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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: GraceZ who wrote (51878)	1/28/2006 11:10:40 AM
From: Mike Johnston	Read Replies (1) \| Respond to of 110194

If medical costs are inflating, then companies are either forced to slash the benefits or to cover that cost. When the business covers the cost, it leaves less money for cash wages so that the employee will get smaller raises in the future. Another possibility is that increased costs are passed on to the price of final product or service. In that case the employee will get the raises, but the prices of products and services in the economy will rise, as many companies have to do the same thing. So either way, the total compensation registers an increase, but the employee is not better off because of corresponding rise in inflation. It is a wash.

To: GraceZ who wrote (51878)	1/28/2006 11:20:35 AM
From: Mike Johnston	Read Replies (1) \| Respond to of 110194

What would your estimate be of the number of households that would be on the verge of financial precipice should housing prices decline 30 % ? One has to consider that 43% of first time homeowners put no money down last year, they are upside down immediately as the market stalls. And how about a possibility of a "black scenario" of a 50% drop ? What consequences would that have for the lives of millions of people, many of them without understanding of the powerful economic forces that can literally wipe them out.

To: GraceZ who wrote (51878)	1/28/2006 6:26:21 PM
From: mishedlo	Read Replies (1) \| Respond to of 110194

Grace, this is silly, OK so it has cash value but at the end of it all, the employee is further in the hole with less discressionary spending. You make it sound as if the employee is better off in the end. This is one of the reasons for declining real wages and I think it is HUGELY understated especially for those without insurance. Mish