Saturday, December 6, 2008

SAR #8341 / Weekender

When WalMart is out of food, where will you get yours?

90 Pound Weakling: Retailers had the worst November 35 years, with double-digit decreases reported in many categories.

Bulking Down: The Baltic Dry Index continues to plunge and no turnaround is seen for the next 2 or 3 years. There are a large number of 'capesize' and 'very large ore carriers' to be delivered soon, to sit empty. Expect no finance, credit, nor liquidity in shipping markets for the next six months. You can rent a capesize for $1000 a day. Call some friends,plan a charter cruise before the shelves are empty.

Not Enough is Too Much: China seems to be getting restive, although whether their losses on US investments bothers them more than Paulson's prevarications is anybody's guess.

Deflation. Deflation is impossible in a fiat currency economy - so Uncle Milty taught. Yet it is happening. It is a circular phenomenon and becomes its own cause. A recovery requires the return of the customer with cash. Not credit, cash. Credit's another word for debt and there's no appetite for more of that. And won't be for a very long time.

Dis-assembly: Over 400,000 jobs were lost in September, 325,00 in September, half a million wandered off in November - that's 6 million a year. Unemployment reached 6.7% on the highly suspect U-3 scale. So far this year 1.9 million jobs hae been lost, 25% of them last month. Expect something similar under the tree.

Old Time Religion: A 2700-year-old marijuana stash has been found in the Gobi Desert. The archaeologist who discovered the bindle " believe there is little doubt as to why the cannabis was grown." Clever, those academics; will the owner please come forward.

Unwealthcome Effect: As house prices continue to fall, homeowners feel poorer - even if they have no intention of selling. Now US credit card companies are going cut credit availability by $2 trillion - 45%. This will lead to customers feeling even poorer, spending even less.

Depressing Redux: The wizards assure us that they've finally stumbled upon The Solution. Debt. Big wads of government debt. Don't mention that debt is what got us here or that quite a lot of money has already been borrowed and pledged and given away - all to little effect. Wizards get grumpy when caught naked.

Hell No, I Won't Go: No, not an anti-war protest, rather a Bush-appointed US Attornery has said she does not plan to resign just because a new president was elected. Republicans certainly are against change, especially now when jobs are hard to find.

Postponing the Inevitable: Treasury's plan to dictate a 4.5% mortgage rate tacitly acknowledges that the housing market in the US has been completely nationalized. The rate is too low to attract investors. The government will end up buying all that F/F debt and will run the printing presses to pay for the program; hundreds of billions to start, hundreds of billions more later. This won't help shrink US debt loads because it only applies only to new purchases. It won't help those already in trouble or those now underwater. And it does nothing about consumer spending, which is the real problem.

Are We In Denmark? That rotten smell is either the flatulence of cows and pigs, or the odor arising from the EPA's plan to charge farmers $175 a year for each cow. Hogs will go for $20 each. Good thing the price of food isn't counted towards the cost of living.

Porn O'Graph: Unemployment data from the Bunch of Lying Statisticians

No comments: