The Economy Crisis Is Contained… Yeah, Right!

Some News Links From Contributing Editor RH:

NY TimesChina’s Inflation Hits American Price Tags…
http://www.nytimes.com/2008/02/01/business/worldbusiness/01inflate.html?_r=3&hp&oref=slogin&oref=slogin&oref=slogin

money.cnn.com‘It’s going to be much worse’ Famed investor Jim Rogers sees hard times ahead for the United States – and a big opportunity looming in China…
http://money.cnn.com/2008/01/30/news/international/okeefe_rogers.fortune/index.htm

bloombergU.S. Economy: Payrolls Fall for First Time Since 2003…
http://www.bloomberg.com/apps/news?pid=20601087&sid=agPvpBGH.EX4&refer=home

CountrywideCountrywide And Chase sent letters to customers last week telling them they could no longer borrow against their credit lines because the total debt on the home exceeded the market value of the property. The lender says it is using computer modeling to determine which of its customers would have their cash spigot shut off…
http://globaleconomicanalysis.blogspot.com/2008/02/countrywide-and-chase-shut-off-cash.html

Home DepotHome Depot to lower 10% of headquarters staff. For now!
http://www.marketwatch.com/news/story/home-depot-lower-10-headquarters/story.aspx?guid=%7BB2D577A3%2DA185%2D4D73%2D9AAF%2D377BDC78AB6A%7D

bloombergSay It Ain’t So, Municipal Bonds Are the New Junk: Joe Mysak
http://www.bloomberg.com/apps/news?pid=20601039&refer=columnist_mysak&sid=auPmzvv3Al.g

Bush Says ‘Serious Signs’ U.S. Economy Is Weakening…
http://www.bloomberg.com/apps/news?pid=20601087&sid=aJZqcryZJIqw&refer=home

Where a recession is already hitting hard…
http://articles.moneycentral.msn.com/Banking/HomebuyingGuide/WhereARecessionHasAlreadyHitHard.aspx

It’s just the beginning… -RH

Chicken Smith View:

I know, you’re probably thinking; “boy, these people don’t let up that the sky is falling.” Well, it ain’t just us. It’s a lot of people all over the world that recognize the trouble we’re in and the uncharted waters we’re headed towards.

As you can probably see, people are only now starting to wake up to this, just as I started waking up to this towards the end of 2006, and others, much smarter than I, have been predicting a decline for much longer than I have (check out Peter Schiff). Sooner or later you’ll have to recognize it. If you don’t see the signs that we’re in a recession and possibly headed for worse, I can only think of a few excuses for that reasoning at this point in time:

1. Your wealthy – I figure if you’ve got a lot of cash coming in, and someone else is managing your money, you might not feel all the cash that’s going out. I’m choosing to define wealthy as someone who’s combined household income after taxes is above $750,000. Although if you make that amount, chances are you probably have lost some money in the stock market recently, so you must have felt it.

2. You’re a hard working schmuck and your wife handles your money – Well, here’s how I figure it; the more inflation hits us, the more you have to work, the more you work, the less time you have to stop and see what’s really going on. As the bills come in, your wife simply insists that you have to work more, ok, well maybe she’s working more too, but the point is you can’t afford to stop to smell the roses.

3. You’re a student – Everything is already expensive, you already owe a lot of money, and you don’t know any better. Keep reading and learning, these are tough economic times we’re headed towards, similar to our depression years that started in 1929 and lasted well over 10 years.

If you don’t fall into one of those categories above, then surely you must be seeing it everywhere, from food prices to heating prices, from housing crises to financial crisis, from social woes to political woes, from health insurance to home insurance, from the falling dollar to the negative savings rate. Even global weather is lining up right along the rest of our economic uncertainties to produce the “perfect storm” of a world financial collapse that is being spear headed by the U.S. Granted, unless those terrorists decide to attack us again, we’ll all survive this and things will eventually get better, but they’ll certainly get worse before we even see the light at the end of the tunnel.

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4 Responses to The Economy Crisis Is Contained… Yeah, Right!

  1. mat carville says:

    Thanks for this post, you finally let up on the “doomsday” look and said it honestly. Things are going to be very hard for a long time but the world will not come to an end. A way of life will be lost and new one born. We will adjust and survive and it will be fair, because everything we have done up until now has been skewed in our favour.

    Thanks Chickensmith for skipping the sugar coating and keeping it real.

  2. I wanted to thank you for taking the time to write this post. I found it to be very helpful as I can relate to this very well. I look forward to you writing again. Thanks.

  3. chickensmith says:

    Keep reading and learning about our economy, as the worst is yet to come.

  4. lolitakali says:

    Saw that “housing bubble” coming even before 2005, 2004 I think is when I first wake-up to it. Actually a college professor did discuss it with our class too… started me thinking the way I think today.

    I worked at the heart of the housing boom & has seen many clients spending their mortgage dollars like it is an unlimited well (from interiors to additions, cars to luxury items). 2004 I have also dealt with a client that have lost a new house under a year old to a fire in the middle of winter at night! That story probably impacted me to think do I really want to invest all I have into a structure “home” that still may end up in a puff either by the act of personal folly, debts to the bank, unaffordable taxes to the “Uncle Sam” or even the act of God.

    Graduating College I have also seen many students go into debt but can never be “free” trying to pay them off (a rough start that I do not have thankfully). How about their parents who tried to pay for their children’s way in College but end up with the debt themselves; what about their retirements today then??? YET, after their College today… there is no guarantee of a job to pay off their loan? How about Mr. good ol’ Bill Gates wanting to hire more foreign workers who never are in debts our children is in for their degrees??? Talk also about that greedy College scam where tuition just keeps rising… putting many children into loans and debts that is it worth it all?

    How about our national debt??? Yes, just how deep is Uncle Sam’s pocket really? They sure can keep “printing money” forever, but if that money is not worth any value in trust anymore, it will just be like a “banana note”. Think recent Madoff’s scheme, our government is just involved in a bigger, larger, grander “ponzi” scheme that not only involves us the tax payers, they are also pulling the wool over the eyes of the world, the countries they trade, is in business with, borrowed to/from!

    Money used to have its value placed on gold & silver, economy, trade (ancient times = salt, fur, gems, metals etc.), resources, assets e.g. house (hence housing bubble) & business etc. etc…
    With free printing money in the trillions like what the FEDs are doing to day, the bank failures, that credit crunch, the jobloss rate, the losing value in house etc…
    Really, what “value” are these money based on?? Isn’t it just paper, all useless when that “trust” is broken, really nothing but “air”???

    I have also seen first hand older folks who do not owe any mortgage debt but cannot afford to retire in their own home due to taxes, outrageous health insurances, hike in medicines, food & utility bills. BTW all insurances is just another “ponzi” scam! Banks are too! They all try to invest their client’s money to get even more profit out of a promise… thats it! When investing goes down to the negative, and when the client’s want their promises kept, these places will just go belly up to avoid the pay-out. Just like Madoff!

    Best thing is not to be “tied-down” to Uncle Sam, your house, business or the bank etc. Be mobile & ready to go, so when the tornado hits, you are out of town!

    Yes, there will not be an end to it just yet. Much more “worse” is sure to come!

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