How Asset Values Can EVAPORATE...OVERNIGHT!!!!!!!
June 30, 2009
– Comments (6)
Many businesses in the U.S. are struggling with excess capacity. From autos to airlines to houses, "there's a landscape of industries and sectors that are recognizing that they're going to need to scale down," says Nancy L. Rose, an economist at the Massachusetts Institute of Technology Department of Economics in Cambridge.
With no plant to process the birds they raise, local chicken farmers have no income to pay off debts. Months ago, the hundreds of cavernous, metal-and-wood chicken houses in the county were worth at least $200,000 each when filled with chickens, farmers say. Now, except for flies and old feathers, the structures sit empty and are virtually worthless.
http://online.wsj.com/article/SB124631125369670273.html
In a world of excess capacity, the cost to maintain an asset often becomes higher than the economic value. At that point, the asset is essentially worthless. We are seeing it in land, office buildings, shopping centers, hotels, houses, warehouse buildings, factories, and now chicken houses.
This is a very foreseeable impact of Zombulation......
WARNING: For those of you not trained in accounting.....BEWARE OF BOOK VALUE!!!!!!
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