Archive for December, 2008
Today’s Wall Street Journal cites the anticipation of looming “mortgage cram-downs”, as a result of the failure of government’s steps to cease the increase in foreclosures.
The article notes that there are 7.5 million homes underwater currently and that foreclosures are expected to exceed 8.1 million over the next four years!!!! It also notes that Congress was hoping to help 400,000 homeowners through its latest program, “Hope for Homeowners”, but only 357 have applied for the program to date.
Check out this “Layoff Tracker”. Unfortunately, in only includes the largest companies, and excludes the source of most of the unemployment and underemployment.
Now that the government has bailed out Wall Street, the Banks, the insurance companies, the auto makers, and countless others, the real question is “Is it enough?” What needs to be done to get our economy back on track? Are we on the verge of being “back on track”?
On December 15, 2008, Peter Zeihan wrote “Falling Fortunes, Rising Hopes and the Price of Oil”. See it at:
Stratfor is the world’s leading online publisher of geopolitical intelligence. Thus, it is an amazing source of real news and analysis.
Mr. Zeihan’s article begins: Oil prices have now dipped — albeit only briefly — below US$40 a barrel, a precipitous plunge from their highs of more than US$147 a barrel in July. Just as high oil prices reworked the international economic order, low oil prices are now doing the same. Such a sudden onset of low prices impacts the international system just as severely as recent record highs.” Please see it at the link for the full article.
Christmas eve… All the presents are wrapped and hidden from the kids. All, meaning one for each kid. For me, I hope I do not get anything. Not that I do not want anything, but because I know the money would be better spent on food or gas or books for the kids over the next week or two.
2007 and the first half of 2008 were marked by hyper inflation, on a global scale. Is this all but forgotten? There were fears the world would run out of oil and gas and market prices reflected those fears. All the corn in the world was being consumed by the soda makers and the ethanol refineries, leaving no corn left for food. Because of the corn prices skyrocketing, the price per pound of beef, pork and fish bounded higher. The global effects caused rice prices in Asia to move higher by 150% and the prices of bread in South Africa rose to beyond the reach of the typical laborers.
About the same time, the fear that there was not enough copper, steel, cement and investment bankers forced pricing on a global scale higher and higher. The US dollar was devaluing because the US did not produce anything that was to be needed by a commodity hungary world, but for our corn and ethanol, and investment bankers.
If the world is literally flooded with dollars, why is it near impossible to refinance a home or refinance and restructure outstanding consumer credit?
With the skyrocketing unemployment, there are many out there espousing the need for the government to provide tax credit to employers, encouraging employment….
New release this morning that the real unemployment, including actual unemployed, those off unemployment due to duration of being out of work and those taking part time jobs because full time is not available, has reached a post depression high of 12.5%!!!!!
With credit lines continuing to be cut, banks not negotiating outstanding loans, and new loans only being extended to those who do not need the money, there is but ONE QUESTION: WHERE IS THE MONEY?
Yesterday’s Wall Street Journal reported that the number of miles driven in America had fallen by 8.9 billion miles or 3.5% in October 2008 versus October 2007. The Department of Transportation reported that this was the largest decline for the month of October since 1971. They noted that this decline came despite the fact that gas prices have declined from above $4 per gallon to less than $2 over the past 4 months.
Unemployment Claims Higher than Expected by 50,000. The details behind the numbers…..
The figures that get published are the “weekly initial jobless claims”. This figure represents the number of new people who have filed for unemployment benefits in the last week.
Poll:What is your greatest 2009 money fear?
The equity markets have recovered more than 20% from their recent lows. Some companies are up as much as 50% or more. The markets generally are six months ahead of the true news, so should we be optimistic? Is the light at the end of the tunnel? Should we be excited about the prospects of $500 billion of government projects and an additional $2 trillion of liquidity?
There are some out there who have said, “The American people have spoken, and they have said they do not like GM, Chrysler and Ford autos.”
It is absolutely more accurate to say, “The American people have spoken, and during the past three months demand for new cars has dropped, like a rock.”
The biggest banks that have received the biggest free giveaway of American taxpayers’ wealth, are now stealing the life blood of every household and the economy and our government is either blessing the theft or ignoring it. The Red Plague of losses, illiquidity and falling values and prices continues.
The biggest banks that have received the biggest free giveaway of American taxpayers’ wealth, are now stealing the life blood of every household and the economy and our government is either blessing the theft or ignoring it. The Red Plague of losses, illiquidity and falling values and prices continues.
The news is that half a million Americans lost their jobs in November and more than 1.9 million jobs have been lost since the start of chaotic 2008!!!! The worst news though is that many, many of those who are still employed are on commission, or paid based on business volumes or other variable payments. Their incomes generally are down significantly, extremely down!
Remember hearing that our brains have 100 billion neurons when we are born, and that with every glass of wine or cigarette we kill 10,000? Didn’t 100 billion sound like an amazing amount? I always wondered how I could have 100 billion connections inside my little brain……
The markets today gave up all their gains of last week! Though the Black Friday numbers were much better than expected, the economic numbers regarding economic activity and future activity were horrendous. The official group that announces recessions, announced today that the recession started December 2007. Brilliant!!! It took them 12 months to figure it out??? Just look at any economic indicator and it is abundantly clear!
Leave it to Donald trump to come up with a unique reason why HE does not need to stand behind a $40 million personal guarantee made to Deutsche Bank regarding HIS hotel in Chicago. He has claimed that the “force majeure” clause has become effective due to the economic chaos and world financial crisis.
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