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alstry (< 20)

Is America Shutting Down?



July 30, 2009 – Comments (4)

Sales Crashing...Business and Personal Bankruptcies Skyrocketing....States contemplating selling assets just to stay in business.....and weekly jobless claims STILL OVER 500K per week and rising!!!!!!

Our buddy portefeuille had this comment about a PE over 700:

I guess 723 is supposed to look scary. I hope people are aware of how fractions work. Say P = 1000 (that would be the S&P index in this case).

For aggregate earnings of E = (200,100,10,1,0,-1,-10,-100,-200) you get P/E = (5,10,100,1000,infty,-1000,-100,-10,-5).

So a P/E of 1000 or 10000000 or 10000000000000000000 is not much "scarier" than one of 100. The earnings E are not very different. Scare numbers would be small negative ones, like -5.

So the next time you want to scare an audience that remembers 1st grade mathematics try something like

Yes my friend it is 1st grade math....once you get to this level...really earnings are approaching ZERO...Z-E-R-O.......Nothing....Nada...

And when you are earning NOTHING you pay no taxes....and when you don't pay taxes government must cut.....

And since Government is HALF the GDP with a collective $6.5 Trillion dollar spend......what does that forecast for the future???

4 Comments – Post Your Own

#1) On July 30, 2009 at 9:24 AM, alstry (< 20) wrote:

Is America's Justice System shuttng down???

We are seeing this trend accellerating around the country:

California courts to close 1 day a month


They will be dark on the third Wednesday of every month, beginning in September and continuing through June. Judges also are asked to take voluntary furloughs because of budget cuts. Report this comment
#2) On July 30, 2009 at 10:35 AM, prose976 (< 20) wrote:

Here's a prediction for you Alstry:

The jobless recovery is in full swing.  Most of the jobs that are lost (or being lost) are "fluff" jobs, non-essential jobs that needed to be cut from payroll anyways.  It took a recession to wake companies up to the reality that they were padding their rosters with alot of employees who were actually spending 20% of every day standing around the water cooler, showing up late, having in-office parties, taking extra long lunches, leaving early, taking Friday's off, etc.

So, these employees were actually a lag on business, rather than a catalyst to them.

Businesses which are closing/going bankrupt are those that were run poorly or had sub-par/frivolous services.

So these businesses were actually running on the fringes anyway, and nobody will miss them.

Many displaced workers will never get jobs again...they'll just use their unemployment compensation up and stay home with the kids or become a one-income family.

Many closed businesses will never open again because the people running them realize they shouldn't have been running a business in the first place.

People who do re-enter the workforce will need to make sure they are essential and pulling a true load.  Competition for qualified workers will be tremendous which will spur candidates to hone their skills and seek education to make sure they can compete in a more competitive workforce.

Companies will watch their compensation more carefully to ensure that pay is more realistic.

Some unemployed will create new business.  Some will become private contractors.  Companies will use private contractors to keep their overhead costs down.

Governments like California will lay off workers, and many of those positions will be cut from government, reducing the size of government.  Many of these ex-government employees will finally understand that the government is not your friend.

Courts will process fewer claims, and the frivolous cases will be put last on the dockets, thus reducing the incentive to file frivolous claims.

Government will be cut across the board, shrinking this country's dependence on government in many areas, and in effect, shrinking deficits, forcing governments to become leaner and more efficient, cutting much of the fat.

This recession is a wake up call, not a sentence to our ultimate demise.  Local, State and Federal governments are on center stage.  They can no longer deny their wasteful ways, and the people are suffering because of their wasteful ways.  Families have been hurting, because governments and the economy has insisted that both parents must be out there in a cubicle, producing, producing, producing.

The brightest spots in this country were marked by a single worker outside the home, a home maker and kids being raised by Mom or Dad.  There will be a resurgence of this when people realize they are actually better off with one person bringing in a salary and the other taking care of the home.

The whole idea that we need to re-bloat our workforce, government payrolls, housing market, businesses, etc. is absurd.

Let's face it, everything has been blown out of proportion.  Excess has been the name of the game for so long that it become the "normal."  But it hasn't been normal for a long time.  Now, with this recession, maybe things can get back to normal.

Let's see what happens.

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#3) On July 30, 2009 at 10:39 AM, alstry (< 20) wrote:

I have no problem with the above analysis.....the problem is we have to structure our nation to the above.

Based on where we are now, that is a lot of restructuring......much of which our population is not prepared to handle.

Preparation is the key.....and right now there is very little seeming coming out of where it should be.

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#4) On July 30, 2009 at 11:40 AM, davejh23 (< 20) wrote:

"The brightest spots in this country were marked by a single worker outside the home, a home maker and kids being raised by Mom or Dad.  There will be a resurgence of this when people realize they are actually better off with one person bringing in a salary and the other taking care of the home."

I agree with this 100%, but I don't see this kind of restructuring coming any time soon.  How long will it take for a shift like this to play out?...a reversion to mostly single income homes?...millions of workers dropping out of the workforce?...all while gov't is trying to re-inflate an economy that probably needs to shrink by a large percentage, and gov't spend that needs to shrink by 50%.

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