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alstry (35.03)

Longer and Deeper-Just Can't Get No Satisfaction

Recs

8

May 25, 2008 – Comments (8)

http://www.youtube.com/watch?v=rCZrevYdgis

For a few months, some have been warning you about a potential storm coming more severe than most think.  Many laughed and screamed blasphemy......but if we don't prepare.... prepare to be washed out to sea.

Ford is cutting production 15%.  Ford's revenues is over 1% of GDP.  That is a big number for those mathematically challenged.  Think of the downstream impact on a 15% cutback on Ford's employees, suppliers, advertising, trucking, ect....

MarketWatch this weekend has an article about the rising tide of bank failures.  On Friday, the City of Vallejo declared BK.  Jefferson County AL wants to default on its SWAP obligations alleging fraud by JP Morgan....otherwise Jefferson County may go BK....three times bigger than Orange County.

Soros is saying it is going to be worse than '73.  Mobility in America is coming to a crawl.  Amreican Airlines is cutting back on planes and service...firing thousands of workers.  Other airlines going bankrupt.  Miles driven by vehicles falling off a cliff even though our population is growing.  CA gas tax revenues falling even though gas prices through the roof.

The above is when we have low reported unemployment.....imagine the effect later this summer when the job cuts really kick in and more and more debt defaults.

Then, this weekend in Germany, our superstar buddy Warren pipes in with the following:

 

BERLIN (Reuters) - The United States is already in a recession and it will be longer as well as deeper than many people expect, U.S. investor Warren Buffett said in an interview published in German magazine Der Spiegel on Saturday.

He said the United States was "already in recession" and added: "Perhaps not in the sense that economists would define it" with two consecutive quarters of negative growth.

"But the people are already feeling the effects," said Buffett, the world's richest man. "It will be deeper and last longer than many think."

....

Buffett also renewed his criticism of derivatives trading.

"It's not right that hundreds of thousands of jobs are being eliminated, that entire industrial sectors in the real economy are being wiped out by financial bets even though the sectors are actually in good health."

Buffett complained about the lack of effective controls.

"That's the problem," he said. "You can't steer it, you can't regulate it anymore. You can't get the genie back in the bottle."

Yes folks, the genie is out of the bottle.....and he just can't get no satisfaction.

Pretty Soon....We will have to start looking for a Hero!!!!!  Who could that be?

http://www.youtube.com/watch?v=VeMmtP5Ory8&feature=related

8 Comments – Post Your Own

#1) On May 25, 2008 at 1:23 PM, alstry (35.03) wrote:

TMF Jake,

For some reason whey you posted your comment, it froze up the comment section.  I have few computer skills so I can't explain it.  Still working on the embed because for some reason I can't import.

Either way, you have now found an easy way to shut me up;)

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#2) On May 25, 2008 at 1:55 PM, alstry (35.03) wrote:

THE PROBLEM IN A NUTSHELL

“Consider this. Forever in American economics, the mantra was that “consumer spending is two-thirds of the economy.” Yet, during the last decade, that share climbed to 71 percent, the highest on record, a shift equivalent to $575 billion today.”

“At the same time, real incomes for most families were flat. Even though the 2000s have been a period of fast productivity growth, the nation’s real median income - the income of the family smack dab in the middle of the income scale - was actually a bit lower in 2007 than in 2000.”

“As incomes stagnated for many yet consumption soared, we made up the difference with borrowing. Household debt, including mortgages, just about doubled in seven short years (2000-07), from $7.4 trillion to $14.4 trillion.”

http://www.philly.com/inquirer/currents/20080525_A_nation_of_borrowers.html

Now our credit is dying up.  We were using credit to service debt.  With stagnant incomes, little available credit, and double the debt.....how are we going to service the extra $7 Trillion in debt?

How all of saying at the same time:  BANKRUPTCY!!!

The Crowd is Cheering!!!! Help Me Rhonda!!!!!!!

http://www.youtube.com/watch?v=dAq_b24unjg&feature=related

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#3) On May 25, 2008 at 2:15 PM, thisthatother47 (90.12) wrote:

Yes, I wanted to comment on the blasphemy - of picking something other than Total Eclipse of the Heart from Bonnie Tyler.

(embed test below with Rhonda...)

 http://www.youtube.com/v/dAq_b24unjg&hl=en"> name="wmode" value="transparent">http://www.youtube.com/v/dAq_b24unjg&hl=en" type="application/x-shockwave-flash" wmode="transparent" width="425" height="355">

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#4) On May 25, 2008 at 3:30 PM, alstry (35.03) wrote:

Looks like you have the same issue too with the embed.....and you are a fricken actuary.  You should be ashamed of yourself with that kind of a math background.

But here is how the math works when credit drys up:

“That old, rusty, $200-dollar charcoal grill abandoned in the backyard is pretty dilapidated - maybe even shameful, you might say. But it’s looking pretty good right now.”

“‘People are replacing knobs, flavor grades, burners - all kinds of things,’ said Antonio Fernandez, sales manager at Thompson Building Materials in Fontana. ‘It’s about saving money.’”

“‘Most people come in, they look, we quote them, and they take the brochure,’ he said. ‘The situation is hard for everybody.’”

“Ontario barbecue-island retailer Pete Estrada cashed in on record barbecue sales last summer from homeowners flush with home-equity lines of credit. Carefree customers strolled in with $10,000 checks in hand.”

“But last year’s numbers make this year’s look depressing.”

“‘When the (home) foreclosures came, that just killed my market,’ said Estrada, the owner of Island BBQ World. ‘I’m getting a few people coming back. They’ve decided, `Well, we can’t move, so now we’ll do something in the backyard.’”

“He added: ‘Nowadays, people think they’re going to die in that house because they can’t afford to move. They’re investing more into their backyards.’”

“During the housing boom, barbecue sales made up 10 percent of San Bernardino Fireplace’s total sales figures. The store sells wood stoves and fireplaces. The shop is usually swamped with barbecue shoppers two weeks leading up to Memorial Day. Not this year.”

“‘”We’re so far off,’ said Noah Perry, manager of the San Bernardino store. ‘Not much is moving. People are patching together their old barbecues. We’re selling more parts than anything else.’”

“Perry reminisces about the golden days of record barbecue sales. ‘Back then there was no hesitation. People saw it and said, ‘I want that,’ Perry said. ‘Now people are trying to save a buck and going with charcoal instead of gas.’”

http://www2.redlandsdailyfacts.com/sanbernardinocounty/ci_9374122

Based on my surveys, it is getting pretty hairy out there right now.  The above article is pretty reflective. 

Mommy, the water is really getting high.....are you sure that is just a big wave?

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#5) On May 25, 2008 at 9:01 PM, TMFJake (76.05) wrote:

Alstry, hmm, I had no problem with the comment box on your previous post.  I'll do some more testing to see if I can recreate the problem.  But I do like this new power over you, that's for sure. ;) --jk

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#6) On May 25, 2008 at 9:10 PM, alstry (35.03) wrote:

Hey, you are welcome at the table any time....just bring lots of chips:)

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#7) On May 25, 2008 at 11:19 PM, thisthatother47 (90.12) wrote:

Yes, I saw that didn't work.  Not my fault though, did exactly what youtube says to do, click on the embed box and copy it over - not that hard, so not sure what went wrong - actuarially speaking.

 I have the same problem on your prior blog, the place to add a comment is just gone.

As for the blog, I'm hearing similar stories and other anecdotal thoughts about how this "feels" like it did in the late 20's...

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#8) On May 26, 2008 at 12:04 AM, alstry (35.03) wrote:

I remember the late 20's....those were interestng times indeed.

 

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