THE ECONOMY–JOBS : CNNMoney (money.cnn.com) of 12/5/08 has one of the most comprehensive overviews of the jobs situation in the U.S. in: “November: Most jobs lost in 34 years”.
The article initially notes that the job loss in the U.S. for the month of November was 533,000 and that this translates into an unemployment rate of 6.7%. While this number appears huge (the economists were predicting a job loss of about 320,000) it’s absolutely mind numbing when you place it in the context of the previous two months revisions: “October’s job loss was revised up to 320,000 from 240,000 and September was revised up to 403,000.” (from an estimated 284,000). The November job loss was the greatest in 34 years: December 1974. (It is December that historically has one of the highest rates of job-cuts.)
The article continues by observing that, “Deeper cuts likely to come”. These deeper cuts are predicted through at least the first half of 2009 with employers trying to prepare for a more difficult economic situation ahead.
Seventy percent of our economy is dependent on consumer spending, notes the piece, and this will require the president-elect to take rapid and dramatic action upon assuming office.
THE ECONOMY–CREDIT: Money News (moneynews.newsmax.com/street talk/whitney) of 12/3/08 presents an article from managing director of Oppenheimer & Co., Meredith Whitney, entitled “Whitney: I’m Now Even More Bearish” .
Ms. Whitney, noted for predicting the mortgage market problems far ahead of her peers on both Wall Street and Washington, is described as believing “ …that the “capital destruction” continues in the financial sector.” and that the mortgage market in the U.S. will shrink for the first time in history.
Ms. Whitney continues by noting that the U.S. credit card market is behind the mortgage market by 18 months in terms of difficulties and that “… just over 70% of U.S. households have access to credit cards” and that “90% of these people use credit cards as a cash-flow management vehicle, or revolve payments at least once a Year.” She expects that “billions in credit lines will be cut early next year…” negatively effecting our GDP.
THE ECONOMY–HOUSING : “Foreclosures soar 76% to record 1.35 million” says the CNNMoney headline (money.cnn.com) of 12/5/08.
This article says that the 76% is an increase from just one year ago and that we’ve never gone into a recession with a housing market this weak.
GEO-POLITICAL OBSERVATION/OVERVIEW OF I & I : Our section title here refers to our, PrudentHome, overview/observation opinion regarding the geo-political situations of India and Israel; two world-class hot-spots.
First India. It seems that our Sec. of State was not able to get any firm commitments from India regarding her actions/intentions vis-à-vis Pakistan in the terrorist attacks on Mumbai. India’s responses appear to be contingent on Pakistan’s co-operation in the investigation and the results of the investigation itself. The Indian position is made more complex due to India’s being on the cusp of national elections.
Israel. Israel is currently talking in terms of “going-it-alone”, without either the approval or the help of the U.S., should it deem a first-strike on Iran’s nuclear facilities necessary. Iran for it’s part is testing missiles, increasing the production of nuclear material, and running large military exercises.
These are two situations to keep a close eye on.
FOOD–NOW: REUTER’S in a 12/4/08 article, “Record number of American’ are now using food stamps: report”
This article observes that 1 in 10 Americans are now using food stamps to help meet their food needs. This number is up 17% from a year ago and is approaching the all-time high of 10.5% of population reached in 1994. This situation is made more stark when it’s noted that 11% of households are struggling to get enough food to eat and to meet their increased demands for food.
FOOD–THEN: Sharon Astyk, Casaubon’s Book, in an Energy Bulletin piece (energubulletin.net) of 12/5/08 entitled “No, Just No”, references the third recent article predicting extremely difficult times ahead (recent PrudentHome articles have referenced the first two). The predictions she refers to in her article may be the most chilling of the three as the author is Gerald Celente, the CEO of Trends Research Institute. Mr. Celente is a renowned predictor of future trends and events, at both the national and international levels, in the areas of social and economic conditions.
Ms. Astyk presents Mr. Celente’s view regarding America in the near term as going “… through a transition the likes of which no one is prepared for”. Ms. Astyk notes “…that Mr. Celente goes on to predict that by 2012 America will become an undeveloped nation, that there will be a revolution marked by food riots, squatter rebellions, tax revolts, and job marches, and that holidays will be more about obtaining food, not gifts.”
Again, Mr. Celente’s predictions are harrowing not merely for their content but for Mr. Celente’s track record in predicting events such as “…the 1997 Asian Currency Crisis, the subprime mortgage collapse, and the massive devaluation of the U.S. dollar …”. ( Mr. Celente’s predictions are viewed as a near gold-standard in evaluating future events and trends by businesses, governments, and those who want/need to know.)
Ms. Astyk concludes her article by commenting, “…I’ve spent two years revising a book about the food system that makes pretty much the same arguments that Celente is making – that both the economic and material realities of our food system are so fragile and subject to disruption that we’re facing hunger in our lifetimes.”
A PrudentHome note: It’s perhaps noteworthy that the folks of stature predicting the difficult times ahead have something beyond their predictions in common: it’s that their predictions seem to fall short in magnitude and appear more quickly than proposed.
Keep your eyes on the horizon.
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