Showing posts with label Recession. Show all posts
Showing posts with label Recession. Show all posts

Happy New Year! Ready For Another Prediction? This Time Try 30-40% Unemployment Rates.

1/01/2009 12:35:00 AM

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2009-print-preview-blogSay goodbye to 2008.  Never to be here again and hello to 2009.  New Years Day, a new year, a new day, and a time for new hope.  And with that, why wait to begin the misery of what might be in store for next year.  What say you?

I happened across a strange prediction for our wonderful new year of hope.  It’s probably not what you want to hear, but hey, since when do I ever tell you what you want to hear, but instead write about what you should think about.

Now, I’ve never heard of this organization before.  I don’t know anything about them.  But.. well.. what they have to say is rather scary to even think about.

How about the notion of topping Great Depression numbers of 20-22% across the nation?  What if I said someone is predicting 30-40% unemployment by September 2009?  How’s that for scary?

This commentary comes from a “We Beat the Street” commentary, an Investment Strategy company, via KITCO.   The author is Roger Wiegand, who I’ve also never heard of before and don’t know too much about, other than his biography on We Beat the Street and a bio on IIC.  But , lets take a gander into his crystal ball, shall we? [Hat Tip to Nightblogger]

Our new president is determined to hand out $860 Billion to One Trillion dollars in a Herculean effort to literally buy a new economic recovery.  While some of his ideas are noble indeed the overall plan will have little effect and Great Depression II shall take hold in 2009 with crashing stock markets in May and September-October 2009.  We think the worst of the worst hits in late September 2009.

Hey, what do you know, the one year anniversary of when millions lost nearly all of their 401(k)s when the market dropped out.  What a time to choose!  But I’m getting ahead of myself… lets hear about spring.  A time of green, fresh air, and everything coming back to life.  But the death of the stock market according to Wiegand.

During the spring of next year we see:

(1)  A second larger wave of residential housing mortgage failures; [Now, to be honest, I heard about this about two months ago.  Its a different kind of mortgage than the ARMs but it’s more “deadly” to the market  and banks.  Good thing we don’t have to pay a mortgage!]

(2)  The first big wave of auto loan failures and repossessions; [I heard about this one too about two months ago.  But if people can’t pay their mortgages, the next big ticket item is their car.  Good thing we don’t have to pay a car loan or lease!]

(3)  Over $40 billion in credit card defaults, smashing the bank lenders; [This is already happening, and again, another “big ticket” item are peoples credit cards.  Good thing we’ve never EVER used them.  If you can’t pay for it in cash, you don’t need it.]

(4)  The first wave of commercial mortgage failures and foreclosures on shopping malls, office buildings and other commercials; [This too is inevitable.  It is estimated that over 16,000 businesses will fail in the next year, leaving a lot of empty space in malls, strip malls, and business complexes.  Already, Circuit City has left quite a few leases up in the air, due to them filing bankruptcy.  Whose next?]

(5)  And finally, the grand smashing finale of CDS Credit Default Swaps originated with No margin money or down payments!  We heard today the total is 500 trillion!  I cannot even fathom that number.  These five converging train wrecks could take the Dow from a dead cat bounce of 10400-10800 back to 7250, or even 6600, or 5600.  [My other half and I have said, the Dow will crash out around 5000 in 2009.  So much for our stocks.]

But if you think the Dow at 5000-6000 is bad, you haven’t heard it all yet.  The above is just in the spring of 2009.  There’s how many months in the year, and how many seasons?

Then, in late September and early October, the New York, London, Tokyo and Asian markets take a monster crash.  how low is low and how bad can it get?  We think the Dow could end-up on November 1st, 2009 anywhere from 5,600 to a low of 3,000 or even 1,500. 

Ouch…. and how interesting that it’s just about the same time that the stock market crashed in 1929.  But the best.. err.. worst is yet to come.  And the capitalization isn’t my emphasis, it’s Wiegand’s.

Unemployment nationally in the USA is now touching 16%.  The officially posted number is somewhere near half of that.  By the fall of 2009, American REAL UNEMPLOYMENT WILL BE NEAR THE ALL TIME 1930’S DEPRESSION HIGH OF 25% UNEMPLOYED.  SADLY, THAT IS NOT THE WORST AS IT GETS MORE DIRE.  WE PREDICT, USA UNEMPLOYMENT REACHES 30-40%.  IN THE RUST BELT STATES OF MICHIGAN AND OHIO, WHILE 40% IS NOT UNREALISTIC.

Great… wonderful.  Buy your tents, Coleman stoves and sleeping bags now.  And maybe a nice little 9mm and shotgun.  Aww heck, splurge for a Desert Eagle.  Size is intimidating!  Make sure to not forget the ammo!  And begin to stockpile food, you might need it.  This might be the “new” money and a good bartering tool, as long as people don’t kill ya for it.  And LOTS of stocking up on toilet paper and um.. ah… guys look away on this one… feminine items.  And don’t forget things like cold medicine, aspirin, and topical antibiotics!But more realistically, stockpiling at least two months of food is a good way to make sure you have a food supply and “other” items if you lose your job or have to choose between food and a house payment.

The American federal government departments for food stamps and the job of providing welfare provisions will be overwhelmed.  This will be a Katrina event for the hungry citizens of the United States.  Urban areas will see skyrocketing crime and in parts of some cities, life could become totally uninhabitable.

The last report we’ve seen on those receiving food handouts and related welfare amounted to 11 million USA citizens with 700,000 children going hungry each day.  We suspect the true amount of those needing food help will rise to 35 million with an untold tragic number of them being little, defenseless children.  Governments remain in denial and are not prepared for this national emergency whatsoever.  As things worsen, food riots and others with violence aimed at the “have” are common.

Did I happen to say that I am also professionally trained in sword fighting?  And raised by a Father who taught me to shoot a .38 & .45 around the age of 8 and a shotgun at the age of around 10?  Who would have ever thunk it that I would need those skills in my personal life!  And a chick to boot!

And as for that stockpiled food, didn’t I just say it was going to be the new “money”?  Dollars will be worthless. 

The number of bank failures over the next three years will be in the thousands.   In addition, the US Dollar’s valuation could break recent lows near 70.00 on the index, dropping to 46.00 by 2011 or 2012.  Inflation or potentially hyperinflation is quite real as the Federal Reserve and US Treasury strain to print and circulate cash to prod our stalled economy.  It is simply not working even with the dramatically lower interest rates of late.

But to continue, Wiegand says just like in the Great Depression, families are “renting” out rooms, or “bunking” up to pool their money.

Consumers are broke and going broker.  Households of interrelated families are doubling and tripling up even with several employed members being under one roof.  Basic costs of rent, mortgage payments, health care, food, utilities and taxes are too much to bear on stagnant and in some cases falling wages.  In some areas of America, there are entire subdivisions of homes totally abandoned or existing with only a hand full of occupants.  The millions thrown at lenders for new mortgages are not getting through to buyers, as there are fewer of them.  We are witnessing a system breakdown.

Isn’t this already happening?  I recently blogged about Detroit and how many of the homes are already empty, and have been gutted for their copper and such.  And additionally, many who are behind on their mortgages, and said bank gets a bailout, refinances the mortgage, only to increase the payment by $300 to $500 a month, and also demands several thousand dollars just to stop the foreclosure within 30 days!

And states and cities will be broke also, so forget about getting any help from them, which is already happening.  Say bye bye to welfare and to schools.

Municipalities and states are sinking into a spending, debt-ridden morass.  It was reported today that 22 of 50 USA states are in serious budgetary trouble.  California is one of those in terrible condition and Michigan is already technically broke as many of her cities. [Don’t forget Ohio as the governor called Rahm and said he needed $5 billion!]  Detroit will file bankruptcy in 2009 and there will [be] many other surprises as well.  There will be a cascade of bond defaults and the outcome will cap the ability of these cities, states and countries to borrow ever more.

Hey, at least we are all in this together….. *smirk*  True worldwide Socialism!  YIPPIE!

The shining light through all of this is the faster we find the bottom the faster we can recover.  Sadly, the recovery process will take years.  Futures and commodities traders should continue to earn steady profits as the stock markets slide into oblivion for years.  We see no recovery until 2015.

Let see… Obama Jan 2009 – Jan 2013.  I wonder if he will run for re-election?

I find it interesting that there is no mention of the Big 3, or of a company such as Wal-Mart still being in business.  If Wal-Mart collapses, we are in trouble.

But wait.. according to the Russian nutjob, by 2010 we will be in a civil war and the United States will be split between Canada, China/Japan, Mexico and the EU with Alaska going back to Russia and Hawaii going to China/Japan so all of this won’t happen!

Of course there’s always Gerald Celente’s prediction of a total collapse of the economy and a revolution by 2012.

So well.. there’s my first post of the new year…… oh and… um… might be a little late… but have a happy and prosperous  New Year, while you still can? *shrug* *nervous smile*

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Detroit Is In Depression, According to Residents.

12/27/2008 01:09:00 AM

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MI-Detroit1bIn Detroit, they aren’t calling it a “recession” they are calling it a “depression.”  Warlena McDuell who is 81-years-old and has lived through the Great Depression of the 1930s says, “It’s a depression – not a recession.  It will get worse before it gets better.”

WXYZ conducted a telephone poll of 500 people in Detroit.  Sixty-five percent believed the country was headed towards a second Great Depression.  Nearly all. 99 percent, gave the economy a negative rating.  Seventy-six percent said things in the country are headed int he wrong direction.  And 81 percent believed that Michigan's economy will be worse off in 2009.

According to the South Florida Times, Detroit’s crime, poverty, unemployment and school dropout rates are among the worst of any major U.S. city.  The bus system is widely panned; car and home insurance rates are high.  Chain grocery stores are absent, forcing many Detroiters to rely on high-priced corner stores.

Meanwhile the 11th-largest US city is running out of money while the two of the Big 3 are needing loans from the Feds.  Detroit isn’t even sure exactly how short of revenue it is, the largest estimate from the mayor’s office puts the deficit at $300 million and climbing on an annual budget of $3.1 billion.  Mayor Cockrel ordered all city departments to cut their budgets by 10%.

And then there is the issue with the ex-mayor in jail for a text-messaging sex scandal.  Even the football team is in tatters, the Lions are within one loss of an unprecedented 0-16 season.

And then there is a new issue that Detroit has been illegally taking water from Canada for 44 years.

UNEMPLOYMENT INCREASES 

The unemployment rate in Detroit is currently 21%, meaning nearly 1 our of 4 people are unemployed.

UTILITIES INCREASE

Michigan regulators recently approved electricity and natural gas rates for customers of Detroit Edison and Consumers Energy.  The $83.6 million in hikes for Detroit Edison included a rate “realignment” for commercial customers designed to cut energy costs for businesses, while apparently raising the cost for residential consumers.  Consumers Energy’s hike in natural gas prices totaled $22.4 million.

HOME VALUES PLUMMET AND FORCLOSURE RATES HIGH

The average sale price of a Detroit home so far in 2008 was $18,513, in the first nine months of the year, down from $40,011 in 2007, a drop of 55 percent, according to the Detroit Board of Realtors.  According to The Detroit News, home values in Detroit plummeted to an average value of less than $10,000; some foreclosed homes, gutted by scrappers, were placed on the market for $1.00; many other stand vacant or are burned to the ground.

Protestors recently picketed Bank of America, chanting “Bail out the people, not the banks.”  According to one protestor, her 30-year, fixed interest rate requires a monthly payment of $1,030.  Bank of American then received $25 billion in federal bailout money.  Under the terms of the restructured mortgage offered by the bank, her payment would go up $300 monthly and she would have to make a $2,000 payment in ten days.  But this would only put off the sale of her home until some time in January.

HOMELESS INCREASES

The chronically homeless community makes up 20% of the 19,000 people in metro Detroit who at any given time have no place to live.  According to Amber Arellano, a columnist on Detroit News, “Tent cities are sprouting up like winter grass in public parks here.”  “Doctors say they’re seeing suicide and depression skyrocket.”

DEMAND FOR FOOD BANKS SERVICES INCREASE

DeWayne Wells, president of Gleaners Community Food Banks of Southeastern Michigan, said demand is up by 25 percent from a year ago in the region’s food banks.  “Many people are first-timers – they have no idea how to navigate the system, how to qualify for food stamps.”  In a different report, Gleaners was reporting a 70 percent increase in need for food help this fall compared to fall 2007.

By next year, Gleaners anticipates local emergency food needs will rise as much as 50 percent.  “Its going to take much more than just food banks,” Gerry Brisson, Gleaners’ senior vice present said.  “The food bank network was designed to be a short-term stop gap.  It’s going to take good government to really help families who are really going to need the help in the mid-term.”

SCHOOLS CLOSING

Detroit is contemplating the closure of 63 schools by 2013.  At two area high schools there is now a lack of heat and lights in the classrooms and a shortage of teachers.

POVERTY LEVELS

According to the most recent numbers from 2007, 47.8 percent of Detroit children lived below the poverty line of $21,000 for a family of four while the national rate at the time was 18 percent.  Detroit’s overall poverty rate was 33.8 percent, the highest of any major city.

CRIME DOWN DUE TO LACK OF ‘VICTIMS’

The FBI’s latest statistics, for 2007, show Detroit with the highest violent crime rate of any major city. 

According to Jeriel Heard, chief of jails and courts for Detroit’s Wayne County, he reported that property crime in some Detroit neighborhoods had actually stabilized or declined because targets of opportunity were fewer now that most remaining residents are poor and many of the homes have been abandoned and cannibalized.  About 44,000 of the 67,000 homes that have gone into foreclosure since 2005 remain empty.

But yet, Detroit’s closure rate on homicides this year is expected to be 30 percent, half the U.S. average.

JAIL BETTER THAN THE REAL WORLD, SOME CHOOSING TO REOFFEND CHOOSING JAIL OVER HOMELESSNESS

Jeriel Heard, chief of jails and court for Detroit’s Wayne County, said jail conditions may deteriorate because of budget-related pressure to eliminate a quarter of the roughly 800 jail deputy positions.  He also confirmed that some offenders, notably those without homes of their own, were now expressing reluctance to leave jail when their sentences were done.

For the first time, I’m seeing guys make a conscious decision they’ll be better off in a prison than in the community, homeless and hungry,” Joseph William of New Creations Community Outreach said, which assists ex-offenders.  “In prison they’ve got three hots and a cot, so they commit a crime to go back in and come out when times are better.”

CHRISTMAS DAY IN DETROIT

The Salvation Army of Detroit expected to feed as many as three thousand homeless and needy people on Christmas Day.  A breakfast was provided by the Salvation Army and consisted of eggs, French toast, fresh fruit and a variety of breakfast meats that was served at Detroit’s Masonic Temple.  In addition to hot meals, the homeless and needy were also given gifts of winter hats and scarves, and counseling by a social worker if needed.  A full turkey dinner was also handed out to thousands of needy individuals and families via the Salvation Army’s Bed and Bread program.

Christmas day was also Mitzvah Day – the day many in the Jewish community do good deeds, or mitzvahs.    There were nearly 1,000 Mitzvah Day volunteers at more than 40 metro Detroit locations.  At one church, 18 volunteers handed out clothes and served a Christmas meal to nearly 300 people gathered at the church.

NOT ONLY DETROIT, BUT MICHIGAN OVERALL

According to the Battle Creek Enquirer, Michigan is the only state in the union that experienced both a drop in personal income and a rise in the poverty level in 2007.  According to a New York Times story in Nov, 08; Michigan is in its fifth year of a recession, leading the nation in unemployment and 130,000 residents have been out of work for so long that they have run out of unemployment benefits.

Michigan’s overall unemployment rate rose again to 9.6 percent in November, the highest monthly rate since March 1992, and the highest monthly state unemployment rate in the country.  About 113,000 jobs were eliminated through November.  And meanwhile, Michigan has now lost people for a third straight year, the only one of the 50 states to do so.  And the state unemployment fund is in the red.  The state borrowed about $566 million from the U.S. Department of Labor, which is nearly $100 million more debt than just three weeks ago.  Next month, Michigan will begin levying a special “solvency” tax, said The New York Times.  This “solvency” tax will charge employers whose workers have cost the unemployment insurance fund more than the companies have paid in an additional $67.50 per employee.

Michigan faces a $1.8 billion deficit.  Governor Jennifer Granholm and lawmakers have approved a plan to cut $146 million from the state budget, including the closure of prison facilities in Ionia and Coldwater.  The plan reduces state spending on welfare programs by more than $63 million, due largely to fewer cases as a result of tighter eligibility requirements.  The state also recently increased its income tax rate from 3.9% to 4.35%.  Gov.

Medicaid enrollment was up 70,000 in the last year, according to the health department, for the entire state of Michigan.

Gleaners has secured additional food via the USDA to help reach the target goal of about 9 million donated pounds through Dec. 31 for more than 400 area soup kitchens, shelters, churches and pantries.  That figure is a 30 percent jump from 2007, which stems partly from greater need in outlying areas of Macomb and Livingston counties.

Demand for food is high at the Salvation army Eastern Michigan Division’s Farmington Hills corps who at one time only needed to restock its shelves once a month, is now restocking once a week.  “Our food is flying off the shelves.”  The Salvation Army hoped to have netted $8.5 million from its annual Red Kettle Campaign however, as of the beginning of the week of Christmas, donations were down about $623,000 from the same period last year, but overall demand for services was up 20 percent.

Homeless is up in cities in Michigan and nationwide, by an average of 12 percent, according to a survey by the U.S. Conference of Mayors 0 and the worst could still be to come.  The Michigan Coalition Against Homelessness reports there are at least 80,000 homeless people in the state.

About 71 percent of more than 300 nonprofits statewide noted a spike in demand for services this past year.  Meanwhile, 63 percent of the Metro Detroit agencies surveyed reported a drop in financial and in-kind support.  Many of the states' approximately 43,000 nonprofits are reducing staff, scaling back operations or exploring partnerships to offset a steep decline in funding. 

A once thriving auto hometown of Pontiac according to one columnist, resembles war-torn Baghdad.  Recently it’s unemployment rate hit the Great Depression-level of 20 percent.  GM is its only large-scale employer left.  The city is too broke to pay for adequate police staffing.  Vigilantes have begun patrolling neighborhoods to counter the community’s rising murder rate.  Even the columnist was not immune to this new rage.  On a recent evening her husband and brother walked along Pontiac’s Main Street, a truck load of four 30-something men, two armed with gun, drove up and asked if he had seen a man they were looking for. 

In Kalamazoo, the average number of children staying at the Gospel Mission on any given night is up 19 percent over last year, with an average of 64 children staying each night.  An average of three newborns a month start their lives at the Gospel Mission, after their mothers are discharged from the maternity ward.  Additionally in Kalamazoo, the Kalamazoo County Child Abuse and Neglect Prevention Council reported that their agency is getting more and more reports from concerned neighbors and others who are worried about children being left home alone by parents who cannot afford childcare while they work.

In Saginaw County, the Child Abuse and Neglect Council of Saginaw County reportes that overall their agency has seen a 23 percent increase in demand for services over last year.

 

In Grand Rapids, at the Guiding Light Mission, a steak dinner was served to just over 100 people on Christmas Day.

SOURCES:

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40,000 Pick Free Vegetables At Colorado Farm In One Hour.

11/27/2008 08:14:00 AM

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So while I’m in the middle of cooking, and the other half is still asleep, why not blog?  :D

In Colorado 3 miles west of Platteville at Miller Farms on Colo. 66, a farm couple opened up their fields to anyone who wanted to pick up free vegetables left over after the harvest.  The couple expected about 5,000 to 10,000 to show up to dig for the free potatoes, carrots, beets, pumpkins, onions and leeks.

Instead, about 40,000 showed up in an estimated 11,000 vehicles.  About 30 acres of the 600-acre farm 37 miles north of Denver reportedly became a parking lot.  It was estimated that 600,000 pounds of produce was harvested on Saturday.  The event was due to be two days, Saturday and Sunday however, the fields were picked clean on Saturday, cancelling the event on Sunday.  The food was gone within an hour, before noon.

“Overwhelmed is putting it mildly,” Dave Miller stated.  “People obviously need food.”  “We had originally planned to take everyone by tractor to the fields but due to the overwhelming response we had to allow people to walk or drive themselves,” said Dave Miller.

“It was completely more than we expected,” said David Patterson, the farm’s operations manager. “It was absolutely insane, but it was one of the most wonderful things we’ve ever seen.”  “It’s an overall sign of the times,” Patterson added.  “Out country is in some bad economic times and there are a lot of people who have lost their jobs.  I probably talked to 50 people who were out here this weekend, just going from group to group chatting, people who’ve lost their jobs.”

Weld County sheriff’s deputies helped direct traffic and the Colorado State Patrol did issue citations for cars illegally parked on the side of the road.  Many families had to be turned away.

The Miller farm opened up free to the public for the first time this year after hearing reports of food being stolen from churches.  Last week in Denver, thieves broke into freezers owned by the Park Hill Grandparents Organization and stole Thanksgiving trimmings – including more than a dozen frozen turkeys – set to be donated.

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Exactly Who Is President And Whose Not Here? [Who Is In Charge?]

11/21/2008 08:18:00 AM

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94666-004-B6D627DFAccording to Bloomberg, Obama’s transition team is “exploring” a “swift”, prepackaged bankruptcy for the Big 3 as a possible solution to the industry’s financial crisis, including contacting at least one bankruptcy-law firm to say that Daniel Tarullo, a professor at Georgetown University’s law school who heads Obama’s economic policy working group, would call to discuss the workings of a so-called prepack plan.

When checking with the team’s press office, a Stephanie Cutter said, “We have not put out anything specific for the auto industry except that something needs to be done immediately.”

Congress yesterday gave the Big 3 until Dec. 2 to show a plan of action showing that taxpayers and auto workers would be protected.

So first why is Obama’s team working on something for now?  The man isn’t inaugurated as president until January 20th.  Obama isn’t even a senator anymore, as he resigned last weekend.  And he seems to think his team can come up with something that Congress hasn’t?  The arrogance of this man continues to completely shock and astound me.  I wouldn’t be surprised if Obama calls Bush and says “Hey buddy, ya know, it’s the end of your term.  Why don’t you go ahead and hand things over to me ahead of schedule.”  But then again, this is Obama’s “testing” time.  The actions and attitude that you see now are a pre-cursor to how he will be once in office, and that frightens me.  Between most of his transition team being nothing but his friends, who have absolutely no real world experience in Washington, and the fact that he’s basically making Clinton’s cabinet his own speaks louder than anything.

Obama obviously doesn’t have a clue as to how the real business world works.  You don’t just hand the Big 3 their money, a blank check, you ask them for a plan of action.  It’s like anything else with business when it comes to asking for money for equipment or a project.  You don’t just submit a request for say, a million dollars in a company that makes 10 million a year profit.  You have to justify the need for the money, how you are going to spend it, what you are going to spend it on, why it is needed, and how it will be productive and profitable.  If you can’t do that, then 9 times out of 10, you are not going to get the money if you can’t justify the need, and your plan of using it.

And with this bailout, there is no guarantee that it’s going to work.  The definition of insanity is doing the same thing over and over again expecting different results.  Why keep doing something that isn’t working?  And why bailout the Big 3, when no one has any money to purchase a new car, because there are over 10 million unemployed people in the United States?  And for those that do have the funds and/or credit to purchase a new car, they can’t get loans because the banks aren’t giving loans.  Bailing out the Big 3 isn’t going to work.  All it is going to do is make an ocean of cars in parking lots, ports and dealerships.

The Big 3 need to fall to change the way they are doing things.  Their cars are substandard compared to the rest of the world and are overpriced compared to the rest of the world.  Thirty years ago was a different matter, today, I see more new cars broke down alongside the road than I do cars made thirty years ago.

And what happened to Obama’s promise that we, the taxpayers, were the first in line for help when he got into office?  All I’m hearing about is the Big 3 and the environment for his first days in office.  Bailing out the Big 3 and making stricter legislation on the environment isn’t going to “stimulate” the economy, it isn’t going to give people jobs, it isn’t going to reduce unemployment, it isn’t going to help the stock market, it isn’t going to give people back their 401(k) that are basically becoming worthless, it isn’t going to do anything other than increase our tax liability in the long run.

And what Obama needs to remember is that the Big 3 probably aren’t going to make it until January 20th, and he still needs to get his plan approved by Congress.  He isn’t a dictator.

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Lessons From The Great Depression [My Parents]

11/21/2008 01:49:00 AM

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1sn99hitBoth of my parents lived through the Great Depression, although my father was only 4 years old when the stock market crashed.  But the lessons he and my mother, along with my grandparents learned from the “great crash” continued on with them throughout their lives, with some until the day they died.  Although I never remember any of them suffering for anything, in fact them paying cash for new cars and cash for homes, they were all extremely “tight” when it came to money.

And I think it’s time to share a personal side of my life with you, and share with you what I learned from my parents and my grandparents and how they lived through the Great Depression, and how it affected their way of life for the rest of their lives.  They taught me many of the “old” ways, and here I share some of them with you in hopes that you take away something that will help you in the long run, if things go bad along with 17 tips to make your life easier.

I have memories of huge gardens started every spring with long hours of summer spent tending to that garden.  Meals towards the end of summer of nothing but vegetables; corn on the cob, green beans,  red tomatoes sliced thick, cucumbers, and collard greens, all fresh from the garden that morning. 

When there was an excess crop, which was nearly every year as planned, the canning rush would be on.   I remember shelves lined with canned tomatoes, tomato juice, green beans, corn and carrots.  Onions would he pulled, washed, hung and dried in the basement.  Also in the basement, which had a dirt floor, was a potato “shed” that had been filled with dirt.  The potatoes would be stored in this dirt for winter use.  And of course were the jars of zucchini, pickles and relish with onions, cauliflower and peppers.   Peas were also a yearly crop however, those would be blanched, and then frozen.

We were also lucky enough to have a huge apple tree, a huge mulberry tree and a small vineyard of concord grapes.  Since we lived near the woods, there were always wild strawberries and blackberries for the picking in the summer.  We were also lucky enough to have a wild walnut tree in the woods.

As for meat, every so often my parents would go out and purchase a half side of beef, a couple whole hogs, a couple lambs, and a dozen chickens or so.  The beef, hogs and lamb of course were already slaughtered however, my father would spend hours using a saw and knives cutting it all up, where mom would be waiting to wrap it in butcher paper, write on the tape of the contents, and place it in the freezer.  Then the Kitchenaid mixer would come out, the meat grinder attachment went on, and hamburger and sausage would be next.  I have memories of pork shoulders “curing” in closets and memories of my father beheading a dozen chickens, my mother dipping them in boiling water, and she and I plucking the feathers.  By the end of the night, the chickens were cut up, in the butcher paper, and in the freezer.

And then there was “huntin’” season.  I bagged my first deer at the age of 13 and ended up on my butt.  But hunting season was for deer, squirrel, pheasant and rabbit.  Turtles were awesome for soup.  And summers were spent many times fishing for crappie, bluegill, and walleye.  All of it ended up on the table or in the freezer with nothing going to waste.  And no, I never ate raccoon, possum, rats or groundhog… that’s just…. ew.  But I’ve had rattlesnake, alligator, moose, buffalo (farm) and bear and would eat it all again in a heartbeat.

Everything eaten was pretty much made from scratch, even bread made by my father every Sunday afternoon, from scratch from the large cakes of yeast he would purchase.  At the time bread machines didn’t exist.  They even made their own spaghetti and noodles.  The only thing that they did not “make” as I remember were milk (if you will), cheese, ice cream and butter, although they did try for a time to make butter, but decided that the cost of buying it outweighed the time to make it.  It seems the only things that were bought on a regular basis were milk products and eggs, although if I was lucky enough to get a box of cereal, it was eaten with powdered milk.  Breakfast was toast with homemade jam and oranges.

For me while growing up, grocery stores were of the “verboten” goods of cereal like Corn Pops and Fruit Loops, Snickers, cupcakes, chips, buttery crackers, and exotic fruit.  The aisles of Pop Tarts, chips and such weren’t even gone down when my mother went to the store.  For my mother, grocery stores were for flour, sugar, eggs, baking soda, oranges and bananas.  Even pineapple was a treat and generally only served around holidays.  Coconut wasn’t bought pre-shredded in plastic bags, it was bought on sale, and then hacked open and shredded by hand.

At my home, at the time Pepsi was sold in 8-packs of glass bottles.  And that 8-pack would last at least two weeks.  Pepsi was only allowed  on Friday night when mom would make popcorn, or on Saturdays at lunch, when a home made pizza was made from scratch, crust and all.  Milk and mostly powdered milk was the drink at breakfast, and water for other meals and snacks.  There were no prepackaged foods like Stouffer's lasagna, as it was made from scratch.

Which leads us to eating out.  We never, ever ate out.  The few times we did were when my parents would drive 60-75 miles to go shopping out of town in larger cities for groceries.  Generally eating out consisted of Burger King back when they made real hamburgers.  There wasn’t any delivered pizza.  No Chinese food.  Nothing delivered at all. And no “quick trips” to McDonalds.  No Subway.  No TGI Fridays.

As for clothes, well, that was a little different.  My mother did make my father’s work shirts which one could hardly tell the difference between it and a store bought Arrow shirt.  She also made his ties.  She would sit at night crocheting or knitting a blanket, afghan or scarf.  Sometimes she would sit at the sewing machine making quilts from my old jeans, or old shirts.  She even made sheets and towels.  But clothes were store bought, and I could never go without my Levis.

Then there was the issue of electric.  One would never EVER leave a room and leave the TV, stereo, or lights on.  If you weren’t in the room, nothing was to be on.  And winters would find oneself under quilts she had made, with the furnace temperature turned down to below 50F, while there was a wind chill of –10F outside.  Summers were not inside with air conditioning, they were in front of fans with windows open, or sitting on the porch.  In the summers, clothes were line dried, and nearly always washed in cold water.  Showers lasted at most 10 minutes or I’d get a knock on the bathroom door and then a shock of hot water in the shower when they turned on the cold water in the kitchen.

But I didn’t live by candlelight.  I mean my parents did have oil lanterns, candles, flashlights and batteries for when the lights went out.  But I didn’t grow up with only a radio and books.  I had my own room, with a double bed, my own TV and my own stereo.  This of course was about the time when VCRs came out and I was in High School.  This was before the days of video games on TVs and computers.  If you wanted to play a video game, you went down to the local hangout with a pocket full of quarters.   I remember hearing that my cousin had gotten a ColecoVision and I was mad because my parents wouldn’t get me one.

This was around the beginning of the days of cable but we didn’t have it, as it wasn’t run out our way and many people still didn’t have it.  And there wasn’t an internet.  If you wanted to talk to your friends, you used a phone.  There were no cell phones and I didn’t have a phone in my room.  If you wanted to talk to your friends and you weren’t home, you used a pay phone.  If you wanted to see a movie, you went to the theater.  And I got an “allowance” in return for helping around the house, taking out trash, doing my own laundry, doing the dishes and helping in the garden.  It wasn’t much, and of course my parents encouraged me to save it, but that was my “fun” money for Pepsi, Lay’s chips, Snickers and the movies.

Which brings me to the point and lessons of this post.  Although my parents could have afforded to eat out everyday, could have afforded to buy everything new, could have afforded to to leave lights on, could have afforded to buy a new car, in cash, every year, and could have afforded to give me everything I wanted, they didn’t.  Instead it ended up in the bank in CDs so when they did buy a new home, which in 20 years I remember two of them being purchased with cash, they had it, and no debt.  And when my father was laid off permanently in the mid 80s after working for the same company 19 years and eight months.  He was only four months away from retirement, and he lost his pension (Yep they “f***ed” him.) and having that money in the bank was how they made it until he found another job since unemployment was really a joke, and still is.  Especially when the unemployment office told him he would have to take a job that was offered to him through the unemployment office at 25% of his previous pay, for the exact same job he had been doing, until at a later time he found a job that was closer to his previous rate of pay.  He was never the same after what the company did to him, and after what the unemployment office did to him.  He became a very, VERY, VERY bitter and mean man.  Especially after mom found a job, and worked for the first time since the late 60s, and covered the bills until things became “normal” again so they wouldn’t have to depend on that money in the bank… but they never were normal for him again especially when mom wanted to keep her job after he got the job that was closer to his previous pay.  It was a good thing that I was nearly 18 and ready to leave and I never went back.  Those are the things that hard times can do to people and it can affect you for the rest of your life.

My parents never had a credit card, and they never took out a loan, even when they bought a new house, and even though my father was eligible for VA loans.  If the freezer died, they went out the next day and bought one with cash.  If the car broke down, it was paid for in cash.  If they bought new furniture, even if a living room suite cost $5K, it was paid for in cash.  If they couldn’t afford to pay for it in cash, then they figured they didn’t need it and didn’t get it.

And they did all this while my father was the only one who worked most of the time, but we suffered for nothing.  So how did they do it?  By following a certain set of “unwritten” and “unsaid” rules which they carried with them from the Depression years.

1.  Live below your income.  If you can’t afford it, and you can’t pay for it in cash, then you don’t need it.  Do not spend more than you earn, do not go into debt.

2.  Needs, not wants.  You may think you “need” it, but in reality you only “want it” because you think you “deserve” it.  And I don’t mean to insult anyone, but those who are 15-30 will have the hardest time with this because you just don’t know what it’s like without.  You’re use to having it all, you’re use to getting it all, because you think you deserve it all.  You are going to have to learn to prioritize what you need over what you want.  You may think you “need” a new cell phone, when in reality you don’t even “need” a cell phone at all when you have a home phone.  If its something important, they can leave a message.  And which is important, having money for gas and food, or paying a cellphone bill you don’t need?

3.  Stay home.  My father had two-weeks of vacation a year.  That vacation was one week at home, and one week at my grandparents, 800 miles away.  Other than that, there was no travel.

4.  Eat in.  Like I have said, we hardly ever ate out.  Even my father took his lunch with him to work, which was generally the prior nights leftovers.  Mom always seemed to make just enough for us, and then enough for the next day for his lunch.  He even took a thermos of coffee with him to work.  Now lunches for me at school, were of course school lunches, for at the time full price lunches were $0.90 - $1.10, so it made more sense for them to give me a dollar instead of packing lunch.  There was no, “lets stop at McDs for a snack” on the way home.

5.  Skip the alcohol.  Now my father was from a mountain top in West Virginia, and he had a degree in Chemical Engineering, so I’m pretty sure you can figure what he did from time to time.  But even still, he always had a bottle of either 151 or Irish Whisky in the cupboard.  But those bottles, fifths, would last over a year.  My parents didn’t  really drink.

6.  Keep Your Car.  The first car I remember was a 1967 Comet and that was their only car until we moved about 30 miles out in the middle of nowhere.  Then they purchased a 1972 Monte Carlo.  My father drove the Comet to work everyday, and mom used the Monte Carlo.  That Comet lasted until 1981 when it was hauled to the junk yard, and they bought a 1981 VW Rabbit.  The 1972 Monte Carlo lasted until 1987 at which point they got a 1987 GMC truck.  The 1981 VW Rabbit lasted until 2001 when mom got a used Mazda RX7.  A car is for transportation, not a fashion statement.  During the Great D, many people didn’t have vehicles and literally walked for miles.  Today, our society doesn’t quite work as well with that, but if you are in a city, use the bus.  If you live somewhat outside of city limits, use a bike if you can.  Only use your car if it is absolutely necessary.

7.  Entertainment.  During the Great Depression the only entertainment was a radio,or books, or magazines, if you could afford them.  Everyone had a radio.  Going to the movies was a treat from time to time.  Now I’m not saying forget the TV and stick to radio.  What I am saying is drop the $100 a month cable and go to bunny ears.  Also forget buying movies.  Which leads me to online.  Now I am a full believer in the Internet.  I get my news, weather, just about everything from online, even TV shows and movies (and I’m talking legally.  If you wish to break the law, that’s your choice.)  I am a firm believer in paying the $20 - $50 a month for the Internet.  It really can be your “home entertainment center” if you use it as such.  And I’m not talking about sitting in front of the computer surfing for 8 hours a day, or chatting and such.  You can even find many many books, legally, online, if you search for them.

8.  What is old, is new.  Now my parents didn’t have to buy things used, or fix things back up if they broke, but they did.  And they took care of what they had so it would last.  My mother was the queen of garage sales, flea markets and auctions.  My father would fix the lawnmower (a push one, not a riding one) and rebuild the engine himself.  If its broke, fix it first instead of just throwing it out. 

9.  Use it up, don’t waste it, don’t throw it out, wear it out.  This statement may bring images of pack rats, but that is not what it is about.  It about simple things like adding water to the last bit of shampoo in the bottom of the bottle.  Its about not throwing any food away, even scraps.  And just because a platter or bowl you need doesn’t match the rest of your dishes, doesn’t mean that it’s not useful or needed.  Its about if there is a black spot in a potato, don’t throw the whole potato away, cut out the dark spot, and use the rest.  When I have leftover veggies, I throw them in the freezer, even if its only a spoonful.  When I get enough, I thaw them out, cook them down, grind them to make vegetable stock.  And just because there is a small hole in your shirt, doesn’t mean it goes in the trash.  Pick up a needle and thread and fix it.

10.  Make Do.  This one I’m putting in a category all by itself.   Make do is about just that, make do with what you have, work with what you have.  It is a mentality.  For example, I’m a woman so I learn to make do without a mixer, since the last one died and I haven’t found one on sale or at a decent price to replace it.  Recently I made a Key Lime pie from scratch.  Now the “filling” if you will. which is nothing more than key lime juice (hand squeezed), sweetened condensed milk, and egg whites, has to be “whipped”.  Well I don’t have a mixer, and I don’t have an egg beater. My “make do” was to take a whisk, place the handle between my hands, and rub my hands together.  Believe it or not, it worked.  It was a little bit of work, but I “made do” with what I had on hand.  That is an example of making do.  Instead of using paper towels, use regular hand towels.  Save plastic Ziploc baggies and reuse them after washing them out.  Now I don’t have a huge ball of tin foil under my sink, and I don’t save it, as I don’t use it that often.

11. Turn It OFF.  If you are not in a room, turn out the lights.  If you aren’t playing your XBox, UNPLUG IT.  Many electronics continue to use electric even if they are turned off, and still plugged in.  Digital TVs and monitors are notorious for this.  I’m not saying unplug everything when you leave a room, but try to use strip plugs where you can turn the entire strip off.  If you’re not using it, don’t leave it on.  And for winter heating, lower the thermostat to no higher than between 65F – 68F.  If you are cold, put on a sweater or sweatshirt.  Cover yourself with a blanket, or better yet, knit yourself one.  If its hot, open the window and use a fan, forget the AC.  Although in environments where daily temps are 90F+, AC/Central Air is a requirement but you can raise the temperature to 75F – 80F and use a fan.  Also, unless needed, wash your clothes in cold water and line dry them if possible if weather allows.  Remember, during the Great D, many homes did not have electric as it had not been run yet, and in fact nearly all outside of town didn’t even have running water much less a water heater.  Clothes were washed by hand.  Baths were taken by gathering water in buckets, and warming them on a stove.  Everyone shared the water.

12.  Learn to cook and stockpile.  This is not as hard as it seems.  It may seem more expensive to buy items to make things from scratch in the beginning, but in the long run, it is much much more inexpensive to stockpile, and cook from scratch.  There are many many good places on the web to find easy recipes to start with, and work your way up.  I buy lemons, limes and oranges on sale, juice them myself, and freeze the juice in ice cube trays.  This is much cheaper and healthier than buying the concentrate.  When I can get fresh veggies on sale, like green beans for $0.50 - $0.99 a pound, I buy five – ten pounds, blanch them, and freeze them in freezer bags.  Tomatoes are the same.  Cook them, grind them, and freeze.  I even make my own bread, however I cheat with a bread machine that I bought at a second-hand store, never opened, for $13.00.  I buy pasta and cheese and make my own mac and cheese.  I make my own rice mixes with rice, bouillon and spices.  I have an awesome knife (since my cutter broke) to cut thin thin potatoes for homemade french fries.  I use dried beans to make soup and baked beans.  I dry my own onions, celery and garlic to make onion, celery and garlic powder.  If you don’t have the pots and pans, I’m pretty sure you have a Goodwill, Salvation Army or second-hand store nearby.  Or check garage sales.  A little soap and elbow grease can go a long way.

13.  Get the most for your money.  Use coupons, sales and price matching.  I know many people hate using coupons and many people think that coupons are only for processed food.  And if you use coupons, then you are poor.  This is somewhat true, yet it’s not.  I use them religiously and combined with sales, on the average, every grocery bill always has a savings of 50 –70% between coupon use, sales and price matching.   This allows me to buy the higher price goods such as meat.  And we don’t eat SPAM, or processed food.  I buy roasts, strip steaks, hamburger, pork chops,  whole chickens and occasionally fish (but generally canned tuna and salmon).  If I can get all my pantry and dry box items at 75% off, then I can afford beef when it is on sale and still save between 50-70% off full price.  And I unlike many people, don’t make a list.  I shop for what is on sale, and I “stock up” on them.  If ketchup is on sale (since I haven’t mastered the perfect ketchup) and its a good price, I’ll buy 4-6 of them, if I’m running low on my stockpile shelf.  If whole chickens are on sale for $0.99 or less, I’ll buy four of them, take them home, cut them up, and then make chicken stock from the remainder and bones.  It took time to get to this point with the stockpile, but it can be done, and it can be done in about a two months time.  Recently I didn’t go grocery shopping at all for four weeks, and put a serious dent in my stockpile and freezer.  The following week, I spent $150 and got nearly $400 in grocery items, and just about replaced everything that had gotten low in my stockpile and freezer.  There are many good sites on the web to learn to how power coupon and shop for sales and learn what the corporate policies are for using those coupons.  It can be done, and it takes a bit of work, but the savings are worth it.

14.  Garden.  If you live in the country, you are blessed with land.  If you are in the city, in an apartment, you are cursed with concrete however, you can still grow herbs.  These take minimal space, and if things go bad, are a good thing to barter with.  And if you have the space, make a compost pile for free fertilizer.

15.  And another important thing.  Be flexible.  If things go bad, you are going to learn how to do everything you know differently.  You may have to take a job that you feel is beneath you, but at least it’s income.  Be open to suggestions and criticism, respectfully.  The person who is telling you something might be 20 or 40 years older than you, and just might know something that will help you through the hard times.  You may not be eating the quality or quantity of food you like or wish.  You may be wearing clothes that are two years out of style.  You may have to learn how to darn your socks.  I know these things seem silly now, but what if things go bad?  And you are going to hate it having to live in a way that seems foreign to you.  I have sort of lived the way my parents did, but not quite to their extreme.  I am falling back now on everything they taught me, and happy that I know what I do.  But I too do not look forward to really really having to scrape, do without, and make do.  It will be a bit easier for me in the beginning, if everything goes bad, but it won’t make it any happier for me.

16.  But the most important thing to remember, is no one is going to help you. You are on your own.  Don’t expect any handouts from the government, because if you get one, it’s not going to be too much.  Seriously.  Last year’s stimulus was $600.  Exactly how far did that money go?  And don’t expect food stamps.  States are running out of money.  And there probably won’t be soup kitchens like there were in the 1930s, and you really wouldn’t want that soup anyway as it was basically water.  Do not count on help from anyone but yourself.  That is the bottom line.  Only you can look after yourself.  And that is going to be the hardest thing for most people to accept.  And a lot of people are going to be angry, and that is expected and understood.  But remember, it’s not going to be forever.  It’s not going to be that way for the rest of your life.  It may only be two months, or two years, or it may be 10 years, but it won’t be forever.  And you won’t be alone in it all, as just about everyone else will be going through it with you.  It’s just getting through it.

17.  The biggest lines and suggestions I can give you overall is lower your expenses while trying to increase your income.  Ask yourself, do I “need” this or can I “make do” without it? 

Good Luck.

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How About Those Unemployment Numbers? [Nearing Great Depression Numbers]

11/20/2008 10:35:00 PM

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GD_unemp The Bureau of Labor Statistics reported on November 7, 2008 the following:

Employment has fallen by 1.2 million in the first 10 months of 2008; over half of the decrease had occurred in the past 3 months. […]

The unemployment rate rose by 0.4 percentage point to 6.5 percent in October, and the number of unemployed persons increased by 603,000 to 10.1 million.  [As a reminder, after the 1929 Stock Market Crash in October, the unemployment rate in 1930 went from 3.2% to 8.7%.  In the following year, 1931 the rate went to 15.9%.  And in 1932, the unemployment rate went to 23.6%]

That was as of October 31, 2008.  Are you ready for more wonderful news?

The Labor Department said today, that new claims for jobless benefits rose last week to a seasonally adjusted 542,000 from a downwardly revised figure of 515,000 in the previous week.  That is also the highest level of claims since July 1992 according to the Labor Department.

The four-week average of claims is worse:  It rose to 506,500.  The highest in more than 25 years.

If there is any good news in all of this, the Senate approved legislation to extend unemployment benefits through the holidays.  The White House has said Bush would quickly sign the bill.

The measure provides seven additional weeks of payments to those who have exhausted their benefits.  Those in states where the unemployment rate exceeds 6 percent would be eligible for an additional 13 weeks, for a total of 20 extra weeks.  And that is on top of an already 13-week extension approved by Congress in June.  Normally, unemployment benefits last up to 26 weeks.  With the 26 weeks, and the additional 13 weeks from June, and the additional 7 or 20 weeks, that is a total of 46 to 59 weeks.  Without the extension, 1.1 million people would have exhausted their unemployment benefits by the end of the year.

The number of people continuing to collect benefits for one week or more neared a 26-year high.  The number surged by 109,000 to 4,012,000 for the week ending Nov. 8.  The last time the figure was this high was for the week of Dec. 12, 1982 when it reached 4,381,000.

Some of the worse unemployment rates in the nation are in Rhode Island, currently at 9.3%. the highest since February 1983, when Ronald Reagan was in his first term as president. 

Michigan’s unemployment rate rose to 9.3% in October, the highest rate since July 1992.

In Nevada, the September unemployment rate was 7.3%, the most recent available.  In October, Nevada posted the nation’s highest state foreclosure rate for the 22nd consecutive month in October, with one in every 74 housing units receiving a foreclosure filing during the month – more than six times the national average and up 119% from October 2007.  EDIT:  The October unemployment rate for NV is 7.6%, rising again for the sixth consecutive month.

Arizona, with the second highest foreclosure rate in the nation, with one in every 149 homes receiving a foreclosure filing, had an October unemployment rate of 6.1% up from 5.9% in September.

In Florida, the September unemployment rate was 6.6% with October’s numbers being released tomorrow.  Florida is number three in the nation for foreclosures, with one in every 157 homes receiving notice.  The state’s unemployment hotline hired 200 extra employees and added 70 phone lines, but that hasn’t been enough to keep up with the demand.  EDIT:  The October unemployment rate for FL is 7.0%, a 15-year high.

Georgia is sitting at 7%, the highest in 16 years.

California’s unemployment rate for September was 7.7% the highest in 16 years, with October’s numbers being released tomorrow.  EDIT:  The October unemployment rate for CA is 8.2%.

In Illinois, the unemployment rate went from 6.9% to 7.3% in October.

Get ready everyone, it’s starting to get a little dark and looming on the horizon.  Oh and if you expect your local, county, state governments to help you, forget it.  Your on your own.  Maybe the Federal government will get around to us by the middle of next summer, after bailing out the banks, bailing out the Big 3, and taking their winter vacation to the Hamptons.

SOURCES:

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Is The United States In A Recession? [Look At The Numbers]

11/16/2008 10:38:00 PM

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down-arrow-small So is the United States in a recession?  Well, first lets look at what the “official” definition of what a recession is and how it “officially” is determined.  Then lets look at the numbers here in the United States and see where we stand.  And I’m asking for anyone to help me with a theory of what happened in June, 2008.

RECESSION DEFINITION

[Hey, its like Conjunction-Junction!  Sorry… I know it was bad.]

Currently Japan, Germany and all of Europe have announced that they are in a recession as of the end of the 3rd Quarter.  Basically here in the United States, we have the “luxury” of not being in a recession until our government tells us we are.

A Recession is “officially” considered two consecutive quarters (six months) of negative growth in the Gross Domestic Product (GDP).  This is highly debatable and depends really upon who is talking.  It also may take into other factors such as increasing unemployment levels, increasing inflation, house prices declining, the stock market dropping and the value of the dollar dropping.

The Gross Domestic Product is a number that is defined as the total market value of all final goods and services within a country in a given period of time.  To make a long story short;

GDP = consumption + gross investment + government spending + (exports – imports)

Consumption is how much one buys.
Gross Investment is the cost of investing.
Government Spending is how much the government is spending.
And exports are how many goods or commodities a country is sending outside the country and imports is how many goods or commodities a country is receiving from outside the country. 

A Depression is suppose to be when the GDP drops over 10%, presumed in one quarter.  I could be wrong about this, but who wants to use the “Big D” word?

UNITED STATES AND RECESSION

Technically, the United States is in a recession if you go by the two quarters of negative GDP growth, but I haven’t heard any “official” announcement. 

GDP: 

Quarter Rate Difference from previous quarter.
1st Q   (Jan - Mar) 2.5% + 0.1%
2nd Q  (Apr - Jul) 2.1% - 0.4%
3rd Q   (Aug - Oct) 0.8% - 1.3%

And one other thought to ponder.  If it were not for the government bailing out the banks, and now companies like American Express where would we be?  It’s not so much to think about then being bailed out, its more of the point that if they weren’t, they would be gone.

Additionally, the US automakers are now asking the government for money.  And in a new report, which I will be blogging about next, even retail outlets are now asking the government for money, such as JCPennys.  Additionally, retail outlets are going out of business.  Circuit City has closed 155 stores.  Linens and Things are gone.  Banks have been failing, 19 so far this year alone.  States are running out of money.  I’ve seen and read about all of these things happening, but not all at one time.  What is it going to take before someone says the “R” word for the United States?

A FEW MORE CHARTS FOR YOU TO GANDER AT

I have to honestly say, I’ve never seen the numbers quite like this.. all at one time.  Something happened in June 2008 to cause all this mess.  Because if you look at the numbers, by month, major jumps across the board began in June 2008.  If you look by quarters, jumps began in 2nd Q, 2008 with both continuing in July, 2008. 

All I can remember happening is that gas prices spiked to over $4.00 a gallon, thus causing transportation prices to increase, causing the price of goods to increase.    I also remember grocery prices seemed to jump about 30-40% around that time.  I don’t recall any “financial” failures at that time.  Anyone else have any ideas?

UNEMPLOYMENT

unemp

CONSUMER PRICE INDEX

The average price of consumer goods and services purchased by households.  To understand the numbers, the Bureau of Labor Statistics based the number 100 on an average of 1982 - 1984 prices.  This is called the base.  The base CPI is changed every so often with the last time being in 1967.  Basically this is so that you don’t notice that there has been a 1000%+ inflation since the start of this measure, which I will show via the inflation graph.  The other thing to note is that if the CPI goes up, that means things cost more to purchase and respectively, if it goes down, then something costs less to purchase.

So how to understand the number.  Lets say an item cost $1.00 on average between 1982-1984.  If today, in 2008 that same item costs $1.85 then the index would be at 185.  In the most current data the Sept, 2008 CPI is 218.78.  That means a 118.78% inflation from 1982 prices.  In other words, what on average cost $1.00 on average between 1982-1984 now costs $2.18

CPI IS NOT the same thing as Inflation.

cpi

INFLATION

So now that one understands what the CPI is, lets look at what inflation is. Inflation is simply “an increase in the price you pay for goods.”  In other words, a decline in the purchasing power of your money.  It is more like a “percent” whereas CPI is a “measure”.

For example, today $1.00 in 1984 has the same buying power as $2.11 in 2008.
If you compare this number $2.11 to the CPI number which is $2.18, you see they are close enough to be nearly the same.
CPI: 218.78 compared to the 1984 base.
Buying Power: $1.00 (1984) = $2.18 (2008) which is a CPI of 218.00 using the 1982-1984 base.
Which means what cost $1.00 in 1984 would cost you $2.18 today.

  So when you see the price of something from the Great Depression and say “WOW that is CHEAP!”  Its not quite accurate. 
Buying Power:  $1.00 (1933) = $16.83 which is a CPI of 1683.
This also means what cost $1.00 in 1933 would cost you $16.83 today.

For example, 1 dozen eggs in 1933 cost $0.15.  Now at first glace that is REALLY cheap.  But when you add in inflation, that same dozen eggs would be equal to $2.40 in 2008.  And the price of eggs today,not on sale does cost around $2.00, so in fact, prices were MORE expensive during the Great Depression.  I will get more into this comparison at a later date on a separate post.

But the thing to remember from the graph, is inflation is increasing, at a rather fast rate compared to two years ago and one year ago.

inflation

PERSONAL SAVINGS

Personal Savings is just what it means.  It means how much money we are NOT spending.

savings  

CONSUMER SPENDING
aka Personal Consumption Expenditures

This one for some reason, I’m having a hard time finding the exact numbers for however, here’s a graph from the BEA with the August data missing for some reason.  This shows that we are not spending the money we are making.

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BALANCE OF TRADE

The balance of trade is the difference between the monetary value of exports and imports.  A negative balance of trade is known as a trade gap, and means more is being imported than being exported.  We as a nation have been importing more goods for a considerable amount of time, versus the amount of goods we export.  Thus if consumer spending goes down in the United States, it effects the rest of the world.

trade

So here’s another question?  Are we in a recession?

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NBC Cutting Budget, and NBC-Telemundo Cuts Staff [But Continues Porn Soap Operas]

10/20/2008 07:18:00 AM

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nbc_telemundo "We are living in a time of unprecedented economic challenges, and it is increasingly clear that the worldwide economic slowdown will continue into next year," Zucker wrote. "The leadership team of the company agrees that we must take steps now to prepare for these new economic realities.  As a result, all our business leaders are being asked to cut their spending projections for 2009." 

Variety has reported that NBC Universal is planning to cut $500 million in spending next year to prepare for an expected continuation of the worldwide economic slowdown.  The article states President and CEO Jeff Zucker announced the cuts Friday in a staff memo.  The reduction would equal 3 percent of the company's budget.  Variety says division heads will decide how to reduce their spending.  But Zucker's memo suggested several ways, including staffing reductions and cutbacks in budgets for travel, entertainment and promotions. 

NBC Universal faces additional pressure because its parent, General Electric, has been coping with money woes on an epic scale, especially given its reliance on financial services in a frozen credit environment.  When GE reported third-quarter earnings on Oct. 10, NBC Universal was one of the few positive spots, with revenue up 35% from a year earlier to $5.07 billion and  profit that increased 10% to $645 million.  But on a conference call, Keith Sherin, GE's chief financial officer, said the company is worried about profits and advertising at the local station level and at the NBC broadcast network.  "We are cautious on the outlook here," he said.

Local stations, including NBC Universal's, are taking a hit due to declines in local advertising, especially from the automobile and retail industries.  Overall ad spending on local stations was already down 4.4% in the first half of 2008, according to TNS Media Intelligence. 

Variety said the memo didn't specifically mention any layoff plans and a person familiar with the situation said that no target has been set for reducing the company's headcount.

The announcement comes a day after NBC's Spanish-language Telemundo division announced that it was cutting 5% of its workforce, about 85 jobs, to cope with an advertising slowdown.    The cuts, made last week, came in response to automotive and financial services  paring back ad budgets, said Telemundo spokesman Alfredo Richard.  "Clients who have cut down spending may have cut down first on multicultural," Richards said.  "We're feeling the impact probably a little bit sooner than the general market."

800px-Withounopar-21011 The downsizing of Telemudo, based in Florida operating 16 stations in the U.S., comes even as its audience grew 160 percent from last year to 1.9 million viewers on its nightly 10 p.m. novela, "Sin Senos No Hay Paraiso (Official site)"  ("Without Breasts There Is No Paradise" (Wikipedia)) based upon the book "Without Tits There is no Paradise", about a prostitute who gets breast implants to lift herself out of poverty by attracting a rich cocaine smuggler and cast members who star in porn.

Several on-air personalities were let go, including Alfonso De Anda, former co-host of the morning show "Cada Dia," soccer commentator Alejandro Blanco, and Mexico-based entertainment reporter Luis Magana.

NBC Universal is the first media giant to outline specific cuts since the Wall Street meltdon.

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Financial Problems Are Motivating People to Violence.

10/14/2008 02:08:00 PM

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foreclosure-map-may-2008 More people are resorting to violence to solve their problems.  And law enforcement doesn't seem to be helping the situation in some situations.

Read stories of lives changed forever about Pamela Ross, Addie Polk, Carlene Baldermana, Karthik Rajaram, and the Padilla's due to financial problems.

Left, are foreclosure rates for May 2008.

 

 

PAMELA ROSS

In Tennessee, a woman fatally shot herself last week as sheriff's deputies went to evict her from her foreclosed home.  Pamela Ross, 57, and her husband were fighting foreclosure on their home when sheriff's deputies in Sevierville came to serve an eviction notice.  Jimmy D. Ross was in court on a matter related to a foreclosure on her home, while Pamela was home and had spoken to officers outside her home Monday morning.  While Jimmy was in court, he did receive a 10 day appeal, and the deputies did not, nor did they ever have a "Writ of Possession" to seize the home.

While officers were across the street from the home, they heard a gunshot and found Pameal dead from a wound to the chest.  Reporters attempting to get a statement from Sheriff Ron Seals on the matter have been unsuccessful.  The family's attorney has stated that deputies should not have been at the house, since they did not have the writ in hand.

In an update, it was learned that Pamela had spoken to officers outside her home Monday morning while her husband, Jimmy D. Ross, was in court on a matter related to a foreclosure on their home.  Jimmy doesn't believe the account the officers are telling.

"It doesn't add up," he said in an interview with The Mountain Press on Tuesday. 

He said he told officers Monday that he believed they were responsible for her death.

"One way or another, I said, whether you pulled the trigger or not, you killed my wife."

A friend, he said, talked to Pamela Ross by phone five minutes before her death.

She also left a message with a Galveston, Texas man whom Ross describes as a private attorney general that they had been advising him during the foreclosure and eviction procedure.  "She... said, scared to death, "They're at my front door and my back door, Odell, what should I do?'  And then the phone went dead," Ross said.

Sheriff Ron Seals said officers were sent to the house before the writ evicting the family was issued because they were concerned about what Jimme Ross might do if he were evicted.    Authorities say Ross has made threats against law enforcement and court personnel, and they were aware that he had guns in the home.

"Under normal circumstances, we would not do that (level of force), but we went out there knowing there were weapons in the house and there had been threats," Seals said.  Deputies had seen firearms at the house when they assisted IRS agents who searched the house in relation to a separate case several months ago.  Knowing that and of the alleged threats Ross had made, they decided to send officers there ahead of time. 

They also asked for Sevierville police to assist.  One officer was there as backup before Pamela Ross spoke to the officers and went back inside, Bob Stahlke, a spokesman for the Sevierville PD stated.  Many others converged on the house, however, after officers reporting hearing a shot from inside the house, Stahlke said.

Ross said he doesn't believe his wife would have walked out and spoken to authorities.  She spent most of her time in bed due to a chronic, terminal illness, he said.  "The whole thing was a scam to get me out of my home.  I'll put the bottom line to you," he said.

He denies ever threatening a judge or police officer.  "I don't make threats against anybody," he said.  "I don't have to make threats.  If I'm going to do something, I'll do it."  "We are private people, we don't bother anybody and I don't want anybody bothering us."

... As he left court on Monday, a deputy escorted him to the car and chatted with him as they walked.  When they reached his car, however, he said that the deputy informed him his wife had been in an accident and was being taken to a hospital by ambulance.  He decided to go home to change his clothes before being taken to the hospital.

As he neared his home, law enforcement officers were all around his home and swarmed his car, demanding that he get out.  Ross said he first refused to comply.  "This guy with this big Uzi or whatever it is jumped on the hood of the car there and pointed that gun at me, and they were screaming at me," he said.

He said he was handcuffed and held several hours before being told what had happened to his wife.

 

ADDIE POLK

A 90-year-old Ohio widow, Addie Polk, shoots herself in the chest as authorities arrive to evict her from house she has called home for 38 years.  A neighbor used a ladder to enter a second-story bathroom window of Polk's home after he and the deputies heard loud noises inside.  He found her lying on a bed, and he could see she was breathing, but also noticed a long-barreled handgun on the bed, she had shot herself two times.  Downstairs they found Polk's car keys, pocketbook and a life insurance policy laid out neatly where they could be found.

A congressman told Addie Polk's story on the House floor before lawmakers voted to approve the bailout package.  Mortgage finance company Fannie Mae dropped the foreclosure, forgave her mortgage and said she could stay in the home.

 

 

CARLENE BALDERMANA

080723_Carlene_Balderrama

John Balderman had filed for Chapter 13 bankruptcy three times from 2004 to 2006, but the courts had dismissed the petitions.  Under Chapter 13 debtors can usually keep their homes while paying off their debts.

In July, 2008 in Taunton, Massachusetts, Carlene Balderrama, a housewife who had hidden her family's mounting financial crisis from her husband, by intercepting letters from the mortgage company and shredding them before her husband saw them shot herself.  She tried to refinance but was declined.  On the day the house was to be auctioned, she faxed a note to PHH Mortgage Corporation of New Jersey around 2:30 pm warning:  "By the time you foreclose on my house, I'll be dead."  The suicide note also had another line, which was not initially released at the time of the news flash.  It read, "I hope you're more compassionate with my husband and son that you were with me."

Then the 52-year-old walked outside, shot her three cats and then herself with her husband's rifle.  The mortgage company notified police, who found her body at 3:30 pm.  The foreclosure auction was scheduled to start at 5 pm.  Notes left on the table revealed months of planning.  She'd picked out her funeral home, laid out the insurance policy, and left a note saying, "pay off the house with the insurance money." 

The husband, John Balderrama, didn't even know of the foreclosure, as Carlene handled all the home finances.  "She put in her suicide note that it got overwhelming for her," said her husband, John Balderrama.  "Apparently she didn't have anyone to talk to.  She didn't come to me.  I don't know why.  There's gotta be some help out there for people that are hurting, than to see somebody lose a life over a stupid house." 

PHH canceled the foreclosure auction that was scheduled to be held that day but it is not clear whether it was done before or after receiving the fax.  Buyers did however, begin to show up for the auction, but learned it had been canceled.

 

 

KARTHIK RAJARAM

Rajaram, despondent over his own financial problems, shot and killed his wife, three children, mother-in-law and then himself in California.  I recently blogged about this incident.

 

PADILLA'S

Jessica Padilla, 22, Seward Padilla, 42, and Lori Padilla, 45 were found dead in their home with all three being shot.  Jessica's 2-year-old daughter was found unharmed outside the home.  A man called 911 from the Padilla residence to report a fire in the basement before hanging up, authorities said.  When police officer and firefighters arrived, there were shots originating from the second floor, toward the fire equipment.  Police said that gasoline was used to ignite the fire and that rounds fired from the house hit a fire truck and a house across the street.  The case is still under investigation.

The family was under severe financial strain, according to court documents.  Their home was in foreclosure, and owed nearly $30,000 to credit card companies and had declared bankruptcy, but investigators said they were not sure what role their finances played in the shootings or fire at this point.

There was a history of domestic violence in the family and Seward and Lori had taken out protective orders out against  each other.  Court documents also showed Seaward and Lori had filed twice for divorce.   Police do not know how Jessica, who was five months pregnant, became involved in the dispute.

VIDEO

"Housing Crisis", the plight of a community of foreclosures told through the stories of three families . 
8 Minutes, 49 Seconds.

 

CLARIFICATION

In an AP article that was released today it states that in Ocala, Florida, Roland Gore shot his wife and dog, set fire to the couple's home, which had been in foreclosure, called 911 and then killed himself.  That incident is from 2003 and not 2008 according to the date of a post on the Firehouse Forums.

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