Saturday, November 15, 2008

Bring on the Morphine, I feel the pain coming on

There is a massive tidal wave of unemployment beginning to break over the coastline of the Americas and what we are seeing is just a hint of the horrors it will bring. This week's initial U.S. jobless claims have spiked to a seven year high of 516,000, up from last month and up massively from last year at this time.

Now consider how many seasonal retail jobs simply won't manifest this year due to the slow down and how many positions, or in fact how many stores will simply evaporate after what I expect to be one of the weakest Christmas seasons in in decades. What we see now is not the Big Bad, just a blur on the horizon of what's coming.

Statements backing my belief this week warn of tens of thousands more jobs cuts in the near future , Citigroup 10,000 as of last Friday now up to 75,000 by a story today ,
Sun Micro 6000 and in Chicago massive layoffs from local corporations have been warned

Meanwhile we still have GM, Ford, and Chrysler who are all screaming for money and in danger of failure which will cause unbelievable ripples. The derivatives linked to GM alone are suspected to be worth about $1 Trillion which would probably finish off the counter parties whoever the sorry bastards are, add to that 3 million or so lost jobs and you've got a mega crisis.

The problem of course is political suicide, people are getting tired of bailouts for screw up companies and it is questionable if new money can actually fix the car maker's problems. It's also questionable if the Gov can afford this endless corporate welfare. Finally, at the G20 today it was mentioned that any bailout would have to pass EU scrutiny lest it be declared an illegal subsidy and prompt some form of trade dispute.

So do they throw money they don't have on a fire that can't be smothered, risk national bankruptcy and trade sanctions wars to maintain a dysfunctional industry and millions of jobs peak oil will eventually kill anyway, or do they allow the GM derivative bomb finish off the world financial system. I'm tempted to go with the later only because even after a bailout there are many reasons to believe the car companies will still fail, just delaying the crisis.

On the Canadian perspective our most recent job numbers were actually up but those were padded with many thousands of temporary jobs resulting from the recent pointless Federal elections so we should expect some job loses despite the holiday shopping season. Car manufactures and part makers will suffer huge job losses with or without immediate failure.

As it was in Washington this week the American car makers plus Honda and Toyota were all groveling for cash from both Ottawa and Ontario, but so far have received nothing. It's happened too often in Ontario that money has been given for retooling to save jobs and a couple of years later they are back for more or close the plant regardless of past promises. The Big 3 have mismanaged their companies, misforcasted customer sentiment, fuel cost and finally engineered crap that barely met the Korean standards let alone the Japanese. If Canada is to fund a car company make it ZENN.

There seems to be little to be cheerful about in housing either where despite claims the banks are renegotiating mortgages to let people stay in their homes vast numbers of houses are still being lost, in fact 85,000 in Oct alone.

It's no wonder Fannie and Freddie $29 B and $25 B respectively this quarter.

Now this video gives little real data but it certainly gave me a "What the hell are people thinking" moment.

In Canada both home sales and prices have finally dropped as I predicted and I hope those people I tried to warn off making that first home purchase in the last two years won't get hurt too much. All I have to say is your agent lied, houses do go down in price, even in "that" neighbourhood. While the most exotic mortgages varieties did not show up in Canada a fair number of people did take 0 equity or 5% down with secondary financing for the down payment..Ouch! In this kind of correction even 10% down may not be enough to keep people above water for long.

With Peak oil here and depression predicted on FOX of all places , (in fact bigger than the Great Depression was predicted), perhaps my hoard of metals will eventually perform as I expect and I'll scoop up that little hobby farm, commune, bunker, life raft at a price I can manage.

You know when FOX stops fluffing their corporate puppet masters and lets this on the air, it's already well past probable.

It sometimes seems it's already past the "you can't save yourself point" and while it is getting more urgent there still is time to find a little gold or silver even at a high premium if you really want it. There is also time to pay debt and start cutting back on your lifestyle before your lifestyle starts cutting back on you. There is time to buy some books on canning and gardening as well as some seeds and tools at the end of season tables, so you are ready in the spring. There is still time to call family and set price limits or quit gifting, or at the very least demand necessities not frivolities.

It's going to get bumpy folks, I wish you all well.


Anonymous said...

I have been trying to tell my friends much the same thing that you have written here.

I was warning people as early as Sept. 2005 to by "physical" gold and silver...I tried to warn of the coming crash...only a couple heeded the advice...soon the paper manipulation of the gold and silver markets will come to an end and they won't be able to contain the prices ...there already are "two markets" for precious metals...go online and do a little research and you will find that there is a worldwide shortage of physical gold and will also find that you cannot buy it for what you see posted as the daily "spot" price in their physical forms...the crisis is only begining...we are headed for times that almost none of us have seen within our lifetimes...

protect yourself and your family...get some physical gold or silver now while it is still available here in Canada...your real estate is going to head south much more than you realize...

the U.S.dollar will eventually crash and all currencies including the Loonie may appear to rise in value while this is occurring...but in reality they will be losing purchasing power to the massive inflation that is coming down the road from all the Trillions being created out of thin air...

physical gold and silver are still "real money" they are not "relics of the past" and owning some physical precious metal will protect your dollars invested in them whether there is deflation or inflation...

so buy some and hold on matter what their prices do while not get scared out of your position in physical metals...they are going higher...


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