How bad will it get?
September 16th, 2008Yesterday, the DOW dropped over 500 points, which is the worst day since the market re-opened after the events of 9/11. Unemployment is around 6.1% (according to the US Bureau of Labor Statistics), and inflation is high. Merrill Lynch, the people who administer my current 401k, just got bought out by Bank of America, which most likely avoided complete collapse for ML.
I recently said I bought the DOW at 12k. I’m now watching it closely, trying to guess its low. It may go even lower. Hard to say.
The economy’s in bad shape. Certain politicians have been trying to sugar coat it, but let’s face it, these are really bad numbers. America keeps sending jobs overseas and is not replacing those jobs with new ones created here.
I told you the globalists were full of it. Said it back in ‘05. This is what’s causing the mess. You have a good job. So you buy a house. Your job goes overseas, you survive on credit cards, and the bank still sends you bills for the mortgage even though you lost your job. Yes, the bills don’t stop. By the time you find another job, it’s too late. You’re bankrupt.
This is happening to too many Americans. I was saying this when I first started blogging and got called every name in the book for it. Lou Dobbs has been saying it too, but since he’s white, he gets called a “racist.” Go figure. Of course, Americans come in all sizes, shapes, and colors, but that’s irrelevant. Why argue with logic and facts when you can name call?
So, how bad will it get? Hard to say. All I know is if you can, pay off your debts, spend less than you make, and put as much money aside as you can. We might be weathering this for awhile. Of course, me being a zombie slayer, I do have three months of food and water, silver (a hedge against inflation), and ammo if things completely fall apart. People laughed back then at me buying silver, saying I was paranoid. Now who’s looking stupid?
Don’t forget that the unemployment rates are always an under estimate because they only count those people currently claiming unemployment benefit money. Those people who have been unemployed long enough for benefits to run out are no longer counted.
Plus, I also think they should count those people who, while technically employed, don’t make enough money to make ends meet. The working poor. Being employed is only good for the family and economy if it allows you enough money to live on.
Gold is looking like a bargain again, too… A real bargain. Cripes.
In fact, I just bought a couple of blocks of Street tracks and Newmont mining. I’m hoping to sit tight for 3 years and I wouldn’t be surprised to see gold double, or even triple.
Trouble is, I might have to sell just to keep living ;->
Just stopped by for a brief visit, ZS. Sorry to see you so bleak, but I know how it is.
Laura - The lives of the working poor are only going to get worse if we don’t do something about outsourcing. The first thing we can do is stop giving corporations tax breaks for outsourcing.
And yeah, I hate how they changed those statistics that now anyone out of work more than six months is no longer counted in the statistics. WTF? I was out of work almost two years once after my job got sent to India.
Wallflower - Yeah, gold, silver, either one. Precious metals are a hedge against inflation.
By the way, good to see you. You get a blog up yet? Can’t wait to read it. If so, let me know the address.
it’s ugly for sure. very very ugly. there were one or two economic decisions i absolutely insisted upon 5 years ago. there are some other things i wanted but did not stand my ground with regard to them. it is expensive when i don’t stand my ground when i know i am right.
How bad will it get? I won’t even pretend to understand how the financial industry works but after all the “experts” speak I get the impression its a house of cards only be held up by sheer will and double talk. Now add that I also see many people living off credit cards and whose jobs don’t actually make anything so the loss of manufacturing jobs are just some abstract idea to them. But if the house of cards falls and the economy does a dead cockroach in which the service industry types then lose their jobs and the poop will finally hit the fan. That will be very bad. Spoiled Americans faced with the idea that their lifestyle is history? Well, you know how spoiled children act.
I don’t know. Butthead’s still in office. Curious George is smarter than he is. And I didn’t vote for him so I could call him a butthead.
Come play my football pool. Click here.
No, ZS, I am not starting a blog just yet. It is hard for me to believe that I would do anything useful for the community. But I do like reading your blog and occasionally (due to the liberal element who doesn’t like my POV - if I raged on about how the Republicans had screwed up the entire world, I am sure no comments would be made.). But occasionally I have GOT to open my big keyboard and add a little ;->
As Beach Bum says, the financial ‘community’ is a real crap shoot - not for them though. I wouldn’t be surprised (and have read this on other economic blogs as well as MarketWatch) if the ‘financial’ community rulers (the CEO’s and minions) orchestrated the entire real estate fiasco - particularly in CA, that giant cess pool (although a cess pool with dreamlike weather that I would live in too, could I but afford it.)
Real estate is high, lending lots and lots of money to more and more people is what makes the banking industry rich - they get ‘most’ of it back, and it is the cost of their doing business when something fails… The chiefs saw the crash coming (who didn’t, really?) and many of them made their exits amid cheers and well wishes, and of course riding in their golden chariots with their golden parachute tucked neatly inside. In comes the new generation of CEO, still on the inside, but not quite so inside… They continue to ’screw’ more and more people into thinking they can ‘afford’ a ridiculous mortage on a postage stamp piece of property - only there are factors in the ‘free market’ they didn’t count on (who could? The economists can’t!) and they are left half way their their screw with their d**k in their hands… They still get great deals and of course, they are never asked to ‘pay back’ the money that they lost… Their names will be forgotten in a couple of years, but that’s long enough to go on a world tour, when they come back to a new mansion, all will be forgotten, if not entirely forgiven.
What surprises me is that more people don’t hunt these guys down and put a well placed piece of cheap metal in their processors… Speaks well of our society, I think… We are not savages.
I’ve gone on enough…
But please do not confuse the ‘free market’ with the ‘financial industry’, they are two very different things and can sometimes really be at odds, as in the real estate mess wher the ‘free market’ f**k*d the financial industry but good. Actually the only people that get good and screwed are US, meaning the government, meaning that we pay taxes to bail the buggers out. Yep. Because it is ‘good fro the economy’ isn’t it? Everybody repeat after me….
Wallflower - What surprises me is that more people don’t hunt these guys down and put a well placed piece of cheap metal in their processors… Speaks well of our society, I think… We are not savages.
Well, having had it done to me, I’d probably look the other way if someone did. Some of these people are decent people who don’t know what they’re doing but others are downright thieves who know full well what they’re doing and are only in there to get their worth out before it collapses.
Yeah, we’re going to be bailing out companies left and right. It’s going to be a mess for the taxpayer, especially since in one day, $700 billion in retirement assets are wiped out (on paper, of course).
Kate - I’m in. Should be fun. What do I get if I win?
Beach - Our lifestyle as is may be history. Temporarily though. Keep in mind this all happened before.
Lime - You and me both. I sometimes think about if I could go back in time, but you can’t think like that because it accomplishes nothing other than getting one depressed. Just keep learning from the past and use that as something to build the future from.