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alstry (35.42)

Destroying America?

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March 14, 2008 – Comments (3)

Sometimes my Titles are a little over the top, but they are simply there to make the reader think. 

A gallon of gas, a gallon of milk, and a loaf of whole wheat bread is now over $4 each in California.  Premium gas is approaching $5.  Milk is over $4 per gallon in many parts of the country.  Minimum wage is about $6-7 dollars depending on where you live.  At this rate it won't be long before the minimum wage worker has to exhange an hour of his life for a loaf of bread.

The problem is not only directed to minimum wage workers, it is impacting retired and the rest of the country as well.  It is not just the cost of the the above three items that have skyrocketed, it is many many non housing related expenses that have simply spiraled out of control.  We as a nation are rapidly approaching a point where many may not be able to simply meet their daily needs, less thinking about buying a house.

The situation has become so severe, our pets are being abandoned around the country.  I can understand the shitzus, but the cute collies as well?  Imagine a world with no Lassie?  Just Google/Yahoo "animal shelters home foreclosures"....it pretty amazing and not limited to any geographic area.

OK, so let's keep lowering interest rates, will Gas and Milk be $8 a gallon?  The CPI comes out today, let's see if it reflects reality, or will we be told inflation is contained?  Since banks are now making it harder and harder to get a loan, will two families have to start living in one house to make ends meet?  What will that do to the supply of housing in America?

3 Comments – Post Your Own

#1) On March 14, 2008 at 8:22 AM, alstry (35.42) wrote:

Sure You Have Seen This Before..................

Auction-Rate Securities Hit Mid-Cap Companies

Some large companies, like Bristol-Myers (BMY), has already said that auction-rate securities on their balance sheets may have to be written down now that the market for this paper is illiquid.

The Wall Street Journal points out that a number of start-ups have similar problems. Money provided by VCs was sometimes put into auction-rate instruments because of the reasonable yield and highly liquid market. Some of these start-ups now have cash problems, but their VCs could loan them funds while the markets free up

The real danger to the stock market and economy is the thousand of mid-cap and small-cap companies which may have put their cash into these instruments. They are often carried on the balance sheet as cash-equivalents. Now, because they cannot be sold, audit committees may have them written down in value. This could take public companies with tens or hundreds of millions in quarterly revenue and modest profits and push them deeply into the red.

Smaller public companies with significant capital expenditures may no longer have access to the cash to complete these projects. Their funds in auction-rate securities could completely compromise their access to funds.

The Nasdaq indexes face another set of downward pressures as companies listed on that exchange begin to file that their cash positions are no longer cash and that large P&L losses will be the result.

NEVER IN THE HISTORY OF OUR COUNTRY HAVE WE SEEN ANYTHING CLOSE TO THIS........OUR INVESTMENT GRADE ASSETS ARE EVAPORATING.....WHAT's LEFT?

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#2) On March 14, 2008 at 8:38 AM, abitare (35.58) wrote:

The country will survive, the US dollar may not.

The Japanesse market has already gone thru this, they survived. Their stock market, real estate and currency was cut in half, no recovery in 16 years.  

Plenty of things to buy SKF, SRS and GLD 

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#3) On March 14, 2008 at 9:25 AM, leohaas (31.56) wrote:

"or will we be told inflation is contained"

Just like we were told that the credit problems were contained to sub-prime loans, and that Iraq was stocking up WMDs! This is the price you pay for electing a miserable failure! 

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