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alstry (36.12)

Why 30-50% Unemployment Coming

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September 30, 2008 – Comments (13)

When I was telling you guys six months ago we were facing something unprecedented....few understood or believed.  I doubt there are many in the country who have spent as much time analyzing and/or undertand this issue as Alstry.  Once our nation realizes how dependant our economy became on easy credit...and how it infected practically every aspect of commerce..then and only then will they realize how dire the outcome will be once credit is removed and we are forced by the bankers to pay back the debt as they receive government handouts.

From peak new house construction is DOWN over 66% from over 1.5 million units to under 500K.  Those employed in real estate sales and the mortgage industry are also down 50% or more.  After the fourth quarter of this year, commercial construction is going to come to a grinding halt from peak.

Just in the Real Estate Sector.....we are likely going to see at least 50% umemployment....a sector that employs millions and millions of people.

This is spilling over into finance.  Banks, Investment Firms, Brokerages, ect.....are going bankrupt and laying off hundreds of thousands of workers.  Lending is grinding to a trickle...not because there is no money to lend....but most of the lending to unqualified borrowers is no longer being issued.  Toxic lending made up most of the lending in recent years and was the driving force of our economic growth.

Auto Sales are already down about 40% from peak.  Dealers are shutting down accross the country and parts suppliers are contracting as well.  This has had a profound impact on trucking and warehousing.

Airlines are shutting down and/or dramtically cutting flights this Fall.  My estimation is capacity will be down at least 30% and maybe more.  This will have a strong effect on hotels, tourism, and business entertainment revenues. 

As a result of the above, cities and state tax revenues will contract.  We are already starting to see significant revenue shortfalls and layoffs beginning.  Expect local governments to cut budgets at least by 1/3 as property tax, income tax, and sales tax revenues evaporate.

The above will have a significant impact on retail and retail related businesses.  We have already seen some slowing.  My guess is that it is only beginning.

If you take just the above you can see where this is going.  It is not pretty.  Unless we restructure, reorganize and recapitalize right now......we are going to face issues that we have never seen in our nation.

The politicians and bankers are either ignorant or lying to you.  In the end....a few will own America and we and our children will be subject to servitude for the rest of our lives.

Look around and wake up....America is shutting down.  A few of us can see what is coming.  Unless we return the the fundemental constitutional principals that our forefathers created....ours will become a nation owned by the few controlling the many.  Our democratic republic will be gone and we will end up in an ism...you pick...facism, socialism, communism....I am not sure which one...but it will be one for sure when the many start to revolt because they don't have enough food on the table to feed their families.

Without a doubt this is the most dangerous time in American History....not because of an enemy without...but because of an enemy within.  If you don't see the problems yet...I promise you will soon if we continue down the same path...

This is not a Democratic or Republican Issue....both sides are missing the mark.....although not perfect...Ron Paul is as close as you get on the economic issues.

We must stop the madness of subsidizing the few at the expense of the many.

Some thought I was kidding when I was warning this was the worst financial crisis since The Great Depression.....now get ready for an unemployment rate never seen in The Great Depression.  Back then our manufacturing base was growing and we were innovating with little debt in our society.  Now, we are leveraged to the gills and have shipped much productivity overseas and kept the service businesses that was dependant on easy credit.  Now that easy credit is gone....so will the those businesses and the jobs.

Start being nicer to your neighbors...we will need each other as things deteriorate.  Hopefully that will be a positive by product of the coming distress.  I can think of others....but that is a good start.

 

13 Comments – Post Your Own

#1) On September 30, 2008 at 11:31 PM, StatsGeek (29.39) wrote:

Again, Alstry, it is very unfortunate that I have to agree with you.  What is weird is how obvious this all seems to me and how slow everyone else is to get it.

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#2) On September 30, 2008 at 11:39 PM, alstry (36.12) wrote:

You think this is wierd to you??? I have run this issue by ex CEO's of public companies, seasoned significant real estate investors, lawyers, doctors, joe six packs, and many more....and few seemed to get it......

But if I have a bias...women seem to be quicker to understand the problem over men.....it is almost as if there is a denial mechanism in men's psyche......and the wealthier the individual....the more difficult for him to understand.

I guess it is sort of one of those pictures hidden in a maze of little pictures....once you see it....the bigger picture becomes obvious.

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#3) On September 30, 2008 at 11:44 PM, angusthermopylae (39.53) wrote:

My county--Scioto County, OH--has already instituted a 10% across the board cut in all departments.

(Un)fortunately, this is mostly due to the mismanagement of the state funds--the last word a couple of months ago is that Ohio will have a $733 million budget shortfall...no ifs, ands, or buts.

And all that was before the rest of this mess got underway.

The only saving grace for this county is that there are several major projects in the works for the next year or so.  MMK is working on building a $1.4 billion steel plant here.  Rumors are that the rail yard here will gear up again (long, dark history on that one).  The Piketon enrichment plant just got a $1 billion project approved.  And a couple of other items are in the works.

Sadly, the rest of Ohio is in poor shape with taxes, revenues, and jobs.  I can only extrapolate from what I see locally, but  it looks like the next 4-5 years are going to really hurt for the entire country.

After that...maybe a bright new day.  But then, no one probably thought the dark ages were going to last that long, did they?

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#4) On September 30, 2008 at 11:46 PM, awallejr (81.36) wrote:

People aren't "slow" to get it. It is typical exageration.  While certain industires are shrinking, Alstry forgets that other areas are growing, particularly centering around the aging of America. Start figuring out what an elderly population needs and that is where you will make the money.  That is going to be what, over 1/4 of the total population?

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#5) On September 30, 2008 at 11:58 PM, alstry (36.12) wrote:

awallejr,

if the elderly population is broke....how will you make money servicing them????  There are many starving people in the world due to poverty....how will you make money selling them food????

What areas are growing and what percentage of GDP and the population do they employ?  I am confident you will find them to be very small on both accounts.

My guess is that you will respond with health care.  Health care consumes about 20% of our GDP vs. less then 10% in other industrialized nations.  As our economy slows.....I have little doubt that our healthcare system will shrink to the relative percentage of other advanced industrial nations.

Get ready for much lower fees, profits and lower wages in the health care industry....this one has little doubt as there will be less money.

Natural Resources/AG...we are talking only single digit percentages.

We are a service economy that has borrowed its way into bankruptcy....NOW ITS TIME TO RESTRUCTURE before we enter hyperinflation in everyone is broke.

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#6) On October 01, 2008 at 12:09 AM, awallejr (81.36) wrote:

Who said the elderly are broke?  Their houses are probably fully paid for.  They have pension plans.  They actually save.  The housing bubble isn't with the 60+ crowd,  it was from the 20-30+ crowd buying things their wage growth couldn't cover.

And as an aside,  there is a serious shortage of nursing and this will only continue to worsen.  We are basically trying to import them from India, Phillipines and even Russia.

It isn't just health care.  You will see a tremendous shifts in spending targets.  Figure out where these people will be spending their money.  It isn't on Ipods or xboxes.

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#7) On October 01, 2008 at 12:20 AM, alstry (36.12) wrote:

This is an area that I have a lot of knowledge.

There are many middle class elderly that own their own homes free and clear and receive a decent pension (+/- $30K) and social security.

However, due to rising property taxes, insurance, health care, food and fuel....many elderly are being forced to sell their homes...or take out reverse mortgages just to make ends meet.  This problem is especially bad in Florida where homeowners insurance has exploded.

I am not kidding about this and you can google the issue as a number of articles on the subject have been written recently.

In addition, with the deterioration in the credit and equity markets....many pensions are now in danger of running out of money.....you may want to look at the funding and actuarial projections on pension plans at the end of this quarter...you may be shocked.

Without money you can't spend.....and America is running out of money very fast while are debt grows and grows and grows.

And now our government wants to put us in even more debt to pay off a few bankers????

 

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#8) On October 01, 2008 at 12:42 AM, awallejr (81.36) wrote:

Actually reverse mortgages are a good idea, ignoring inheritance issues.  But those taking out reverse mortgages tend to be people only on social security.  Medicaire covers most costs atm, with a supplemental policy from, say, AARP. No you aren't seeing people losing their homes because of property tax increases, especially since many states allow enhanced property tax reductions to the elderly (such as NY with their enhanced Star program).  And as for food and fuel, no they aren't being thrown into bankruptcy over this.

As usual, you just throw out exaggerated numbers.  Kind of reminds me of the theory the more outrageous the lie the more likely people will believe it.

 

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#9) On October 01, 2008 at 12:44 AM, russiangambit (29.42) wrote:

Depressing. I guess, the upside is that I always can go back to Russia, they don't have enough people.

Healthcare spending being 20% of GDP is outrageous. Healthcare is not safe, not at all. I know full cost of my insurance through the company is $800 a month. There is no way I would pay that much out of pocket. It is some poor's person salary. And that is already a reduced negotiated group rate for a Fortune 500.

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#10) On October 01, 2008 at 1:21 AM, alstry (36.12) wrote:

Just Google "elderly bankrupcty"  and read until your hearts content.

This is a very serious problem in America.  One that has very serious economic and social implications.

No exaggeration....just the truth handed to you on a silver platter.

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#11) On October 01, 2008 at 1:32 AM, awallejr (81.36) wrote:

Yes, google and cherry pick.  One article says 14% of elderly will be hurting, but good portion are on just social securtiy, but own homes basically paid for.  Reverse mortgage is perfect for those.  Rest have pensions plus social security.  With all being covered with at least medicaire for medical coverage. 

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#12) On October 01, 2008 at 2:38 AM, cbwang888 (25.55) wrote:

I don't believe that 30~50% number. I think it would be very serious if the number reach 15% for the entire nation.

 

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#13) On October 01, 2008 at 3:42 AM, pjani06 (29.34) wrote:

the last thing we need to do is add fuel to the fire.  America needs to preserve the wealth it has today...

very imporant video. 

link to original post (minutes ago) HIDDEN within the text of the Bailout - FOREIGN bank bailout - an OUTRAGE for America

please watch. 

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