Friday, May 15, 2009

Economic Doom is getting Worse!

The following laundry list puts the US Economy halfway between the Intensive Care Ward and the National Morgue:

- Endless War spending could subsidize every household in America with $1000 per year
- Income is trending down in the United States, England, and Japan
- US banks loan loss reserves are at a 20-year low while profound losses continue
- Of the nearly 9000 US banks, 1575 of them posted a Q1 loss
- Bernanke claims $2 trillion is needed by the big US banks, but they pass the Stress Test
- Municipal bonds and state finances are disasters, as they each appeal for USGovt aid
- A shocking 20% of US homeowners have loan balances greater than their home values
- Half of modified loans result in foreclosure within several months
- Jobs report for April revealed jobless level at 8.9% (massaged) and 15.8% (actual)
- Jobs Report for April included 66k worse revised job losses for March and February
- Continuing jobless claims at 6.56 million, grew 220k just last week
- CALPERS pension fund is insolvent, USGovt pension PBGC guarantee fund in deep deficit
- FDIC requested $500 billion in additional funds to cover bank failures (giant failure coming)
- Car sales still down 40% annually, with steep Japanese car sales declines also
- Detroit carmakers are closing down plants, with huge ripples through entire supply chain
- GM & Chrysler restructures are extremely likely to result in Chapter 7 liquidation in time
- GM burned $1.3B in Q1, burns $113 million per day, unable to transition to green cars
- Business investment down 38% in Q1, a RELIABLE LEADING INDICATOR
- Durable goods up 9% in Q1, but only after Q4 was pushed down from bank shock
- Inventory reduction not key, but rather inventory/sales ratio, since sales way down
- Economic contraction despite lower energy costs from crude oil, natural gas, gasoline
- Housing was false foundation since 2002, now in stubborn decline, the Giant Albatross
- Distress sales make up 40% of all housing sales, led by underwater sales and foreclosures
- Cramdown Law rejection means open season on foreclosures, more huge bank losses
- Banks admit that home loan are not modified after all, a revolving door to foreclosure
- Option ARMs, Jumbos, and Commercial mortgage defaults are ramping up fast
- Commercial mortgage bonds have $70-100 billion that cannot be refinanced, sure to default
- Staggering decline in consumer credit, -80% in Q3, minus $31.7B in Q4/Q1

Note that final line item. Never in modern US Economic history has consumer credit gone negative. Its growth fell sharply in 3Q2008, but it contracted (reduced, shrunk) by $31.7 billion on an aggregate basis in 4Q2008 and 1Q2009. For a debt-based economy, such is a death knell.


  1. all true. hussein has the smiley face on all bs.Black out on national media of reality! he is a good bs'er with no resume at all. who the hell is he? a part time senator for illinois? surrounded by crooks tha t dont pay their taxes!
    what is his resume ? anyone? as he leeds us to situation hopeless. the lemming public is not being told the truth as all hell would break loose. its the end of living the beginning of survival . most of your deserve it! what the hell were you all thinking! sorry- you dont think! you proved that.
    winston smith.

  2. The government told the banks to give all
    these losers mortgages and they would back them up,what a crock of shit and now the honest hard working people are losing their homes. It was government policy that started this whole thing not the banks.
    The whole system is corrupt to the hilt including the stock market and if we don't stop it now a lot of your families are going to break up and individuals are going to die needlessly.

  3. Ahhh.. isn't Globalization a wonderful thing. The first step the U.S. should do to save themselves is stop outsourcing work and every American, stop buying imported goods.

    This will never happen though because since our glorious leaders have opened borders to every race, there is no unity and Americans will not stand together. America is doomed.

    U.K will follow and every other Western nation, for this very same reason.

    Call it racist if you will, but see it also as fact.

  4. The zombie graphic is hilarious. It takes the serious edge off this site, which can be a bit depressing to read at times. A little humor at one's own expense and sarcasm are never really a bad thing.

  5. Stop with the doom graphics. I'm falling more in love with you everyday.

  6. It wouldn't surprise me at all if every single American of any income level winds up bankrupted after they start picking up the debris from this calamity of epic proportions!

    we've become...


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