Breaking!!!!!!! 5 for 555 by 9.09
In keeping with the MOAP theme and to quell those accusations that Alstry makes only general statements without specific projections.......sorry to disappoint you and here it is...defined and distilled for all to see leaving little room for misperception upon inception:
The Institute of Alstrynomics is making its first official forecast that the S&P will trade at or below 555 before the end of September 1999.
Here are five key reasons, which fit on the back of a napkin, for such a dramatic call (but Alstry has a lot more):
1. Earnings...or shall we say lack of earnings. The S&P's earnings have declined 90% in the past 20 months yet the market has dropped only a fraction of the same..... by the time we get past a few more quarters of time.....Alstry projects that the earnings outlook may be worse than the past.
2. Rising Unemployment....there has been great debate exactly what the unemployment rate is...U3 under 10%....U6 closer to 16%....or John William's closer to 20%....regardless which number you choose....Alstry forecasts massive job losses over the next four months as Cities, Counties, States and Corporations have to deal with rapidly declining revenues.
3. Credit Defaults....as revenues decline and jobs lost...we are likely to see defaults in residential mortages, commercial mortgages, credit cards, corporate debt, auto loans and municipal debt rise to levels we have never seen before. As such we should continue to see banks shutting down across the country plus more banks require more capital as the Zombulator sucks money out of the general economy to keep the remaining banks on life support.
4. Slowdown in spending....by the end of summer, many contruction projects will be completed leaving relatively little in the pipeline going forward. Consumer spending will likely to slow dramatically as fear of unemployment rises and savings decline across the nation. Corporations and Municipal spending will likely cut back as well to compensate for lower revenues and profits. The combination of the above will likley have a dramatic impact on GDP in the upcoming months.
5. Rising Interest Rates.....as more and more realize there is less and less...fewer and fewer will want lend... and those that do will demand higher rates of interest to compensate for higher risk. As rates rise, the rate of return investors demand will also increase forcing PE multiple downward and naturally share prices fall as well.
If we have a true bond dislocation...there is no limit to how low things can go....................
There you have it...5 reasons for 555 by the end of 9.99.
An amazing article I came across today.....Can you believe this Verizon operator..WTF??
A 62-year-old Carrollton area man was found unconscious and unresponsive Thursday morning during an intense search overnight by Carroll County sheriff deputies, an Ohio State Highway Patrol trooper and the patrol’s airplane.
Two K-9 units, several fire departments and 100 individuals on foot also were involved in the search for the man, who Sheriff Dale Williams said fled his residence on Kensington Rd. after a domestic disturbance call to deputies.
The man, who was treated at the scene by emergency medical technicians, was taken to Aultman Hospital and released Thursday afternoon.
Sheriff Sgt. Ron Clapper and firefighters found the man about 1 a.m. after 11 hours of searching in an area just north of Augusta, including Manfull Orchards, where there is a Verizon cell phone tower.
Williams said he attempted to use the man’s cell phone signal to locate him, but the man was behind on his phone bill and the Verizon operator refused to connect the signal unless the sheriff’s department agreed to pay the overdue bill. After some disagreement, Williams agreed to pay $20 on the phone bill in order to find the man. But deputies discovered the man just as Williams was preparing to make arrangements for the payment.
The sheriff organized the search party for the man after deputies responded to the domestic call Wednesday at 2:21 p.m. at the Kensington Rd. residence. The sheriff said the caller said the man was destroying the house and breaking windows and other items.
But when deputies arrived they were told the man had fled and had taken several bottles of pills.
“I was more concerned for the person’s life,” Williams said. “It would have been nice if Verizon would have turned on his phone for five or 10 minutes, just long enough to try and find the guy. But they would only turn it on if we agreed to pay $20 of the unpaid bill. Ridiculous.”
Williams said he doesn’t know how close the situation was to becoming a tragedy because he’s not a doctor, but he thinks the man’s condition was very serious.