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alstry (36.04)

A Bankruptcy Explosion

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December 22, 2008 – Comments (10)

I have just run through a few of my Alstrynomic key indicators.  It is becoming clearer and clearer that after the 1st of the Year there will be an EXPLOSION of new bankruptcies.

There is no real boundries where the bankruptcies will be concentrated.  But for CAPs purposes, we will see a HUGE rise in corporate bankruptcies.  Expect to see astonishing layoffs.  This is not a prediction, but simply the application of information obtained through extrapolation of Alstrynomic analysis.

Prices are crashing around me.....everything is becoming cheaper....cars, gas, homes, boats, you name it, if it can be exchanged for dollars.....it is probably getting cheaper......even rates for escort services in Vegas are being affected from what I have read.

I know we are GOING to have Hyperinflation, Inflation, Stagflation......to me it sounds more like mental masturbation.  Prices are falling, the economy is deleveraging, and wealth is evaporating, and this is happening on both a relative and absolute basis.

Until this process levels out, expect the incidence of Bankruptcies to EXPLODE all over the world and the dollar to get stronger and stronger as the price for almost everything gets cheaper and cheaper.

10 Comments – Post Your Own

#1) On December 22, 2008 at 4:50 PM, guiron (21.49) wrote:

True, but there's no guarantee we're going to get inflation of any kind. Right now the fed is pumping money into the system which has been evaporated. More importantly, the fed is re-adding the velocity of money to the system, because nobody else is providing it. The amount of money in the system can best be represented by its velocity in this case. There is a risk that we will overinflate the system, but we do need a nominal rate of inflation for growth. If the fed did nothing, and we deflated for a year or more, we lose our ability to control the deflation, and that scenario spells Great Depression. We're not at the point where the Weimar Republic was (for one thing, they were paying war reparations, which was their catalyst).

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#2) On December 22, 2008 at 5:36 PM, Donnernv (< 20) wrote:

The deflation will be marked and widespread.  It will be exacerbated by the dramatic decrease in the velocity of money.

But this is temporary.  As the deleveraging unwinds and the economy returns to a new, lower,"normal", velocity will return to normal and the funds being pumped into the system will begin their inflationary impact.

End-of-the-world-as-we-know-it scenarios will have had, and outlived, their day.  Have fun with Alstrynomics until then.

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#3) On December 22, 2008 at 5:42 PM, kaskoosek (95.29) wrote:

When bankrupcies happen.

Supply of goods decreases. Food for thought.

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#4) On December 22, 2008 at 5:48 PM, alstry (36.04) wrote:

I do find it absolutely comical how people think Alstrynomics is and end of the world philosophy.  Quite the contrary....I am getting more excited than ever that when we turn out of this...America will be more competitive than ever.

It is just the pain going through it will likey be more than people currently anticipate.  We will have to make changes that few of us are prepared for...changes in many cases will make us a better society.

Bankruptcy could be viewed as the clensing of excesses from capitalism.  When things get too bloated, a diet is not necessarily the end of the world....less cheesecake yes, the end of the world certainly not.

I have little doubt when most of CAPs members are in the greatest despair, partying will be the attitude when Alstry is there.

On Dasher On Donner and Blitzen too, as the economy implodes we will prepare for the rest of the crew.

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#5) On December 22, 2008 at 5:50 PM, Strnj1 (69.49) wrote:

As long as everyone, particularly the media, is preaching GLOOM & DOOM, I'll continue to buy everything I can get my hands on that I believe still has value potential...

As far as the short term market direction, get a dart board.  The "Monkeys" are too busy printing money...

 

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#6) On December 22, 2008 at 6:53 PM, zygnoda (27.33) wrote:

Indeed.  We need bankruptcies like forests need fires.

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#7) On December 22, 2008 at 7:10 PM, alstry (36.04) wrote:

Now AmLaw picking  up on the rise in bankruptcies.....

New Report: Worldwide Bankruptcy Wave About to Hit

 

Europe and the U.S. are about to experience a significant increase in business failures.

That's the conclusion reached by Paris-based Euler Hermes, the world's largest credit insurer, in a recently released 57-page report on business insolvencies worldwide.

http://amlawdaily.typepad.com/amlawdaily/2008/12/new-report-bankruptcy-wave-about-to-hit-worldwide.html

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#8) On December 22, 2008 at 7:12 PM, guiron (21.49) wrote:

But this is temporary.  As the deleveraging unwinds and the economy returns to a new, lower,"normal", velocity will return to normal and the funds being pumped into the system will begin their inflationary impact.

That's true. If the timing is right, we can minimise inflation, but that's tricky. I'm personally not worried about inflation now. I am concerned that the next fed will miss the timing to stop pumping money and raise interest rates.

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#9) On December 22, 2008 at 7:13 PM, uclayoda87 (29.30) wrote:

Natural fires help the forest by clearing away brush and weak trees.  When government prevents forest fires and lets everything grow, this sets up the risk for very severe fires, which can can kill everything.  So when government props up dead companies, are they setting up a conflagration when these bankruptcies begin?

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#10) On December 23, 2008 at 3:48 PM, mliu01 (< 20) wrote:

C'mon Alstry.

 Hyperinflation = Nobody makes shit but money.

 So you think corps going bk will deflate more? Love your blog. But I hate to see you are not a hyper inflation believer.

First, the delationists say consumer price up does not mean shit. Because that has nothing to do with money supply.

 Now, the price going down. And you people telling me forget about money supply? Sure. Make up your mind. BTW, I don't care. Just sell your gold to people like US. We will all be happy for now. LOL

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