The totally off-topic thread

[amaroo]

If Greeks are not careful they will lose everything.

What utter stupidity to have a system where if you work in the public service for 35 years you are entitled to a EUR2,000 month pension tax free + a lump sum payment. Say you started working at age 17 that means you are a pensioner at age 52. And it does not stop there. You can then continue working paying very little tax and earning your pension. Total and utter stupidity.

The Greek people have plundered Greece. They are as much to blame as the politicians. One political promise after another to get re-elected. The money had to come from somewhere.

Indeed. One for the ages!

 

[PLANT]

Happy financial year....... Yippee

 

[RAM]

Your super fund wasn't plundered - you just made a poorly timed decision to buy shares when you did (apparently you don't read the papers and don't remember what has happened every few months for the past few years when Greece's payment to creditors is due and they can't pay it ........again. World markets have been reacting predictably (dipping) in unison with Greece's woes consistently so what is happening now was to be expected - with the only unknown being the size of the fall).

Of course, if you had "kept your powder dry" the present market would have been a great buying opportunity.

The consolation is that your share values will almost certainly recover before too long so provided you didn't panic sell (thereby materialising your losses) all you have to do is wait.

FWIW our market had sizable dips in Dec 13, Feb 14, Oct 14 and Dec 14. Each time it recovered quite quickly. The more abruptly the market falls, generally the quicker it recovers. Following the most recent sizable dip last December our market gained around 20% by the end of Feb.

Unfortunately if people hear something said often enough they come to believe it is true. There have been 20 yr periods when global share markets have gone nowhere point-to-point.

Stock market indices do not replicate the real world for the average investor.

The indices do not pay tax, have admin fees, bank fees etc.

Also the indices (every one of them) suffer (and profit from) survivorship bias - unfortunately that is something that any investor cannot profit from.

For example, once a company is identified as having a serious problem - they are removed from the index and replaced with a new 'healthy' company as a replacement.

Brief modern history lesson - what were some of the largest companies in early 1987?

Bond Media, Bond Corporation, Bell Group, Bell Resources, Ariadne, Qintex to name just a few. Every one of these was in the All Ords until they started to implode. Some leading into October 87 and others through the course of early 1988.

The front page of the AFR trumpeted "All Ords regains pre-crash peak" some time later. A colleague of mine pulled out the data of the pre-crash All Ords constituents BUT kept the failed stocks in it until they went to 100% loss and were delisted.

On that basis, even after adding in the replacement companies which coincidentally performed quite well - it was another 4 years before the All Ords actually regained the lost capital from the ten largest failures around 1987.

Over that entire period, and starting from different calendar quarters beginning Dec 86, Mar 87 etc through to Sep 87 - doing a comparison with the often seen (especially in the last three years with cash rates so low) "What if you'd invested $100 in shares vs $100 in a cmt?"

These days shares look great. They always do before the fall.

Going back to the 86/87 experience. Adjusting for the real world effect of the survivorship bias (using the accumulation not just price indices) - the share market did not match the return from cash until Sept 1999. Then we had the Tech wreck and once again the survivorship bias came through with the indices.

Some fund managers close their share funds, rename them etc so that their poor long term performance is masked. Others (fund of funds) change the managers they use, and hey presto they have a new long term performance graph showing the new managers.

Ain't hindsight grand!

Moral of the story

Fund managers and brokers don't make much money out of cash, cmts or bond funds but do make a mint out of share funds & share trades. The typical share fund mgmt fee is 2 to 4 times that of a cash/bond fund.

HOWEVER I'm not singing the praises of bond funds as around the major countries 10 or 20 year Govt bond rates were between 0.6% to 1.8% thanks to the central banks printing money. In the last 6 months the bonds have been the canaries in the coal mines. They're singing.

That's why despite Greece being the proverbial 'flea on an elephant' - so was Holmes a Court on BHP.

Greece is a domino. Just one domino, there are plenty of others such as Spain and Italy which are economies that start to matter. Have a look at Banco Santander for example to see what the consequences could be.

And remember all this trouble with Greece really came about because Goldman Sach's past & current employees got the ECB to pay 100 cents on the dollar for the billions in Greek Govt debt that GS and other investment banks had been buying up leading into the first bailout.

<Using a tried and tested method where they bought up unsecured GM debt as low as 8 cents on the dollar and Obama effectively nationalised GM and paid GS et al out at around 40 cents on the dollar. What did not get much/any publicity was that the unions had 'suggested' that certain fund managers should loan GM money once Ch11 began. These loans out of pension funds around the US were fully secured at 2x face value against assets that were saleable such as the auto financing book and distribution property around the US (not in Detroit).

Obama, as part of his 'package', took away their security and they lost 60 cents on the dollar. GS et al made billions at the expense of US workers' pension funds losing it.>


Trouble is those financial wizards with ex-colleagues as Finance Ministers in certain European countries or advisors to other EU Govts - bought the debt as low as 28 cents on the dollar.

So the European tax payer provided windfall profits to the investment banks when the investment banks should have shouldered their losses.

Some non-EU countries held the line, allowed their zombie companies to go under and now have healthy economies. Remember the Asian Crisis?

Greece BTW once admitted to the EU put their wage rates up to similar levels as those for German workers. Trouble is, unlike the Germans, the Greeks have a national sport of not paying tax, producing around 40% of the output per worker that the Germans do.

It was always going to end badly.

 

[SeatBackForward]

Happy financial year....... Yippee

Will be glad to see the end of EOFY..

 

[whatmeworry]

If Greeks are not careful they will lose everything.

What utter stupidity to have a system where if you work in the public service for 35 years you are entitled to a EUR2,000 month pension tax free + a lump sum payment. Say you started working at age 17 that means you are a pensioner at age 52. And it does not stop there. You can then continue working paying very little tax and earning your pension. Total and utter stupidity.

The Greek people have plundered Greece. They are as much to blame as the politicians. One political promise after another to get re-elected. The money had to come from somewhere.

One could make analogies with the situation in Greece to the situation we currently have in Australia. Baby boomers taking advantage of negative gearing, discounts tax rates for super contributions and people claiming the pension despite owning their own home and 900k in Assets.

Germany also had to clamp down on generous pensions. My Aunt is currently enjoying 3000 euro a month pension.

 

[drron]

One could make analogies with the situation in Greece to the situation we currently have in Australia. Baby boomers taking advantage of negative gearing, discounts tax rates for super contributions and people claiming the pension despite owning their own home and 900k in Assets.

Germany also had to clamp down on generous pensions. My Aunt is currently enjoying 3000 euro a month pension.

No where near close.We fortunately have governments at times that live within their means.
And Baby boomers had no where near the "rights" of current generations.Government support has increased ahead of inflation for a lot of Australians.

 

[TomVexille]

No where near close.We fortunately have governments at times that live within their means.
And Baby boomers had no where near the "rights" of current generations.Government support has increased ahead of inflation for a lot of Australians.

I'm sure $7/fortnight is WAAAY more than inflation then

That's how they treat real people. So get some facts.

 

[drron]

I'm sure $7/fortnight is WAAAY more than inflation then

That's how they treat real people. So get some facts.

For all of my working life and now in retirement I have been a net contributor to the Government.
Go back and research tax deductions in the 70s and 80s along with government handouts.You will find a lot of difference.
I did not get any childcare allowance,my wife took 18 months of work.I did not get a First Home buyers grant.There are many more if you would like to search for the facts.

 

[TomVexille]

For all of my working life and now in retirement I have been a net contributor to the Government.
Go back and research tax deductions in the 70s and 80s along with government handouts.You will find a lot of difference.
I did not get any childcare allowance,my wife took 18 months of work.I did not get a First Home buyers grant.There are many more if you would like to search for the facts.

As am I. You obviously don't understand how difficult getting started is now in Australia with the way the older generations are killing the job market.

 

[blackcat20]

For all of my working life and now in retirement I have been a net contributor to the Government.
Go back and research tax deductions in the 70s and 80s along with government handouts.You will find a lot of difference.
I did not get any childcare allowance,my wife took 18 months of work.I did not get a First Home buyers grant.There are many more if you would like to search for the facts.

I was out of work recently, not by choice or for an wrong doing, but due to budget cuts. Centrelink deemed $7/fortnight suitable for me to live off while trying to find a new job. But I must be a dole bludger right?

 

[Flashback]

Wow, guys. Ease up .......... maybe take this discussion offline?

 

[anat0l]

As am I. You obviously don't understand how difficult getting started is now in Australia with the way the older generations are killing the job market.

I was tempted to think it was kind of the other way around, i.e. the older generation was basically suffering from ageism in the workplace. Given that jobs for life is the myth of the era, someone who is older trying to get back into the workplace is pretty difficult, unless you have a stolid trade or profession, or have considerable experience to get into the area.

On top of that, those on mature contracts and thus ability to command more wages are usually the ones that are targeted by cuts first, unless it's a case of thinning out resources (i.e. you can sack a few younger people and save more money than sacking one older, experienced one).


Being stuck in the middle, i.e. not a fresh graduate nor green apprentice, but not with considerable experience, is even worse to make the case for employment in a depressed job economy. Maybe the "older generation" are the ones pushing the buttons in parliament and corporate level which is contributing to the job market dynamics, but I don't see the current generation necessarily being more egalitarian once they replace those people.


I can agree that getting started now in Australia is relatively difficult. Within the same generation, wind back less than 10 years and the situation would be very different.

I don't know about allowances and what not, but inflation wise combined with some rather rash economics, I think Australians in the workforce cannot be convincingly argued as better off than one or two generations ago. My father concurs with this one. Mind you, one or two generations ago, plane travel was pretty rare (even for business), people were happy to drive moderate cars (rather than SUVs or even new vehicles), fuel was certainly cheaper (even after factoring the cost of living), drinking a bottle of wine with dinner was considered a bit expensive, people dined out less (fast food excepted), private school education existed but certainly wasn't being overly clamoured by every parent, and the amount of consumer electronics owned was nothing compared to now.


One thing is for sure is that there is a huge pension budget that must be provisioned somehow... and there is a huge looming bubble with the superannuation coming up as well.


I guess in the end, we all find a way to survive.

 

[Hvr]

And straight after Greece, Puerto Rico is likely to file for bankruptcy.

Both Puerto Rico’s governor and his new advisor, who previously oversaw Detroit’s bankruptcy, agree that the Caribbean territory is broke. The question now is whether the island will be allowed to go bankrupt.

 

[drron]

As am I. You obviously don't understand how difficult getting started is now in Australia with the way the older generations are killing the job market.

I was out of work recently, not by choice or for an wrong doing, but due to budget cuts. Centrelink deemed $7/fortnight suitable for me to live off while trying to find a new job. But I must be a dole bludger right?

As has been said it is not only the young finding it hard.
As a physician my job is to talk to people.Nowadays in public hospitals.Go and talk to an over 50 year old who has lost their job and has an illness.Basically not going to find a job and their savings are going to disappear.All I am trying to say don't think the 60s,70s and 80s were the good old days.Plenty of problems.Unemployment over 10% in the mid 70s,interest rates well above 15%.Even as a medico getting a quaranteed salary I worked nights and weekends as a GP locum to save the deposit for our first house.

And Blackcat no where did I say a dole bludger.But just imagine an over 50 in your position losing their job having the same level of benefit you got until their savings have nearly gone and with very little prospect of a job.Every generation has and will face problems.Though those problems change often the consequences do not.

 

[blackcat20]

As has been said it is not only the young finding it hard.
As a physician my job is to talk to people.Nowadays in public hospitals.Go and talk to an over 50 year old who has lost their job and has an illness.Basically not going to find a job and their savings are going to disappear.All I am trying to say don't think the 60s,70s and 80s were the good old days.Plenty of problems.Unemployment over 10% in the mid 70s,interest rates well above 15%.Even as a medico getting a quaranteed salary I worked nights and weekends as a GP locum to save the deposit for our first house.

And Blackcat no where did I say a dole bludger.But just imagine an over 50 in your position losing their job having the same level of benefit you got until their savings have nearly gone and with very little prospect of a job.Every generation has and will face problems.Though those problems change often the consequences do not.

I've also had to say good bye to my savings. No more house deposit...

 

[Pushka]

No where near close.We fortunately have governments at times that live within their means.
And Baby boomers had no where near the "rights" of current generations.Government support has increased ahead of inflation for a lot of Australians.

You mean the baby boomers who came into employer paid Superannuation really late?

 

[SeatBackForward]

Regardless of the era, the rich are getting richer and are more than happy to take away from anyone for themselves..

Not a new idea, but being a global village now. There can be more victims..

 

[OATEK]

As has been said it is not only the young finding it hard.
As a physician my job is to talk to people.Nowadays in public hospitals.Go and talk to an over 50 year old who has lost their job and has an illness.Basically not going to find a job and their savings are going to disappear.All I am trying to say don't think the 60s,70s and 80s were the good old days.Plenty of problems.Unemployment over 10% in the mid 70s,interest rates well above 15%.Even as a medico getting a quaranteed salary I worked nights and weekends as a GP locum to save the deposit for our first house.

And Blackcat no where did I say a dole bludger.But just imagine an over 50 in your position losing their job having the same level of benefit you got until their savings have nearly gone and with very little prospect of a job.Every generation has and will face problems.Though those problems change often the consequences do not.

My Grandfather used to say how lucky he was during the great depression of the 20s/30s, because while most of his 10 brother's and sister's families had no paid job for a number of years, he had 2-3 days a week work as his firm cut hours rather than positions. One brother turned his backyard into a market garden and hothouse, and did very well until his landlord decided he could be making the money from the garden for himself. But Uncle Peter started again and turned a smaller hothouse into an international flower business from a backyard in South Hurstville.

Many of my grandparent's generation, including my other Grandfather, came back from the first war with virtually nothing in their pockets (and in his case missing a leg) and relied on soldier settler blocks being allocated in what seemed then to be far off corners of the state (although some are much sought after today).

In saying this it is not to put down the challenges that young people face today. I have two married daughters in their 30s, one with a Unit and the other living downstairs here with her husband and daughter as they struggle to put together the finance for a place of their own after losing all their savings moving countries and trying to restart careers. I see how tough it can be, but I do believe that what they face today is nothing like many of the older Australians who went to war in the First, Second, Korean and Vietnam wars have had to face, or those that struggled for years to get a job after losing one when unemployment was at 10%.

Every generation has its challenges, no doubt about that, but I would rather my 30+ yo girls were struggling in today's world where there is childcare and other support schemes, than in some past eras in Australia where there was very little support outside the family. Take the case of many from my generation who served a tour of Vietnam, who were made outcasts by those who opposed the war. Many of those late Baby Boomers so often derided have had a much tougher life than many appreciate. But I do appreciate their struggle to find/keep a good job and earn a good income because their marble came out of the box and mine didn't. Most of the close friends and work colleagues of mine who went to Vietnam finished up living at far off Wyong or Hazelbrook and in one case a fellow who at 22 tried to come back to what you might see a soft Public Sector job but just could not cope after his experiences. At least for those returning from Iraq and Afghanistan they are not treated like pariahs, although they will struggle with many of the same issues.

So when Drron says that the good old days were not so great, he is not putting down someone who has to struggle on $7 a week job assistance. He is just saying that such issues are not just restricted to the young, or this generation, and that in general at least the young have prospects while many older Australians without work and with an injury or illness, have none, and will have to struggle for the rest of their life, decades perhaps, on disability services and handouts until they reach the ever increasing pension age.

 

[vetrade]

Glad I salary sacrificed into our smsf the other day. The Greek fiasco just chewed it all up from shares. [/IMG]

I havent bought shares in a while. It was my current portfolio.

Obviously some misunderstanding / ambiguity with your first post.

 

[cove]

The current Social Security budget is about $150 billion and couples with children who earn below about $60,000 combined actually contribute zero after allowing for offsets and allowances and subsidies from various Government initiatives.
We have big business like Microsoft,Apple and many others paying bugger all.
Double income and no kids are paying lots.