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alstry (35.98)

The CRASHING sound of FU

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March 31, 2009 – Comments (9)

Textron to cut manufacturing production rates

U.S. Jan. Case-Shiller home prices down 19% in past year

Chicago's Sun-Times Media files for Chapter 11

Department store chain Gottschalks to liquidate

Fortis slumps to $37 billion loss on sale of banking operations

As you can see, the FU virus continues to spread.  The Doctor of Alstrynomics warned you.  While the economists are still treating the symptom, Alstrynomics is dealing with the problem.....SUFFOCATING DEBT spreading the FU virus.

58 additional Department Store vacancies in CA and a few Western States....imagine how those landlords feel????  What about the smaller retailers that depended on the anchor traffic???  What about the employees and tax revenues?????

Now the virus is spreading at unprecedented rates around the world.  Few are willing to even deal with the FU epidemic.  Alstrynomics knows until we restructure.....further destruction is inevitable.

Under the current trend, what ever your house is worth today, cut it in half and that is what it will likely be worth in the next two years.

Debt is suffocating the economy.  The Doctor of Alstrynomics has warned you about this while so called experts are trying to loan out more??????  Fewer and fewer able to spend, more and more businesses shutting down, more and more people unemployed.  It is not too difficult to see.

Alstry is a simple guy....until we start dealing with the epidemic of suffocating debt, housing prices will fall at least another 50% and U6 unemployment will likely reach 50%. Hmmmmmmm.

Oh well.............it is not the end of the world.....PREPARE....don't Fear.

9 Comments – Post Your Own

#1) On March 31, 2009 at 10:31 AM, gonelong (35.45) wrote:

Since I missed out on subscribing to your newsletter back in 2008, I am sorry if I am asking you to repeat something you have already stated.  How about a Top 10 list of things to do to prepare, maybe in order of importance?  If you think housing is going to drop by anoterh 50%, do you think selling, and then renting is the answer?  Just curious.

GL

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#2) On March 31, 2009 at 10:37 AM, alstry (35.98) wrote:

Very simple...WWGD

What Would Grandma Do????

1.  Raise Cash

2.  Pay off Debt

3.  Save 2-3 Years of Living Expenses

4.  Buy a little metal if it makes you feel better

5.  Enjoy Life

Really it is only a five step process......

After that, if you want to speculate in the market.....now you are singing my tune....

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#3) On March 31, 2009 at 10:42 AM, biotechmgr (35.74) wrote:

GL, Home prices may deflate by 90% before it is all over.

 I am selling my home this year and will rent until the bottom comes. All asset prices are crushed in a deflation. Unless you are an experienced trader then cash is king despite the inflation fear mongering out there. Short term T-Bills for safety. Some gold and silver.

Taxes and interest rates will increase in the future. Position yourself thusly.

If you need cash in next 5 years you may want to get out of IRA or 401k. Better to take tax at lower rates. Also, Gov might seize them when things really bad.

There will probably be a multi - month bear rally that will return the optimism, but don't fall for it. Another wave of deflation will hit until the bubble is fully worked out. 2009 is the last year to get out of any assets including a home at these prices in our lifetimes.

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#4) On March 31, 2009 at 10:47 AM, biotechmgr (35.74) wrote:

GL, Home prices may deflate by 90% before it is all over.

 I am selling my home this year and will rent until the bottom comes. All asset prices are crushed in a deflation. Unless you are an experienced trader then cash is king despite the inflation fear mongering out there. Short term T-Bills for safety. Some gold and silver.

Taxes and interest rates will increase in the future. Position yourself thusly.

If you need cash in next 5 years you may want to get out of IRA or 401k. Better to take tax at lower rates. Also, Gov might seize them when things really bad.

There will probably be a multi - month bear rally that will return the optimism, but don't fall for it. Another wave of deflation will hit until the bubble is fully worked out. 2009 is the last year to get out of any assets including a home at these prices in our lifetimes.

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#5) On March 31, 2009 at 10:50 AM, saunafool (98.74) wrote:

Alstry,

A few months ago you were only predicting unemployment of 25%. Why so glum today?

I agree, we're totally hosed, but there will be millions of people planting trees and painting schools on the government payrolls long before we reach 50% unemployment.

If it gets to that point, then the only solution is to have a house in the mountains of Idaho with lots of guns and canned food.

I hate canned food.

sf

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#6) On March 31, 2009 at 10:58 AM, alstry (35.98) wrote:

50% U6 and 20-25% U3.....in the end, it is pretty much the same.....it is just a matter of semantics......

You have been around here long enough to understand that the nomenclature of Alstrynomics has subtleties that practicioners appreciate.

 

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#7) On March 31, 2009 at 11:13 AM, RookieQB (29.07) wrote:

Alstry,

 When you suggest to pay off debt are you including the homes?

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#8) On March 31, 2009 at 11:28 AM, alstry (35.98) wrote:

If paying off your mortgage drains all of your cash....than no.....but if you can do it comfortably and still maintain 2-3 years of reserves....than why not.

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#9) On March 31, 2009 at 12:38 PM, RookieQB (29.07) wrote:

I guess I just have a hard time thinking about paying off a loan on a home thats probably going to be worth -40% of the value or more in the next year or so.

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