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alstry (< 20)

Why 30% the FU virus Fools



May 06, 2009 – Comments (8)

We have a very serious pandemic....and its not H1N1 is the FU virus!!!!!!!!!! 

Right now we are around 16.2% un/under employment.....

We are seeing company after company report REVENUES DOWN 20%....30%.....40% AND MORE.....

R.R. Donnelley profit down 92% on charges, slower demand

The Chicago-based commercial printer said first-quarter net earnings of $13.9 million, or 7 cents a share, down from $182.5 million, or 85 cents, earned a year ago when a federal tax settlement boosted its profit. Sales for the quarter fell 18% to $2.5 billion.

With profits down 92% and sales down 18%.......clearly cutting employees is a likely outcome to bring business expenses into balance with sales.  This is happening in industry after industry....

New Home Construction is DOWN over 70%.......Autos DOWN over 50%.......and many many industries are down 10% to 30%........

The effect is finally hitting tax revenues which are now seeing double digit declines all around the nation.........

In addition to firing employees....we are seeing massive wage cuts as well.....but these cuts will not be reflected in unemployment numbers even though they will have a massive impact on spending and revenues.

How long can the consumer hold out????  Until their savings and borrowing capacity runs out.....for many, we are reaching the end of the line after a long struggle with the FU virus.

Soon we are likely to shut 5000 to 7000 auto dealerships to compensate for lower auto sales.  The impact will be matter how many windmills we stick in the ground.

As we move into the seems like a no brainer that unemployment will top 20%.....the RR Donnelley release above butresses the projection and adding a new industry....printing.... to autos, construction, airlines, hotels, retail, government, healthcare, technology and many others getting sick from the FU virus.


8 Comments – Post Your Own

#1) On May 06, 2009 at 4:22 PM, alstry (< 20) wrote:

SAN FRANCISCO (MarketWatch) - Cisco Systems on Wednesday reported a fiscal third-quarter of $1.35 billion, or 23 cents a share, compared with a profit of $1.77 billion, or 29 cents a share, for the year-earlier period. Revenue was $8.16 billion, down from $9.79 billion, for the same period last year.

Cisco....the mother of all GROWTH companies is now suffering from the FU virus and watching revenues evaporate over 15%.......

If Cisco's sales DOWN over 15%.....imagine what is ahead....

Prepare....Don't Fear......

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#2) On May 06, 2009 at 5:04 PM, alstry (< 20) wrote:

THE TREND IS YOUR ENEMY!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

Cisco CEO: Sees FY4Q Sales Down 17%-20% Over A Year Ago


It appears sales conditions are deteriorating at Cisco....OUCH!!!!!!

Zombie banks creating Zombie Nation...........FU virus EVERYWHERE now.......

Prepare for the Pandemic!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

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#3) On May 06, 2009 at 5:08 PM, automaticaev (< 20) wrote:

everyone needs to build lvl 5 bio shelters under their basement now!!!!!

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#4) On May 06, 2009 at 5:11 PM, alstry (< 20) wrote:

actually...the FU virus is not impeded by bio shelters as it doesn't have bioglogical is an economic disease that trumps pretty much everything else.

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#5) On May 06, 2009 at 5:15 PM, automaticaev (< 20) wrote:

its still a good idea to construct one under your basement now; for when you need it.

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#6) On May 06, 2009 at 5:44 PM, StKitt (28.49) wrote:

We should all have a bio shelter to starve in...

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#7) On May 06, 2009 at 5:47 PM, automaticaev (< 20) wrote:

thats why you buy survival seeds.

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#8) On May 06, 2009 at 11:01 PM, StopLaughing (< 20) wrote:

Why Alstry is probably wrong.

Alstry's main premise will be right some day. Just not today. Maybe after a nuclear winter or some other major event. 

1. The unemployment numbers from the great depression ( 25 %) probably dramatically understate the true level of unemployment for that time. It will take a lot higher level than U6 at 25 % to melt down this current economy. 

2. During the Reagan years this country sustained several years of high unemployment and plugged along. Society did not break down. 

3. Japan's economy has hit bottom. Most international mutual funds display a chart pattern that clearly indicates they have broken thier Bear trend lines. They are leading the S and P. 

4. You can get Keyensian economics to work in the short run. There may be another recession (most likely stagflation) in a year to two, but this is not the great depression redux.

5. Most people have realized that this is not the great depression redux but just a recession. We are down about as far as we should be in a recession. 666 was an irrational panic. 

6. The purchasing  power and the level of employment as a percent of the work force has held up fairly well. Ditto for GDP and other non employment indicators. 

7. Bernanski and Paulsen created a liquidity crisis by letting Lehman Bros go bankrupt. That is fixed. We now have the oil spike effects and housing bubble to deal with but that is not nearly as lethal as a liquidity crisis. 

8. Consumer confidence is back up and businesses are ordering goods to fill inventories. 

9. This crisis was mainly induced by incompetent government,  excessive debt by banks, the shadow banking system, and the use of credit swaps and other derivatives to create defacto naked short raids on the banks.

10 After raiding 1/2 of the value of the world's 401 Ks the shadow banking system decided to go long, publically told everyone we had bottomed, went long and then with in a week Obama decided to go positive. 

11. The market is not acting right from a technical perspective. That is because the Obama admin controls parts of the news and the timing of the news. Not to mention both monetary and fiscal policy. Obama and the Dems can't pass thier agenda without a stock recovery. 

12. Obama just bought BA or at least 34 Billion of it. He just bet the Dem Party future on BA. Why would not investors go long BA? He can't afford to lose money on BA or the Reps will kill him politically. 

13. With interest rates near decade lows, you would expect the P/E ratios at the bottom to be higher than in past bottoms. Basic finance theory indicates that the price of stocks and interest rates have an inverse relationship (sometimes lagged). 

Some Day Alstry will be right, but right now I am enjoying the ride. The market may have some down drafts but this is not the great depression (unless there is a terrorist attack or limited nuclear winter etc).



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