alstry (35.68)

The Tsunami has arrived

June 28, 2008 – Comments (2)

Some excerpts from a very interesting article:

"You'd have massive changes going on throughout the economy," said Robert Wescott, president of Keybridge Research, a Washington economic analysis firm. "Some activities are just plain going to be shut down."

How much higher would fuel prices have to go before she quit her job? Already, the 170-mile round-trip commute to her job with Los Angeles County Child Support Services in Commerce is costing her close to $1,000 a month -- a fifth of her salary. It's got the 55-year-old thinking about retirement.

"Throughout our history, we have grown on the assumption that energy costs would be low," said Michael Woo, a former Los Angeles city councilman and a current member of the city Planning Commission. "Now that those assumptions are shifting, it changes assumptions about housing, cars and how cities grow."

"To put things in perspective, today's extra shipping cost from East Asia is the equivalent of imposing a 9% tariff on East Asian goods entering North America," said Rubin of CIBC World Markets.

Although white-collar workers may be able to telecommute, they could also take a serious financial hit because soaring energy prices tend to wreak havoc on the stock market. The explosion of 401(k) plans and similar retirement accounts in the last few decades -- and the decline of traditional pensions with guaranteed payouts -- have tied workers' financial futures more closely to stocks than they were during the 1970s oil shocks. A prolonged Wall Street downturn could mean a no-frills retirement, or none at all.

http://www.latimes.com/business/la-fi-oil28-2008jun28,0,5485259.story?page=1

This article contemplates the effects of $200 per barrel oil.  Many of the issues discussed are occuring NOW!!!! 

I blog the way I do because many of these issues could have been spotted months ago.  Our country is shutting down and few of our politicans seem to care.

They tell us the crisis is over, but states who are relatively unaffected by the housing downturn have seen declining taxes for 3 quarters in a row.  Sequential and deteriorating negative trends are not signs of an improvement.....it is not that hard folks.

Unless we wake up and start talking to each other and our politicans, we as a nation will shut down.  We are shutting down right now and the pace is accellerating.  Few seem to understand the problem and those that do are remaining quiet.

If this trend continues our pensions and 401Ks will be worthless.

Quite frankly, at this point, I am not sure there is a solution.  The head of the NY Federal once said in a speech it was like trying to unscramble an egg....I tend to agree with that analogy.

We built up an entire nation over the past twenty years on a business model of cheap oil and easy credit....now both are gone.  Our nations businesses and assets are failing.....and failing at an ever increasing pace.

Houses in a number of areas in America are down 50% in less than two years....and the rate of decline is ACCELLERATING.  Auto sales were down about 15% in the first quarter, they will be down much more than that in the second quarter.  After the recent layoff notices and rising fuel prices, what do you think the third quarter will look like?

The salient issues are finally coming to the front pages of the main stream press.  My blogging will likely slow down in the future because I will not be able to add a much different perspective that what you will be reading everywhere.

I am confident that one day I will be a bull, and when that happens I am also confident that most will be bears, and maybe that will be a good point when the blogging will pick up again.

I will leave with this....as distress rises, our people will demand changes....nationalize this and nationalize that......if we nationalize too much pretty soon the government owns just about everything.

Every major government change in history has started from the grass roots level....often arising out of distress.  We as Americans have struggled and fought hard to arrive where we are today.  We have done many wonderful things and had our fair share of failures.  When times get tough, people start to behave irrationally and are susceptible to suggestion......as a country, during these times we should be careful what we ask for.....we just might get something we never really wanted.

The first signs of change will come from distress.  The people will ask for reforms.  You will also see different branches of the government fighting power among each other.  Each will want to stake out their new role in the new order.  We may hear that it is in our own interests to take away some of our rights for our own protection.  Maybe when our retirement plans get small enough we will nationalize our IRAs and 401Ks so we can all have a better retirement?

The tsunami has started.  You will be reading about it in your press almost everyday going forward.  The noise will get louder and louder as the water gets higher and higher.  Please read critically.  Hope you can surf.