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PEOPLE
Salem
Rabat Morocco
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21
comments.
Is luxury a thing of the past?
12:27:02 PM Wednesday Feb 18, 2009


Like Howard Davidowitz says "The average American used to be able to borrow to buy a home, send their kids to a good school and buy a car. A lot of that is gone!". "The unraveling of an economy built on debt-fueled spending will be painful for years to come". He said."The Americans' Standard of Living has Permanently Changed and the worst is yet to come!". The bailouts are a Dems official solution to the likely total bankruptcy, but the American people has maybe another solution to face the problem: Fight against consumerism.

I wonder what the impact of the meltdown on the Moroccan American community is going to be; particularly for those who are fresh emigrants into the US, those with most of their family members still living in Morocco and to a certain extent are depending on their US relatives for all or part of their living. You guys who are living out there, can you give an insight?


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8:43 pm    March 7, 2009

hudhud message
21
what I find interesting about this economy is that I've observed within my own circle of friends, that "the average American" middle class worker if you will, has suddenly realized what millions of other ppl around the world have never had: easy access to credit.

that's what the american dream really is, if you ask me. the house, 2 cars, 1.5 kids with college funds, plastic inflatable pool, and a dog, are facilitated by that credit.

one of my friends said, "this whole country is running on one giant plastic card."

it was funny..

for a moment.

·

12:11 pm    March 6, 2009

Salem message
20
Employers are shrinking their work forces and turning to other ways to slash costs — including trimming workers' hours, freezing wages or cutting pay — because the recession has eaten into their sales and profits. Customers at home and abroad are cutting back as other countries cope with their own economic problems.

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7:17 pm    February 27, 2009

Salem message
19
For many developing countries, the U.S. credit crisis will mean slower growth and rising inequality. The effects will be protracted, and not all will show up at the same time. And the nature and degree of impact will vary widely. Some countries, notably those with extensive foreign exchange reserves and strong fiscal positions, will be much better able to cope than others. But overall the crisis is very bad news for developing countries and especially for the poor.
·

9:07 pm    February 23, 2009

moha ouhmou message
18
Is luxury a thing of the past?

Yes, if most of your money was managed by Bernard Madoff.

The current economical crisis is exactly that - a crisis. It's not an infinite loop downward. It simply can't be.

The seeds for an upturn are being planted already. Consider housing for instance. Spending on construction has fallen, ok? but that also means that the supply of houses is now lagging behind population growth. That in turn will eventually prompt a revival in demand. Same goes with almost everything. A contraction in consumer demand is always followed by a spur in consumer spending. It's cyclical.

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7:44 am    February 23, 2009

youness yahya message
17
adnane:
who said i'm a bad engineer?:)
so do u wanna invests in Morocco? well i got some pretty good ideas for you if you have time you lemme know and i'll tell ya ok?
·

1:37 am    February 21, 2009

Salem message
16
Yea, I love Georgia Font in Raioo Notes Titles; both in banner and color. Thanks Adnane to revert back when you have sometime. For the rest, I'll do my best. Have a nice weekend.
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5:18 pm    February 20, 2009

Adnane Ben. message
15
11
Yea I did change the Font and Font size, but I agree it is too big. I will revert back sometime tomorrow. For your reference, the font name is Georgia. I like it especially when it's big. I use it in the note title. Ok back to the money talk. Thanks Rasta for explaining that jargon stuff. I just hope we all recover form this mess. Youness you are not a bad engineer :) and Salem, tell us more and more and more about the economy in Morocco, especially real-estate, new cities, new harbors, outsourcing.
·

3:37 pm    February 20, 2009

Salem message
14
Nationalization? in which country is this talk taking place? which continent? which era?. The hot talk arised about nationalization of the banking system in the US after spread of rumors based on officials' declations! What are the concerns of the shareholders?
·

12:36 pm    February 20, 2009

Salem message
13
About two decades ago when I was studying some business administration, the curriculum was then tainted by a lot of "modern" concepts as the Moroccan companies were mostly "family businesses" (they still are to a large extent). We used to study real cases, most of them from Derb 3omar, and we constantly kept eyes on what was going on in the advanced western countries which provided the examples to follow,the references for all comparisons. Yes, for us, to be successful, we had to follow their path!

Anyway, the banking system borrowed its platforms from the french system through collaboration and partnerships. In many cases, the names of banks in Morocco were very similar to those of banks in France. But yet, like in all other sectors, banks basically belonged to families and consequently managed as family businesses.

The sacred condition for a bank to lend you money was and still is the "the physical guaranty" i.e. Mortgage (l'hypothèque). If you have nothing to put on the table to borrow money, nothing to mortgage, then forget about borrowing money from the bank. As "modern" business administration students, we used to criticise a great deal this policy of the banks. "underdeveloped!" we used to qualify the banking system because of such a policy. Of course we knew about people in Europe (the ones we could see) who could borrow money JUST because they had a GOOD project.

Now, with the current financial crisis around the debt practices, debt built on debt built on debt...... on an infinite chain of interest rates with no correspondance to real (phyisical) value, the proliferation that made of the system a castle of sand, I realize that, and precisely because of that, the banking system was not totaly wrong. For that, SO FAR, we do not feel what people in the west feel right now.

But if we get to be contaminated someday, that would be for another reason. That would occur because of the links between the banking systems in the global economy. The wave will probably reach us if the system in the US does not recover its health before it's too late. Cross fingers!

·

8:22 am    February 20, 2009

youness yahya message
12
Hello cousins:)
wa finekoume? wa ca va 3likoume?
Ok let me just give you a some what clear pic of what's going on with the Economy in Morocco. As you all know we still have a lot of " moul chakara" which means no money in the bank, all money in "sedat" or "under the bed because the pillow is too small for it", So these type of ppl don't get effected by the down side of the economy. BUT since Morocco has been pushing for International investments being based in Morocco for exp. ST microelectronics and Renault-Nissan, these companies have been hit hard in 2008 so nowadays they been "resizing" and/or "pausing" their project in Morocco, like R-N, where Nissan has pulled off their part in the Tangier project. Not only these two companies but most of multinational ones, except for the ones who won goverment projects like sagem security for example, working on the new "la carte national biometric" as well as "la carte grize and passport" so they are all set for at least the next 5 years.

Back to Rasta " bate loulidate" well i agree with you on the middle class consumerism i'll say you are right ma man, BUT in Morocco this covers all the classes, with banks for the pass 7 8 years they been giving moans left and right will type of interessts and all type of persons walking their doors, i'll give u an ex: Last year there was an ad that say " if you are working and don't have all your paper work "CNSS, IGR,....." meaning the government doesn't know that you work, and you are also renting a place, come to this bank and we will guarantee you a place and instead of paying rent you will be paying for you own place and that is up to 40 years ( 40 years damn that's a lot). You also can get loans in every major religion or public holiday, l 3ide lakbir bach tachri 7awli kay dire 3000 DHS ounta katchade khire 2000 DHS, for exp....
BUT who ever sees the cars in Morocco will know that this country has not being effect by this so called crisis. PPL can still buy cars that are 600000 DHS ( 60 million dial centimes) so in conclusion, if you are "moul chakara" then you got noting to fear, sir chri like chi firma dial djaje ou koune hani. If you are a foreigner working in Morocco, then you are simply a king and living like one too. If you work for the government and has a good job, then you are a free car, a free house, a free gas and also free maids. If you are like me ( a simple hard working no good engineer) then allah ira7make.
wa choukran.

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6:12 am    February 20, 2009

Rasta Gnawi message
11
7
did you change the font in the comment boxes? It looks bigger and a different type.
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6:12 am    February 20, 2009

Rasta Gnawi message
10
7
Adnane. We have come a long way from "old ages." I don't know that they were sweeter or sweet. It's a nice romantic picture you paint, but it remains a nice picture in the imagination.

Ethical contracts here specifically refers to debt contracts that are not based on absurd collateral agreements. Debt contracts that are made to people who have the ability to repay, presently or in the future. Debt contracts where the parties understand clearly their obligations and rights and any protections guaranteed by the law and the State. So it's mostly within the debt obligation area.

Risk management is what banks will do to manage their loan portfolios. Reasonable loan risk management assumes some non-performance but manages the portfolio to minimize it. Some banks' idea of loan management is "no default," which essentially means loans remain within a small fraction of the economy: the one that is already well collateralize.

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9:12 pm    February 19, 2009

samir a. message
9
How disappointing! Aunt Suze is the best! I know why you don't like her: because she is not as pretty as Cramer:-)

My first-finger-in-the-air-and-for-free rule is that you should contribute up to the matching of you company (my second finger-in-the-air-for-free rule is never say NO for free money - The company matching is free money!) after matching limit, you could opt for an IRA or, if you could, go up to max contribution ($15500) that is almost $4300 saving in your tax! (for every dollar you save, Tonton Obama will give you back up 40 cts back!!! I know, He iis generous ).


My third-finger-in-the-air-and-for-free rule is if you are in hole and keep digging, the hole will get even deeper!

·

7:51 pm    February 19, 2009

Adnane Ben. message
8
Here's what someone advised me recently:

You should continue contributing to it. Unless you absolutely need the money now, unless there's a dire emergency, unless it's hurting you to keep adding to your 401K, you should keep contributing to it.

I assume you're contributing on some regular basis, like a bi-weekly or monthly basis? And if so, that's good, because you're doing what's known as Dollar Cost Averaging. Dollar Cost Averaging means you buy fewer shares of XYZ when the stock is expensive and more shares of XYZ when the shares are inexpensive, or, in this case, at a bargain basement deal.

More than that, doing Dollar Cost Averaging as the effect of making you budget with the money you have left, and after a while you aren't even aware that you're contributing. It happens automatically.

Now me, during this time, I'm increasing my contribution.

I don't know what your portfolio looks like but I assume you have some money in index funds and bond funds? Most 401Ks offer you a plan where you can choose your allocation. My first advice is that you should put at least 25% in bonds and the rest in index funds but if it makes you feel safer, you can allocate all your money towards bonds. Bonds won't lose any money. Or you can even allocate it towards cash and wait for the market to recover (but trust me, people always miss the moment when the market recovers).

Instead of thinking that you're losing money, imagine instead that you're buying a series of businesses at a bargain basement price. The stock market will never go to zero. There might be some rough patches but eventually we will recover and it will go back up. And that's what your 401K is there for: you add money to it now, let it grow with the magic of compound interest and regular contributions, and it'll pay off in your old age.

·

7:12 pm    February 19, 2009

Adnane Ben. message
7
3
Rasta said: "We want Moroccans to have that same flexibility, which means a financial system that is based on enforcement of ethical contracts and reasonable risk-management."

Any example of ethical contracts, and reasonable risk-management? what is risk-management in the first place?

And what do I do with my 401K besides what Samir advertised on behalf of Suze?

I wish we're all back to old ages, starting from scratch, working in the fields, reaping what we sew, and exchanging goods, caring for family, sheltered in tents, and riding horses. What a sweet life that would be.. until a fight bursts and we have to carry swords, or a drought hits and we have to starve.. but then again, if our leader has a nightmare at the right time, and there happens to be a newly released prisoner who met a prophet in prison who can explain dreams.. then we will know that an economic crisis will hit and we will have a clear plan of dealing with it.

So my question is, Do we need a miracle now?


·

7:04 pm    February 19, 2009

Adnane Ben. message
6
5
Suze Orman... I dislike that woman, but mostly perhaps because of her obnoxious annoying voice. She makes such a show and all she cares about is publicity and her next book sales. She's been pushing for it lately. Two thumbs down for Tata Suze.
·

6:40 pm    February 19, 2009

samir a. message
5
Adnane,

under a rock, that is true :-). I just finished my Tax return and I have the proof that there is no such thing as free money. Moulay IRS is watching!

Don't you listen to Tata Suze Orman? The wisdom of Tata is quite something!

Tata suze says that for your 401K, if you are, let's say 5 to 8 years to retirement, then you should go for the "safe grandpa" kind of investment. Tata suze says “Don't put your eggs in the hand of that soulless Tonton Merril or Morgan's hand; they will bet (with you money) on some worthless toxic paper. Aunt Suze says buy CDs or Treasury Bonds instead.

You take care of you your best friend i.e. your pillow!

Samir

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6:05 pm    February 19, 2009

Adnane Ben. message
4
Salem quoted some guy called Davidowitz, and here is what he has to say

Samir, you're not getting FREE money? are you living under a rock? :)

Like Rasta said, there is no free money, it was just my silly writing getting out of sync with reality.

On another note, people close to retirement or who just retired must be feeling a huge hit.. with their 401K drained out by the market.

·

3:55 pm    February 19, 2009

Rasta Gnawi message
3
There is no free money, and there are no freebies. What they give now, they take from the future. I think it's dangerous to assume that what they're doing has anything to do with Islamic prescriptions.

People need to chill a little and see things for what they are, lest they damage their lives. Consider this thought: consumerism is not an American thing; it's a middle class thing. You have more money, you loosen up a little. you take your family out to a nice dinner, to see the world (when did that become a crime!?)... or whatever. You want a better life. Been to Moroccan souqs in recent years? always crowded. Consumption at various relative levels is on the rise worldwide. Last time I was there, people were spending $200-500 on a used cell phone easy. Middle class has been documented on the rise there. Now give those guys the ability to borrow, and you'll see how much debt they'll accumulate, then compare that to current american household debt.

The economy is in trouble, true. But it's in a vicious spiral of negative expectations. So as an example, Adnane is more frugal now. Maybe he worries about his wage tomorrow. so he spends less now. He keeps his money in the bank instead of transferring it to some production agent in the economy. Multiply this example by X and you have a major contraction in current consumption, meaning higher savings. So, supposedly you triumphed over consumerism at the price of major contraction in existing economic infrastructure. What kind of growth does that build in the system? What happens to all the savings that are now accumulated? they go back to work... so consumption comes back.. so we do 180 degree turn and cause massive devastation in lives and wealth simply because we freaked out over some whack job at CNN's comments that the world is ending.

Americans can still borrow to buy a home, send their kids to school, and buy a car. Some of that is gone, but most of it is still here. We want Moroccans to have that same flexibility, which means a financial system that is based on enforcement of ethical contracts and reasonable risk-management.

Who's this Davidowitz cat anyway?

Jah bless.

·

3:16 pm    February 19, 2009

samir a. message
2
Adnane,

"They are" giving free money in Boston, I say wow! I should forget the sunny CA and move to snowy MA and enjoy the free money :-)

Silly whispering voice! she should know better. She probably forgot that the globalization, free market and capitalism are in play here; which means: that therever you go, you will feel the pinch, nobody is immune.

... unless, under that fluffy pillow, you have enough (I mean a lot) of that green paper :-)


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8:58 pm    February 18, 2009

Adnane Ben. message
1
It's tough. Moroccans who still have a job in the US should be thankful. Really thankful. I pulled up a huge hand brake. I spend little these days. I worry about the future. Are Moroccans in Morocco feeling the same? or are you guys immune from this? I asked this question before on one of my notes. For someone like me who understand very little about economics, I see that America is using the right techniques to try and get out of this. Surprisingly most of these techniques appear to us Muslims, straight from our Muslim teachings. Cut off interest or minimize it. Forgive credit dues. Bail out people who are overwhelmed with credit. Give away free money. Reduce spending. It all sounds great. But my fears are that the system is only doing these good deeds in order to get back into the credit-driven apparatus, which is the only apparatus that rapidly feeds the consumerism monster and sustains the economy in this country. This is a place of mass consumption, mass marketing and mass manufacturing. They have to sell and sell big. So even if they fix this one, I'm pessimistic that more will happen and probably worse until the system comes down to its knees completely.

My initial reaction is to keep my money under the pillow, start living frugally and forget about investing. Another voice is whispering in my ears to gather whatever I have left and take the first plane back home. But that's probably a tad exaggerated at this point, so I ignore it for now. Anybody else thinks differently?

·

Salem's notes (11)
 
2009
Ennio Morricone reminds the Rbatis of the cinema golden age..
March 8, the International Working Woman's Day..
A matter of pride!..
Is luxury a thing of the past?..
Persception, gouts et priorités d'actions des gens!..
 
2008
What a beautiful life story!..
Mawazine Festival 2008..
 
2007
Multilingual = Multidimensional ..
Shining ability is a gift.....
El Sombrero y el Tazar..
Isn't Nina a Gnawya?..


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