as they were in 2010.Application of FICA Limits 2012
Fred is an employee at your company. His gross income is $75,000. What does the 2011 tax break and the likely return to 2010 rate mean to him? At the 5.65% rate, Fred payed $4327.50 in FICA taxes for the 2011 year. In 2012, if the rate returns to 7.65%, he will pay $5737.50. This means he will see a roughly $120 a month decrease in his take home pay.(emphasis added)
See: http://401k-employee-benefits.com/3396-fica-limits-2012
Got a calculator handy?? If not, pull out your pocket protector and toss it!! It’s of no use . . .
And while you’re sipping (and noticing the pronounced blackberry notes of “MR Reserve 2006 Cabernet”), do an exercise comparing the “private sector” employees’ SS contributions to public employee contributions towards their much-maligned “defined benefit plan.” ; = >
And . . . no need to “rush.” How’s about you take two Exedrin and get back to us tomorrow morning with your “findings,” ‘kay??
The Piggs will be waiting with baited breath . . .
[quote=sdrealtor]…FYI, tomorrow I am picking up tax returns from another public servant I am doing a short sale for. I hope I can stomach them.[/quote]
Why . . . does this mean you have lost all respect for your next “squat-SS `victim’”?? Or perhaps you believe that they have a “questionable” hardship story? Which is it . . . exactly???
pri_dk and paramount . . . again, I implore you both to APPLY forthwith in effort to board this “gravy train:”
http://www.sdcourt.ca.gov/portal/page?_pageid=55,1058395&_dad=portal&_schema=PORTAL#currlistings
http://agency.governmentjobs.com/sdcounty/default.cfm
http://agency.governmentjobs.com/sandiego/default.cfm
. . . but I must warn you that you will NOT be able to post to blogs while on duty. Your every move will be WATCHED by the powers-that-be . . . :={
January 12, 2012 at 10:56 PM #735772GuestThe précis:
[quote=CA renter]Public workers are not employed by “taxpayers.”[/quote]
“I take your money but I am in no way accountable to you.”
And you wonder why there is so much resentment against the public sector these days…
January 12, 2012 at 11:04 PM #735773Guestbg,
Here’s a friendly little tip:
Nobody actually reads your posts anymore, especially after that thread.
You know, that thread.
We skim what you wrote, say “WTF?” to ourselves, and move on.
I regret being the messenger, but I feel like it would be kinda mean not to tell you.
January 12, 2012 at 11:08 PM #735774Participant[quote=bearishgurl]AN, an “employee” (such as yourself) pays 5.65% (in Jan 2011 thru Feb 2012) or 7.65% of your GROSS pay towards FICA.[/quote]
Thanks for pointing that out. A mistake in numbers in my part. Still wouldn’t change my answer though. With SS projected to be insolvent by 2017: http://www.cbsnews.com/stories/2011/08/22/politics/main20095431.shtml, I’m not counting on any SS $. That’s only 6 years after the first boomer start to retire. So, let me reiterate, hell yes I’d glad give up SS if I can stop paying taxes for it and get my SS taxes that I paid back.January 12, 2012 at 11:35 PM #735775Participant[quote=pri_dk]bg,
Here’s a friendly little tip:
Nobody actually reads your posts anymore, especially after that thread.
You know, that thread.
We skim what you wrote, say “WTF?” to ourselves, and move on.
I regret being the messenger, but I feel like it would be kinda mean not to tell you.[/quote]
When did the Piggs elect you as their spokesperson?
Once again, when somebody presents facts that you don’t like, you counter with…another personal attack.
Good to know you’re such a well-informed genius. Really, it comes through loud and clear.
-
AuthorPosts
- You must be logged in to reply to this topic.