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alstry (36.17)

The Great Depression Deja Vu????? tens of thousands of jobs gone!!!!!!!

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May 06, 2009 – Comments (5)

May 6 (Bloomberg) -- The drought in California’s Central Valley is so severe that it’s drying up money for haircuts.

One customer waited six months to get a $10 haircut, then asked to have his head shaved so he could wait another six months, said Armando Ramirez, a barber in Firebaugh.

“People come in and say, ‘Hey Armando, how about I give you a dollar for a cut, it’s all I have,’” said Ramirez, 63, who has owned his shop for four decades. “Saturday is supposed to be my busiest day, but I’m lucky if I get one customer before I go to lunch.”

Businesses are casualties of the three-year drought that is forcing farmers to leave hundreds of thousands of acres fallow in the Central Valley, the semi-arid agricultural region running 400 miles (600 kilometers) down the middle of the state. The drought may cost the valley 35,000 jobs and $959 million in lost revenue this year, said Richard Howitt, chairman of agricultural and resource economics at the University of California, Davis.

“I’ve never seen a drought this bad,” said Bob Diedrich, who has been farming near Firebaugh, 140 miles southeast of San Francisco, since 1973. “It’s putting a chokehold on us.”

Diedrich laid off all five of his full-time workers in anticipation of receiving no water this year to irrigate the 1,000 acres (400 hectares) of land where he grows almonds and tomatoes. The U.S. Bureau of Reclamation in February cut off water deliveries to Central Valley farmers for the first time in 15 years because reservoir levels were low. The reservoirs collect rain and melted snowpack from the Sierra Nevada for transport to farm irrigation systems.

Multiplier Effect

Farms hire workers for planting, picking, sorting, packing and other jobs. Most wages are spent locally, so when fields aren’t cultivated it hurts stores and other businesses, and a multiplier effect rolls through the economy, Howitt said.

“Our mom-and-pop shops are hurting,” said Hope Morikawa, director of the Hanford Chamber of Commerce, 30 miles south of Fresno, which has lost dozens of its 700 members this year and began offering its services for free.

Stacey Marshall can look out the window of her women’s clothing boutique in Hanford and see four empty storefronts.

“We’ve lost the scrapbook store, a cigar store and the bakery,” said Marshall, whose sales are dropping at a rate of about 13 percent this year. “The wine cellar and Boogie’s, a restaurant, closed.”

http://www.bloomberg.com/apps/news?pid=20601109&sid=a8X3k8FhImlc&refer=home

We will likely lose hundreds of thousands of jobs from the Auto Bankruptcies....now tens of thousands of jobs from the Central Valley drought.....

and millions of jobs from revenues drying up to municipalities???????

Stay tuned.........stay focused........and Prepare!!!!!!!!!!!!!!!!!!!!!!!!!!!!

5 Comments – Post Your Own

#1) On May 06, 2009 at 9:44 AM, alstry (36.17) wrote:

Welcome to Alstrynomics 2009.

Depression conditioins in Central Valley California....Depression Conditions in the Midwest as a result of Auto Industry slowdowns and shutdowns.......Depression Conditions in the South due to housing imploding........

As Alstry told you.....the FU virus is spreading........and there is nothing funny about it.......

Pay Attention and Prepare.....NEVER FEAR!!!!!!!!!!!!!!!!!!!!!!!

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#2) On May 06, 2009 at 11:45 AM, finabuddy (95.51) wrote:

Interesting news with a sensationalist spin. I dont know if losing a few thousand seasonal jobs in a dry region in a season equates to a great depression. But I did like throwing in the popular auto bankruptcy end of the world at the end to lend some sort of validation to this doom and gloom pandering.

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#3) On May 06, 2009 at 11:57 AM, mliu01 (< 20) wrote:

Alstry, You should read the ADP report. Less bad and green shoots.  We are living in two totally different world now. WTF. When there are so many liars on tv, I sometimes have doubts in myself. It is ridiculous.

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#4) On May 06, 2009 at 1:58 PM, alstry (36.17) wrote:

fina,

Its not doom and gloom....simply reporting the facts......

The FU virus is spreading globally and few are seemingly trying to contain it.

T minus two days for the unemployment report.

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#5) On May 06, 2009 at 2:16 PM, angusthermopylae (40.53) wrote:

finabuddy

I would say that the implications are pretty widespread.  Being a small-farm type myself, I can see it playing out like this:

--Fewer crops planted in May.

  --Local economy down, because those lost wages don't get spent in the community.

  --Same effect for the communities of the migrant workers ("migrant" in that they are not locals...nothing to do with country of origin...)

--Come August-September, fewer crops harvested.

  --Again, local economy takes a hit.  I would expect next year there will be even fewer farms, because some won't survive the winter.

  --Shortage of produce nationwide.  Higher costs for grocery stores, restaurants, schools, prisons, military mess halls..

  --Those higher prices force either closings (because of costs) or price inflation (to keep margins above water)

--Bad 2-3 quarters for produce-dependent sectors.  Come October and January, I'd expect restaurants to drop across the board.  School systems will have to stretch the food budgets, supplying poorer quality food to make sure they have enough for everyone.

--Employment in the restaurant sector will take a dive...either as fewer jobs or smaller wages...or both.

 

So, if this plays out on a large scale, I would advise getting out of (or shorting) the restaurant sector come September or so.  "Alternative" food stuffs that are cheap and plentiful might turn out better:  Rice, potatoes, wheat.  Of course, that depends on how the same scenario plays out in Arkansas, Kansas, and other areas...

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