Depression, Deflation and the FU virus
How the heck are we not in a Depression right now???
The definition of a depression is a 10% drop in GDP from Peak to Trough....
Exports are falling at a 50% clip..
Imports falling at a 33% rate.
New housing sales are down over 66% from peak
Auto sales are 50% of peak
Travel is falling at 22% annualized rate between Oct. and Dec. according to the WSJ.
Travel, Housing, and Autos account for well over 1/3 of the GDP.......add in imports and exports and we should be close to half of our economy....all crashing or crashed over twice the accepted depression definition.
We know that financial services companies have imploded across the board.......and the decelleration is accellerating in all areas of the economy including healthcare....and we still are not in a depression.
The TRILLION dollar travel industry is bleeding and blood is flowing everywhere.....tonight's wsj:
As a result, the trillion-dollar industry -- a major employer in the U.S. -- is reeling, and struggling to lure people back with deep discounts and special packages. For their part, Americans are sharply scaling back vacation plans, canceling trips outright or trading down to cheaper options.
"Everybody seems to be in a panic mode, afraid to spend money," said Carol Beazley, who along with her husband, Jim, runs the Beazley House, an 11-room bed and breakfast in Napa, Calif. She notes there are fewer takers for extra services at the century-old mansion, such as massages, $200 balloon rides and the Napa Valley wine train.
The Beazleys say they've had to lower room rates by "well over $100" to keep their inn booked, and this month are offering 50% off, with a minimum two-night stay, for returning visitors. "We're getting our rooms sold but we're getting 33% less income on each one," Jim Beazley said. Their staff has shrunk to just a handful, half of what it was a few years ago.
THIS IS REALITY IN THE HOSPITALITY INDUSTRY!!!!!!!!!!!!!!!!!! A signifcan't part of GDP.....and prices are crashing....just like prices for housing and autos............and wages are crashing in many industries........and there are people still talking about price inflation?????????? Doctors are even slashing the cost of procedures.
I spent the afternoon with a friend in the medical industry. This person is the top salesperson nationally for the company.....the company is private but is the market leader for its product......and in the last four months physicians and groups have started to cancel or delay orders.....I have heard the same for friends selling nationally for IT companies....and friends in the transportation business....much of this slowing occured in the last few months and is not reflected in recent earnings reports.
Physicans performing any kind of elective surgery have seen a sharp drop off in patients. Dentists are seeing a slowing in their business.....same with opticians......and even family docs because more and more want to avoid escalating copays......
All of this leads to further slowing in the economy and leads people to just say FU.....I don't want to buy....and if they don't buy.....employers say FU to many of their workers because they don't need them due to slowing sales......and employees are saying FU to retailers, credit card companies, and mortgage companies because they are seeing their pay cut or jobs eliminated entirely.
Pretty soon...many are going to be saying FU to each other because few will have any money or any customers.......
Remember....much of America is TAPPED OUT.....IT HAS MAXED OUT ON BORROWING AND CAN BARELY AFFORD TO SERVICE DEBT AT CURRENT LEVELS.......
Please keep the following secret among the CAPS community as Alstry and Alstrynomics is exclusive to CAPS......
it DOESN'T matter of you pour Zillions of Trillions into banks and wipe out all toxic mortgages off the banks balance sheets......if the people, cities, and businesses that banks lend money to are tapped out and barely making ends meet at current debt levels.........there is not a chance in hell that banks will lend them another dime going forward after what they just went through.
So my friends... the joke is on America and Americans by Wall Street....we are freely handing over all of our money......and they are simply keeping it in their vaults laughing at Americans and the hardworking citizens as they give themselves hundreds of millions in bonuses. Pretty soon the process will run its course and Americans will have little left to pay for much of anything......most will be dependent on goverment handouts just to survive.........
and as we stand there naked.....looking at each other......we will ask ourselves.......how did we let the FU virus infect us all but not our banks who injected us with the virus as bankers sit sipping champagne toasting each other trying to figure out which government offical to buy next????