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alstry (36.27)

Yup!!!! It's Definitely a Depression!!!!!!!!!!!!!!!!!!!!!!!!

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April 30, 2009 – Comments (11)

Cummins earnings tumble.....for 2009 the engine maker sees sales down more than 30%.

Dow Chemical first-quarter profit plummets 96%......net sales fell about 42% to $9.1 billion from $12.9 billion.

I could go on, but you get the point.....SALES at some of our most important companies DOWN 30, 40% and more....and the outlook is deteriorating....as we know, imports and exports were down by about a third in Q1.

Remember, a Depression is only a 10% drop in GDP from peak to trough.

Just like the auto companies and construction companies that slashed half or more of their their workforce.....you should not be surprised if similar behavior occurs in many other industries as revenues evaporate such as chemical, industrials, finance, etc......

Government and healthcare is just starting to slash to make up for evaporating revenues.

And some of you Fools question Alstry's projection for 30-50% unemployment.....at this point, and the current trends, it is only a matter of when......we should be over 17% when reports come out next week.

And by the way, for those of you that still don't understand what happens to a company when revenues drop 30% and more and the business has significant overhead and leverage.....you may want to take a look at Chrysler and GM as excellent models.

Prepare....Don't Fear......Zombie Nation is moving ahead and on a tear.....

11 Comments – Post Your Own

#1) On April 30, 2009 at 8:33 AM, alstry (36.27) wrote:

FOOLS....YOU ARE BEING RAPED....HOW DOES IT FEEL?

From K. Denninger's Blog...

Sweet Jesus:

April 30 (Bloomberg) -- The Federal Deposit Insurance Corp. may offer investors financing to buy distressed U.S. bank assets without requiring them to share an equity stake with the Treasury, people familiar with the matter said.

Oh that's nice.  So now we're going to offer 6:1 (or more) leverage to these hedge funds with non-recourse financing provided by the FDIC, and if something goes wrong the taxpayer will eat the balance.

All of this to avoid the possibility of "executive compensation rules."

“Treasury is working closely with the FDIC in developing the Legacy Loan program to repair balance sheets throughout our financial system to help drive us toward economic recovery,” Treasury spokesman Andrew Williams said.

Stealing taxpayer money is one of the prime ways to "drive us toward economic recovery"?

Only in government....

And here's the $32,000 punch line (pardon the deflation)

“If banks can get rid of some of their most toxic assets, they’ll need less capital and there will be less stress in the system,” MacDonald said.

There is an easy way for banks to get rid of their most toxic "assets": Sell them for whatever the market will pay.

That, of course, requires admitting what they're worth, which in turn would require "earnings" restatement (or admission of outright insolvency.)

Since it is deemed important that those who ripped people off not have to pay the price for their actions, our politicians have instead decided to risk destroying our government's balance sheet and ability to finance its debt.

Good luck Mr. President; you're going to need it.

http://market-ticker.denninger.net/archives/1000-Heads-I-Win,-Tails-Taxpayers-Lose!.html

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#2) On April 30, 2009 at 8:49 AM, alstry (36.27) wrote:

Another 631,000 Americans lost their jobs last week!!!!!!!!! 

131,000 MORE than Alstry's estimates.

And that is only the ones that we know about who filed for unemployment benefits for the first time.

We are losing over 600,000 PER WEEK!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

At this rate.....OVER 30,000,000 American will lose their jobs in 2009!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

Based on the current rate of contraction....We should be OVER 20% unemployment by JULY!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

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#3) On April 30, 2009 at 9:13 AM, Cherryz (32.79) wrote:

psh. you're saying unemployment, meaning no job, will be over 20% by july.  You can't include underemployment in that figure unless you're going to say both of them!  Lets say somebody has to work part time and make only 50k a year, they can still live comfortably and provide for their family!!! They just won't thrive.  We'll be fine.

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#4) On April 30, 2009 at 9:57 AM, ralphmachio (28.44) wrote:

yeah, where do I sign up for the 50,000$ a year part time job, don't suppose you would want to hire me?

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#5) On April 30, 2009 at 9:57 AM, SolarisKing (< 20) wrote:

Part time and  50 k a year?

How many people do you know that make 50k a year part time? And these folks aren't leveraged?

You live in a different reality from the one i live in.

 

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#6) On April 30, 2009 at 10:04 AM, Deepfryer (27.84) wrote:

It's not a depression. Unemployment is around 8.5%, and will probably peak at 11% towards the end of this year. This does not begin to approach the levels of the Great Depression, where people were dying of starvation all over the country, eating their shoes, etc. This is just a bad recession.

 

And lol @ the 50k part-time job. Seriously, what world are you living in?

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#7) On April 30, 2009 at 10:05 AM, alstry (36.27) wrote:

Actually, if you include the millions of self employed people who are not working and would like to but are not counted as unemployed....we will be WAY OVER 20% by the end of JULY........

Who let the Dogs out??????????????????

Ghoser is about to Party as Techno Trance Analysis is about to kick in!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

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#8) On April 30, 2009 at 10:26 AM, StopLaughing (< 20) wrote:

Technically this may be a depression in history. However, you are focusing on the wrong data. Last night Japan posted a big upturn in GDP, exports and consumer spending. Asia was up 4% last night and the S&P broke out on the upside this morning.

 

This leg of the CatBounce/BullMarket is still in force. When we reach 1000 on the S&P we will find out if this is a W bottom or a V bottom. 

80 % of the buying power in the S&P is institutions. They decided that 666 was the bottom and went long (at least enough of them). They are hedging thier way up from the bottom. Note that hedging is different than buy and hold or buy and take profits. 

 

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#9) On April 30, 2009 at 12:28 PM, Cherryz (32.79) wrote:

I do live in a different reality, I'm in the Orange County, California bubble. LOL.

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#10) On April 30, 2009 at 12:41 PM, Melaschasm (53.59) wrote:

One of my friends recently lost his job.  Since he is not a big fan of living off from the government largess, he went out and found 3 part times jobs.  he is now working 50 to 60 hours a week, and making what he was making as a full time employee.

We need to be honest about unemployment numbers.  A significant portion of the people currently receiving an unemployment check are not even looking for jobs.  In fact I know several people enjoying a nice relaxing vacation funded by unemployment.

It is bad in the economy right now, but we are no where near being in another Great Depression.

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#11) On April 30, 2009 at 5:04 PM, alstry (36.27) wrote:

My guess is that for everyone who is vacationing on unemployment, there are two self employed people not making an income suffering and not counted in the statistics.

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