- People must be productive, not doing "make work".
- Building houses and condos does not count for much when measuring "productive".
- Neither does Government employment.
- "Productive" means creating things of value, not false paper wealth.
- "Productive" does not mean wasting energy driving around in circles trying to find the next mall to go shopping in.
- That the "great social programs" are destroying our living standard and our way of life.
Friday, September 5, 2008
The Great Unwinding Continues
Some Americans think they are wealthy if they have a good credit score. Some Americans think they are wealthy if they have a boat load of their company's stock in their 401k. Some recently thought they were wealthy because they were astute enough to buy a house, and said house would actually PAY THEM to live in it.
Is it any wonder that people who think like this elect people that think we can cure economic problems with "stimulus packages"?
This is only "dress up" for the real dance to come. When the Oil import crisis meets the Great Credit Default Swap Default (and that is not from the department of redundancy department... there really will be a default on the Credit Default Swap), you may look back on this period with fond memories.
The markets are imploding for good reason. The Banks are dead, the Brokerages are dead, and the Hedge Funds are looking to the left and right, trying to determine which of the 3 of them won't be here at the end of 2009... so who is left to buy? John Q. Public? He's broke and about to get broker trying to figure out how to make payments on that luxury care he can't afford to drive. The Feds? Give me a break.
Let us go back one year from today. Ready?
What if I told you then that the economy would be going down like a rock in a pond, unemployment would top 6%, AND oil would be north of $100 for the entire year? What would you have said? That $100+ oil and the rest of the scenario are mutually exclusive events, right?
This is not to say that Oil might not win the race to the bottom. Right now the economy is falling faster than U.S. oil imports, and Oil likely will not bottom until that reverses - with the exception of WINTER. Remember WINTER? You know, HEATING OIL? Our fondness for warm homes? That might trump the economy, and then again, if it is a mild winter, it might not.
Wait for more data.
So much for the bottom in housing. So much for Fannie Mae & Freddie Mac. So much for if's and and's and candy and nuts...
Our economy will remain broken until we figure out that:
Now, since we are not going to figure this out until it has been jammed down our throats, the best thing you can possibly do is to un-complicate your life. Cut every recurring expense that you can live without, lower your overhead, and get used to the simple life. Because once we get past this economic issue, the Oil import shortages will be the second shoe to drop.
"May you live in interesting times"
Mentatt (at) yahoo (d0t) com
Posted by The Short Story Man at 7:15 AM