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alstry (35.38)

The Beginning or End?

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April 11, 2008 – Comments (1)

Three months ago Mr. Paulson said everything was great, now he says the economy is slowing rapidly.  Many say we face the worst financial crisis since The Great Depression.

Consumer confidence is at a record low.  Jobs are being lost everyday.  The government budget deficits are running at record highs due to slowing revenues.  Hundreds of billions continue to be spent overseas.

Five US Airlines have declared BK and/or shut down in the past week.  Frontier being the latest today.  Many other planes are being taken out of service for inspection.  One restaurant chain filed last week closing units and another retailer, Linens n Things is reportedly about to file.

Unemployment has jumped to over 5%.  Many financial companies which once accounted for about 40% of the S&P's earnings are reporting HUGE losses.

Wages are stagnant or declining.  Oil is over $110 per barrel.  Gas is at record highs.  Food prices are skyrocketing.  Import inflation will be reported today. 

If financial companies are reporting billions of dollars in losses now, how big will the losses grow to if the economy slows further?  Could Alstry's estimate that the S&P's earnings will be down 50% as opposed to current consensus of growth be on target as the year plays out?

If this is just the beginning of the downturn, things could get really ugly.  If it is the end, then the sun should be shining soon.

Let the sunshine in.  Let the sunshine.........................

1 Comments – Post Your Own

#1) On April 11, 2008 at 11:42 AM, TDRH (99.66) wrote:

Hard to see the light at the end of the tunnel.   Unemployment is still relatively low, what happens to the foreclosure rate when the economy slows and unemployment increases?   Good time to be solvent and liquid.  Buffet has got to be licking his chops.

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