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alstry (35.45)

Why Alstry is So Alstry

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December 10, 2008 – Comments (20)

I warned..... if you are using the past a a reference, you are looking in the wrong place.  What we are about to face we have never seen before.....I have been telling you this for months........soon.....I am confident very soon.......you will believe..........

The Treasury Department is considering novel approaches to debt management, said Karthik Ramanathan, Treasury's point-man on debt issues on Wednesday. "As we move forward in thinking about how to potentially raise a significant amount of debt over a relatively short period of time, we recognize that we may need to progress beyond the conventional means of the past, particularly if our borrowing needs do indeed reach the upper end of market estimates," Ramanathan said in a speech in New York. Wall Street analysts have forecast that the federal budget deficit could reach almost $2 trillion this fiscal year as a large fiscal stimulus package is being considered by President-elect Barack Obama on top of the $700 billion financial market rescue plan.

http://www.marketwatch.com/news/story/US-Treasury-aide-hints-new/story.aspx?guid=%7B9584146C%2D913C%2D43D8%2D89FD%2D4750CBF4A551%7D&dist=hplatest

Either your savings is about to become practically worthless............or............well you know.

A $2 Trillion dollar deficit??????  A $100 Loaf of Bread???????

Hang on.....it is going to be one heck of a ride........who knows to where...........but one heck of a ride.

20 Comments – Post Your Own

#1) On December 10, 2008 at 5:43 PM, alstry (35.45) wrote:

Woolworths will hold a closing down sale tomorrow after administrators failed to find a buyer for the company's 813-store retail chain.

Deloitte, the administrator of the store, announced this evening that although negotiations are ongoing it would close the chain, which fell into administration last month.

The administrator made the announcement after informing Woolworths' staff. The closure of the stores makes mass redundancies likely. The group employs 30,000 people, approximately 25,000 of whom work in the retail arm.

http://business.timesonline.co.uk/tol/business/industry_sectors/retailing/article5320013.ece

As I said, this is not a US only issue.  30K jobs.....even I think that is a lot.

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#2) On December 10, 2008 at 6:10 PM, alstry (35.45) wrote:

From Mish's Blog.....

Goldman Sachs Group Inc., one of the top five U.S. municipal bond underwriters, is angering politicians and public-finance officials in New Jersey, Wisconsin, California and Florida by recommending that investors purchase credit-default swaps to bet against 11 states’ debt.

Bets against public debt, once unheard of on bonds considered safe enough for retirees, have soared as the National Conference of State Legislatures projects recession-fueled budget crises will cause $97 billion of shortfalls nationwide over the next 18 to 24 months.

It’s “disturbing” to advise investors to bet against the financial health of a state whose bonds Goldman helps sell, Assemblyman Gary S. Schaer, a Democrat who chairs the Financial Institutions and Insurance Committee, said last week in a letter to Chief Executive Officer Lloyd C. Blankfein.

Anyone remember when the last time a state went bankrupt????  I thought so.......then stop looking backwards.

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#3) On December 10, 2008 at 6:27 PM, alstry (35.45) wrote:

THE SKY REALLY IS FALLING

Sacramento, Calif. – California lawmakers just got a Henry Paulson-like ultimatum from state officials: If they don't act, the state could be forced to suspend road, bridge, and other public-works projects as early as next week. Come March, California will be out of cash for even day-to-day operations.

A confluence of the national recession and years of legislative budget games is squeezing the Golden State as never before. Although it's not the largest budget gap the state has ever faced, this time it will be harder for California to get help from private lenders. Standard & Poor's now ranks it lower than any other state except Louisiana, which shares the same rating.

"Because California does have a perennial budget crisis, it's very easy to fall into the 'boy who cried wolf' syndrome," says Dan Schnur, director of the Jesse M. Unruh Institute of Politics at the University of Southern California. "This time the sky is really falling."

http://news.yahoo.com/s/csm/20081210/ts_csm/abellyup

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#4) On December 10, 2008 at 8:16 PM, nuf2bdangrus (< 20) wrote:

I sold my gold today in hoping to buy it cheaper.....as I bought too high.  I'm going to buiy the gold stocks tomorrow.....AUY to start

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#5) On December 10, 2008 at 8:42 PM, DaBronxBull (30.86) wrote:

at least your cost of bread has come down from $100,000

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#6) On December 10, 2008 at 10:03 PM, Harold71 (28.67) wrote:

at least your cost of bread has come down from $100,000

LOL

Love your work Alstry.  Indeed, this particular series of events has never been witnessed before.

We can, however, analyze the past, and see how past events have unfolded with various setups...but right now we are having a series, multiple factors, colliding at once...it's really almost too much at the same time.

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#7) On December 10, 2008 at 10:09 PM, jegr5347 (< 20) wrote:

Office Depot cutting 112 stores, 2,200 jobsOffice Depot to close 112 stores, cut 2,200 jobs in cost-saving move

 

Beat you to it!

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#8) On December 10, 2008 at 10:18 PM, alstry (35.45) wrote:

Actually, I was working on the new blog as we spoke identifying your issue......but I will just keep it in this string.  Earlier I had posted about the shutdowns......so you only beat me to half of it....but I must give credit where credit is due.

Let me eloborate on your post for a second:

CHICAGO (AP) -- Office Depot Inc. will close about 9 percent of its North American stores and cut 2,200 jobs over the next three months while planning to open fewer locations next year in an effort to cut costs.

The issue is the 9%....that is another company cutting around 10%.  We are already at almost 7% unemployment and these cuts are not even counted.  Recently we have seem company after company announcing it is cutting 10% of its workforce.  It is not industry specific either.

Now its spreading to states.  We have the Governator in California using Alstryesque descriptions......words I was using months ago directly to his people....who woulda thunk???

The governor chided the legislature for failing to heed his call last month to come up with a plan to rein in spending and increase revenues to deal with the tide of red ink. He said in a press conference Wednesday in Sacramento that the deficit keeps increasing at the rate of $40 million a day, and that if nothing is done the state will run out of cash by the end of February. "We're heading towards a financial Armageddon," the governor said.

I couldn't have said it clear myself....and I don't have an accent.

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#9) On December 10, 2008 at 10:57 PM, jegr5347 (< 20) wrote:

Assuming the automakers get bailed out, GMAC just finished stating that if they don't get holding company status by 12/31, they are done. Dealers don't get showroom financing and car buyers don't get interest free 60 mo. auto loans, let alone leases.

You ask, what do they need to get bank holding company status? 30 billion, with a B, of additional capital.

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#10) On December 10, 2008 at 10:59 PM, jegr5347 (< 20) wrote:

I guess we can move to B's. Bailout, bust, bankrupt, take your pick.

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#11) On December 10, 2008 at 11:31 PM, alstry (35.45) wrote:

Mary,

I am not sure where you are going with "lost stock."

Maybe this puts things in perspective.  It is my strong belief right now that iwithn the next 90 days......much of what we know, or peceive, related to investing is going to change.

Money is simply running dry.  Our businesses are running out of money.  Our States are feeling the pinch.  Now even Universities are constrained.  The evidence is everywhere as even you have identified in common sense perspective.

I was acutely aware this time would come about three years ago....quite frankly I am surprised it took so long.  I am shocked how long the system was able to conceal it from the public.  Nevertheless....the time is about now upon us.

The issue that none of us know is how will government deal with the problem.....will it create a new currency, will it repudiate debt, will it hand bags of money to people and inflate its way out of the dilema.

The grocery shelves are running dry in Iceland and there is rioting in the streets of Greece(it is a far bigger issue there than how it is being reported in the states.....I have a few Greek friends and like Greek food even better).

What is going to happen here....I don't pretend to know.  How am I dealing with it.....by staying close to those I care about and at least giving them a heads up to keep there head up.

I will do my best to articulate my outlook when one gets firmer in my mind....in the mean time......I will try to simply document what I see as so many do so well in CAPs.

I am not saying I can't be wrong.  Quite the contrary.....I hope I am...and that is why I encourage others to articulate opinions different or opposing mine.....it is just that I call it as I see it and right now the mess is spilling over for everyone to witness courtside.

To say this journey has been fun would make me out to be a liar.  It really sucks(excuse the expression) and the outlook is even worse.

I surround myself with a group of people that are second to none.  They keep me grounded and know how to live life.  I have little doubt that we will find a path to not only get out of this, but thrive......Alstry always does.

For what its worth, you identified the only publicly traded restaurant chain that I consider has a reasonable outlook in these otherwise difficult times. 

I am not sure of your background.  Clearly you are eductated and my guess is that getting good grades was not too difficult for you........apply that to the appropriate temperment......and you have the recipie for success in any environment.

Please note:  I view education as an ongoing process and not something that is necessarily obtained in the traditional sense....even though I have my fair share of both.

 

 

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#12) On December 10, 2008 at 11:37 PM, jegr5347 (< 20) wrote:

We live in a truly global economy.

 

Czech car makers to lay off 13,500 workersThe Associated Press

PRAGUE, Czech Republic -- Car manufacturers and their suppliers in the Czech Republic are expected to lay off more than 13,000 workers by the middle of next year, an auto industry group said Wednesday.

The Czech Car Industry Association said in a statement that its survey of 127 companies showed 13,552 workers will likely lose their jobs in first six months of 2009. It said the suppliers are to be hit hardest.

More than 135,000 people are employed in the industry.

Czech carmaker Skoda Auto AS, a unit of Germany's Volkswagen AG and the country's largest exporter, plans to halt production from Dec 19-Jan 11 because of falling demand.

Finance Minister Miroslav Kalousek has ruled out any direct government support for the industry.

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#13) On December 10, 2008 at 11:39 PM, Option1307 (30.47) wrote:

I don't see how we don't at the very least reach double digit unemplyment by early 2009. With all of these cuts, the only way we don't reach at a minimum, 10%, is if the government "corrects" the calculation yet again. Can you throw me a seat belt for this roller coaster? Its starting to turn upside down and there are no hand rails...ahhhhhhhh

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#14) On December 11, 2008 at 12:04 AM, starbucks4ever (99.52) wrote:

" confluence of the national recession and years of legislative budget games is squeezing the Golden State as never before. "

We should keep increasing the pain until the governator agrees to tax Californian homeowners. If he is still weeping and sobbing and waving his hands helplessly, it just means there wasn't enough pain. No bailout for California! 

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#15) On December 11, 2008 at 3:44 AM, jester112358 (29.41) wrote:

Another strong rec for you!  We've never seen this before because never has the global interconnection been so strong, and never has debt been so highly leveraged.  It is indeed a new age.

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#16) On December 11, 2008 at 4:15 AM, saunafool (98.65) wrote:

Alstry,

Just to keep things in check. The world is truly interconnected. The advantage the mainland Europeans, Japanese, and Chinese have over Americans is that they have savings. They do not depend on credit to live.

So, while filling a thread with every job cut announcement and state budget crisis can scare the bejesus out of people, bear in mind that Europe and Asia will likely continue to function more or less as they have.

In the case of Japan and Europe, they will continue to be sluggish. Unemployment will rise because they depend on exports to the U.S. for a lot of their jobs. However, they are simply not facing the same financial "armageddon" that the U.S. is facing.

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#17) On December 11, 2008 at 5:55 AM, Daretoth (< 20) wrote:

The Panic of 1893 is very similar to what is happening today. The long term effect of this recession/depression which started in 1873 was that power shifted from the Banks in Europe to the banks in America and we later became the world's super power.

http://en.wikipedia.org/wiki/Panic_of_1893

I think it's very plausible with the similaries in this current recession/depression and the Panic of 1893 (bubbles and credit freezes only being a tiny part of the parallel) that we will see a signifigant power shift from the U.S. to China who seem to be the principle lender to the U.S. government.

It's not that we have never seen this before, it's just that no one remembers.

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#18) On December 11, 2008 at 8:40 AM, MarketBottom (29.81) wrote:

COLUMBIA, S.C. (AP) - The state's budget forecasting board said Wednesday it expects unemployment to hit 14 percent by spring in a dire forecast that prompted it to slash $230 million from the revenue estimate at the heart of a spending plan already rocked by cuts for public schools, colleges and health care programs.

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#19) On December 11, 2008 at 9:57 AM, alstry (35.45) wrote:

Mary,

Nobody appreciates shameless plugs more than I do....I used to stick Floridabuilder's name in the title of my blog simply to get more recommondations.  The funny part was I bragged about it in my blog even though I am really not looking for recommendations.....but more intelligent debate/discourse.  Unfortunately, FloridaBuilder quit CAPs, although a decent analyst, was too self absorbed and translated into weak character.

Congratulations on your soon to be Grandmother status.....if my daughter gets pregnant, I would not want to be the father of that child.

Your educational background is consistent with my fantasy of your mind (by the way....in this respect I am gender nuetral...in every other I pretty much undress every woman I see within the first few seconds of meeting her including my wife...she just happens to be the only one I sleep with until she starts dating the milkman) and reflective of your lucid posts.

Back to being Alstry, the self proclaimed bad boy of CAPs and wanting to be rated 100 before the end of the year and my aniversary date of starting this rather enjoyable constest... few on CAPs know BW3 like I do....the business concept is exceptional and the staff are very competent....but be careful...even an olympic swimmer can't outrun a tsunami.

Your logic is clear...the problem is there is no simple solution for the problem we face.  The cure can be far worse than the disease and we have no control how it is applied.  But I have little doubt...if there is a way to pull through this...people like you, Demon, DebtRich, Dino and a whole slew of others will will collectively and/or severally figure out a way.

 

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#20) On December 11, 2008 at 11:28 AM, jesusfreakinco (29.54) wrote:

Got gold?

 http://www.kitco.com/

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