Are we headed for a depression?

[Bobinator]

I heard Gerald Celente on talk radio last night. He's the founder of the Trends Research Institute. He's internationally known, and has been on Larry King Live, Oprah, CNN, and a whole host of other venues. He predicted many things in the past, including the 1987 stock market crash. He has some rather dire predictions for the United States and eventually the world economy and recommends doing everything you can to pay off debt and minimize expeditures. Everything he's predicted regarding the economy has come to past or is in progress. I think he's really on to something. If you think gas will cap at $4/gallon, you might want to think again...

[SusieMisajon]

I'm sure that none of you will be surprised that I bring this thread up, yet again http://www.hawaiithreads.com/showthread.php?t=8798&highlight=pandemic as it's always good to be prepared for anything, poverty included.

[WindwardOahuRN]

We just filled out mandatory info sheets at work where we provided info regarding the number of people in our household and whether or not those people were allergic to any medications, specifically antibiotics.
The reason? Oh, just in case there is a pandemic or some such disaster. It seems we'll get first dibs on meds. I guess they want the health care professionals up and running in such an event.
This is the very first time I've been asked to provide such info. Makes you wonder if someone knows something and isn't sharing. :eek:

[Karen]

YES....I believe we "are headed" to absolute depression but....I am not yet convinced, thank God that we are going to enter and spend some years in depression.

I see that the Fed is panicked and they freaked out and lowered an interest rate on a sunday! they then lowered another one today. They have done such rare and creative things that I at least need the Dummies series book on Economics to understand WHAT they really did, but suffice it to say that plenty of people have confirmed that what they have done, more than one thing.....hasn't been done since the Great Depression. THAT....speaks volumes.

Mama always said that actions speak louder than words and the Fed is working to prevent Depression. they aren't just working to try to give us a softer vs. harder recession.

Dang! it was ominous when we started our year with Countrywide, Citibank and Merrell Lynch all in deep trouble. Since january? nothing but more and worse news, dramatic news.

Chrysler told all employees worldwide that they will take a mandatory two week vacation in July. Delta is just now offering approximately half of their entire work force.....30,000 a severance package for early retirement....read that....just to quit!

Sheesh.... it's BAD and unlike us....the Fed probably has data we can't see and won't get wind of. What huge company is next? How is The Principal Group that so many 401Ks are invested in, and how's Metlife, for example? I have to wonder. Old companies have fallen into deep trouble, like Citi...so, how's the really old Liberty Mutual?

Can this be prevented? Can we not go into depression? Praying to God so.....these islands are funded by tourism...dear God, a depression?!!

There are so many ways to "cook the books" and do what some call legal, but really "creative" ways to move money around in these modern times.....and this is why I suspect we don't yet know what the big wallstreet and the Fed knows...names of some other HUGE companies that are in deep trouble and the Fed is trying to prevent a gigantic loss of jobs by hoping to help the companies not yet completely bankrupt or whatever we should call them.

[Kaukura]

to clarify the above post about Delta Air Lines, the newspaper titles are a bit over dramatic, the truth is they are offering 30,000 employees who are eligible, but will only accept 2,000 of those for severance. That is not as dramatic as the headlines make it sound and not uncommon in business in general:

ATLANTA - Delta Air Lines, faced with a weak economy, dimmer hopes of a merger with Northwest Airlines Corp. and record fuel prices, said yesterday that it would offer voluntary severance payouts to about 30,000 employees - more than half its work force - and cut U.S. capacity an extra 5 percent.

Delta hopes to reduce 2,000 non-pilot jobs in the United States, or 3.6 percent of its work force, through buyouts and voluntary retirements for which more than half its employees are eligible, wrote Chief Executive Officer Richard H. Anderson and President Ed Bastian in a memo yesterday.

[Karen]

Thank you, Kaukura! whew...none of the few news sources I read yesterday, nor the one I heard broadcast said a thing about them having a set amount that they will accept and there is a huge difference between 30,000 and 2,000. (Delta was indeed in financial trouble how long ago? Hope they aren't, now)

[craigwatanabe]

Man when the stocks fall a few hundred suddenly we're a bunch of chicken littles. It wasn't that long ago when the Dow Jones Industrial average broke headlines when it rose above 1000.

But to prepare one must start hedging all investments. Stuff like precious metals seem to work during these times. And remember the Great Depression had it's downfalls, but it did create quite a few millionaires as well. Money doesn't hide it just get's unproportionally divided making the rich get richer and...well you know the rest.

[Pua'i Mana'o]

::::looks left
looks right::::

um, hello? Havenʻt you all lived in the same Hawaiʻi as me since the 1980s? It was only within the last decade that I stopped saying that I have spent my entire adult life in a bear market.

Let's review:

-Japanese real estate bubble bursts in the mid-1980s (when I graduated from high school)
-negative equity is a real issue for Hawaiʻi from 1988-1994, and financing options that fleece us we can enjoy today were not available then.
-Japanese tourists, who drive the industry, were at an all-time low, consistently, for two decades, because our economy seems to be as tied to Asia as it is our US counterparts.

So get a trade, get a grip on your finances, and get ready for the lean times. They'll wizen the arrogance out of us, as they had back then. Ten years isn't long enough to make us forget all of that, is it? Besides, this is how its supposed to happen--economies are cyclical, as is everything else.

Chill. :)

[craigwatanabe]

::::looks left
looks right::::

Besides, this is how its supposed to happen--economies are cyclical, as is everything else.

Chill. :)

I'm not chillin, I'm gellin :) As you said these things are cyclical and it's wise to follow these and take advantage of both the down and upswings. When 9-11 hit I called my broker and told him to buy up as much as I could afford on stocks that had plummeted in the hours after the twin towers fell.

Same thing goes for home ownership. People are buying homes that are overpriced but low interest rates. That's rediculous! I tell my friends to buy when housing prices are at their lowest and interest rates are higher. Eventually the rates will drop as housing inventory goes up (mostly from foreclosures). That triggers another interest rate drop to encourage home buying. That's when it's time to refinance your higher interest rate mortgage loan into something more manageable.

You can renegotiate your interest rate on your mortgage, but you cannot renegotiate the purchase price of your home.

Depression? The US dollar would have to practically bust wide open for that to happen, and no world market would allow that to happen as the US dollar is the hedge against all other foreign markets.

[Karen]

"Man when the stocks fall a few hundred suddenly we're a bunch of chicken littles."

Not all of us! The stock market has not been hardly even peripheral to what I've been posting about on this thread and the "polls" one. big deal, an inflated market went down a bit, heck, for pure correction....the market hasn't gone down nearly enough....if only this were a mere correction. It isn't...because it is not focused on the stock market.

This is about the country's largest mortgage company being in deep doo, it's oldest or biggest bank, dang I read so many reports but lack a photographic memory, and it's largest stock brokerage firm....all being in horrible trouble at the very same time, and....many other companies, but that isn't all. Freddie Mac and Fannie Mae in financial trouble, too, along with a ton of smaller mortgage companies belly-up.

In fact, it's about more large things, some huge.....than my busy self can remember to type at the moment. I wish this was a stock market upset, but it isn't, and oh yeah, that dollar that it was said is the hedge for the world....cough cough....not now, it isn't. It's been in free fall, and oh yeah....

all of my life we Texas rednecks joked about putting money away into a Swiss bank account cuz they have been the untouchables for so long, and seemingly immune to major financial problems....not anymore! I don't have it's proper name but the biggest bank in Switzerland lost 8 BILLION....something like that, last year. It even reportedly operated in the red last year....why? because of being heavily involved in our economy. This has been unheard of in my lifetime or someone failed to report on it...Swiss banks in severe pain.

We may not arrive into depression but we are headed there. Watch and listen and as the news continues, or will these huge and really bad reports magically cease in april?

The Federal Reserve just used more than one "creative fix" that had not been used since the Great Depression but we've had how many recessions since then? That...tells me a lot and I am sorry...it ain't good. No chicken little here, but maybe that's the best way to deal with it all and not let it bother us....just say it's "the sky is falling" doomsayers and forget about it.

[craigwatanabe]

[QUOTE=Karen;188210it was said is the hedge for the world....cough cough....not now, it isn't. It's been in free fall, and oh yeah....

No chicken little here, but maybe that's the best way to deal with it all and not let it bother us....just say it's "the sky is falling" doomsayers and forget about it.[/QUOTE]

When the US dollar coughs the world does get sick but I wouldn't say the dollar is in a free fall. It may be down but by far it is still a powerful currency that foreign countries rate their currency against.

[Karen]

It may not be in freefall today, Haven't checked, but it literally has been many days in the last couple of weeks. I wish I had a chocolate bar :D for every time Perry and Price have reported in the last oh....3 weeks...."the dollar hit an alltime low today" or words to that effect.

Editing this in....just found more about Chrysler....they have a workforce of 44,000 and are aiming to reduce that by 8,000 to 10,000 workers.

Delta Airlines does say that if more than 2,000 of its employees agree to accept the severance package that more will be allowed to leave.

United Air is grounding 20 planes to save money. Sounds like they aren't hurting as badly as.

[craigwatanabe]

It may not be in freefall today, Haven't checked, but it literally has been many days in the last couple of weeks. I wish I had a chocolate bar :D for every time Perry and Price have reported in the last oh....3 weeks...."the dollar hit an alltime low today" or words to that effect.

If you notice everytime Michael W. Perry announces the price of Gold, Larry Price will "Boo" Apparently some of us bought gold when it almost hit $1000/oz.

Anyway economists always tell consumers that the market needs to adjust. Well the last time they said that, 9-11 hit and the stock market adjusted just like they promised.

I think from previous bull markets where the dollar was just shooting up like a rocket with nothing to support it's gains, an adjustment was needed and we're feeling it right now.

To me we're not heading into a depression, the stock market is merely correcting itself:rolleyes: if you can believe that.

[Karen]

You may be right about the market, as I agree it can correct more from its ridiculous level. The market just isn't my focus at this time.

If the market were the only news right now, or the market and JUST...countrywide, for instance...no biggee but then if that were the case....the Fed would not be using "creative tools" that is didn't use through all of the other recessions since 1929, for example. See? What is the Fed so concerned about that is making it use tools for the very first time since the Great depression?

PS, Price didn't buy at near 1000.....he just sold his gold not long ago. They've talked about that. I think he kept boo'ing for fun, or cuz he wished he could make even more and he may have sold like back during or even before the holidays. I dunno...I heard them say he did sell but since uh....last oct...life's been one busy blur, lol.

Rut row....here's the dollar to euro chart....about middle of the page and the last column is March....no leveling at all this month... but did bounce up for a day or two...no wonder so many newssources are calling this a free fall. I think it is.

http://finance.yahoo.com/currency/convert?amt=1&from=USD&to=EUR&submit=Convert

[craigwatanabe]

Well come on now look at that chart and look at the incremental changes over an entire year that's projected. Yes it's dropping but at one-cent per month for a 10-month period only equates to a 10% drop over a year's period. Remember we're in an election year and the dollar fluctuates wildly during the period fronting the General election.

I've seen stock drop faster than that. Currency may be one way to track an economy however it's also a volatile way as well.

As for Countrywide. The feds had to help them out because so many people were affected by their sub-prime lending habits. This isn't the first time there was a Government bail out of a private corporation. Remember Boeing?

That time the US Government had to step in simply because of the defense contracts that needed to be fulfilled for military purposes. Countrywide needs a bail out because if it defaults, so do many home owners and right now there's too much equity to be foreclosed on for our economy to absorb. A depression? No way. Not all homebuyers borrowed thru unscrupulous lenders.

Many will find another way to dig themselves out of their financial mess thru refinancing. Lenders are already slackening their policies on late fees. Some have even renegotiated their APR's with lenders as most lenders need cash flow to keep their business going. Forclosure doesn't creat cash flow it creates unneeded capital or as we like to call it a white elephant.


If lenders loosen their policies on collection the government will bail them out with needed cash. But this also means a weaker dollar as federal reserve capital is used.

[Karen]

Thanks for continuing, Craig. We clearly see this differently and nuttin wrong with this.

Will you please give me your thoughts on this question of mine?

"What is the Fed so concerned about that is making it use tools for the first time since the Great depression?"

Thanks~

[craigwatanabe]

Thanks for continuing, Craig. We clearly see this differently and nuttin wrong with this.

Will you please give me your thoughts on this question of mine?

"What is the Fed so concerned about that is making it use tools for the first time since the Great depression?"

Thanks~


I believe it's whomever decides to be in charge of the Federal Reserve will determine if any tools were to be used. In the Great Depression we probably never had these creative tools to work with in the first place. Thru time and experiences we've learned to make course adjustments by becoming "creative" and thinking outside the box.

Anyway I really am trying to keep this light but I keep forgetting to put those :) icons to keep it that way, sorry. So I'm sorry too if I'm sounding too harsh, I really am being light hearted about this. I do feel however we aren't heading into another depression simply because of the way the dollar is reacting to foreign currencies. But if you do want to hedge your investments against the possibility of one, precious metals are the best way to do so.

Oh yeah and before I forget...:):D

[Karen]

Craig, yes, we did have the tools available I am speaking about. Report after report that I found yesterday stated that the fed last used certain tools in the Great Depression, in other words.....this is the first time SINCE...then.

Uh oh....this is huge...how many more reports like this shall we be learning about??

"NYTimes.com
CIT Group Draws on Its Credit Line
Thursday March 20, 11:38 pm ET
By REUTERS


CIT Group, the commercial finance company, said Thursday that it was drawing on $7.3 billion of bank lines to help conduct daily operations, a move that highlights the commercial finance company’s difficulty in raising cash to pay off debt."


(PS, no you are not sounding "too harsh." I know that the written word can be the blogger's own worst enemy and this goes for forum posters, also. It is sooo dang easily misinterpreted that it's a wonder we don't have wars of words here regularly. You sound fine to me. This subject is what is so harsh.)

PS...one more....dang and this does speak of something, I think, that was not done in the Great Depression.

Investment Firms Tap Fed for Billions
Thursday March 20, 5:03 pm ET
By Jeannine Aversa, AP Economics Writer
Investment Houses Borrow Billions From Fed's Emergency Lending Program


WASHINGTON (AP) -- Big Wall Street investment companies are taking advantage of the Federal Reserve's unprecedented offer to secure emergency loans, the central bank reported Thursday.
The lending is part of a major effort by the Fed to help a financial system in danger of freezing.


Those large firms averaged $13.4 billion in daily borrowing over the past week from the new lending facility. The report does not identify the borrowers.

The Fed, in a bold move Sunday, agreed for the first time to let big investment houses get emergency loans directly from the central bank."

"

[Karen]

Now, a newspaper giant reports in...last year made a lot of money, right now...in the red in a huge way!

AP
Tribune Co. Posts $78M 4Q Loss

Thursday March 20, 10:34 pm ET
By Dave Carpenter, AP Business Writer
Tribune Co. Reports 4Q Loss; Zell Still Sees 'Significant Opportunity'

CHICAGO (AP) -- Media conglomerate Tribune Co. reported a $78 million fourth-quarter loss from continuing operations Thursday as it copes with the historic downturn in the newspaper industry.
Chairman and CEO Sam Zell also confirmed that the company has begun a strategic review of assets, as a report surfaced that News Corp. chairman Rupert Murdoch has made a bid for Tribune's Long Island-based Newsday

The fourth-quarter loss was a reversal from the $233 million gain from continuing operations a year earlier.

[Bobinator]

I believe it's whomever decides to be in charge of the Federal Reserve will determine if any tools were to be used. In the Great Depression we probably never had these creative tools to work with in the first place. Thru time and experiences we've learned to make course adjustments by becoming "creative" and thinking outside the box.

Anyway I really am trying to keep this light but I keep forgetting to put those :) icons to keep it that way, sorry. So I'm sorry too if I'm sounding too harsh, I really am being light hearted about this. I do feel however we aren't heading into another depression simply because of the way the dollar is reacting to foreign currencies. But if you do want to hedge your investments against the possibility of one, precious metals are the best way to do so.

Oh yeah and before I forget...:):D

I think when the President and Congress clearly agree on a tax relief package to be implemented immediately, something's up. There are obvious concerns that go beyond partisan politics. There are red flags everywhere. You must also note that the media is very cautious about publishing the truth, especially about the economy. When they do, it's too late, and our fat's already in the fire.

You're right about the precious metals thing. Gold is out of my league right now, but what do you think about silver? And how does that compare with gold?

[craigwatanabe]

Silver? Hmmm let's look at it this way, the Federal Government went off silver as a way of backing the good name of the US Dollar a long time ago.:D

There is a place called Fort Knox and they hold gold reserves. They don't have silver there so that should tell you something about the reserve value of that metal.

Platinum is another good precious metal that has hedging power but is very expensive.

You can try silver as it's value has slowly crept up over the years but to me it's too unstable and at it's current value it seems like it peaked out already and we missed that boat. It spiked last year or the year before that but with the onslaught of a recession in the near future, I think that spike has gone and passed.

The trend in silver seems to be upward however so I'd wait a short while and see how silver is reacting to our current economic situation. If it hovers around where it is now with some upward trend then maybe I'd buy.

The good thing about silver is that although more volatile than gold (historically) it seems to shadow gold's trend and right now gold is getting close to a thousand bucks an ounce making that precious metal really nice compared to the 90's when it was almost half to two-thirds that value.

[Bobinator]

But still, wouldn't it be a decent commodity for bartering? I would imagine that even things like quarters or silver dollars have intrinsic value based on its precious metal content, as little as it is. Still, it's better than paper money.

A roll of quarters for that roll of toilet paper, please. Or, maybe I'll just use this hundred dollar bill...:D

[cynsaligia]

We just filled out mandatory info sheets at work where we provided info regarding the number of people in our household and whether or not those people were allergic to any medications, specifically antibiotics.
The reason? Oh, just in case there is a pandemic or some such disaster. It seems we'll get first dibs on meds. I guess they want the health care professionals up and running in such an event.
This is the very first time I've been asked to provide such info. Makes you wonder if someone knows something and isn't sharing. :eek:


so did you enjoy your chocolate covered, nutty anthrax "pill"?

[WindwardOahuRN]

so did you enjoy your chocolate covered, nutty anthrax "pill"?

I opted for the caramel coated version. :)

[Creative-1]

Depression? Absolutely not. The Great Depression of the 1930s cannot happen again.

Insurance on bank deposits will prevent a run on banks that turned a recession into a depression.

Brakes on the stock market will prevent it from free-falling, like it did in 1929. We've created many other structures (like unemployment insurance and Social Security) to keep our economy from imploding again.

The question really is: will this downturn become a recession?

The answer is: maybe. We won't know for awhile, but we've faced recessions before and will face them again.

It's like the tide, going in and out. It's a natural ebb and flow.

I was a boy scout. I'm mentally prepared for a recession at least every ten years. It's going to happen. It's the economic facts of life.

[Bobinator]

I can't agree that a depression can't or won't happen again. Insurance on bank deposits may alay some fears, but it won't prevent it. Having $ in the bank means squat if you can't take it out and use it. Banks are only required to have like 10% cash reserves. Most of the money is only of record. Can't buy a loaf of bread with an I.O.U. Besides, the government's help is limited. Cash is essential, cuz if and when people panic, the banks have to shut down or severely limit their operations. This may also mean no debit or credit card transactions either.

We're not just talking about a run on the banks here, but a mass of job losses, foreclosures, our national debt, the falling dollar. since the American dollar isn't backed by gold, its based purely on reputation, which isn't doing to well and is pretty vunerable. It's like a stock value based on empty promises. If there's a frenzy at the banks, are you going to sit tight while everyone else gets their cash? Maybe, but you won't have any when you need it. A run on the banks is not a thing of the past. It happens in modern times. I recall it happening in Russia a few years ago, or some foreign country I can't recall which.

We may have installed prepared some safety features, but putting a hold on the stock market is only a speed bump. It doesn't stop anything. And when you stop trading, guess what happens to the the economy? Nothing.

I don't want to sound like an alarmist, but we can't turn a blind eye and think the government is going to take care of everything.

[Karen]

You don't sound like an alarmist and I hope you won't feel you almost have to "apologize" for telling it as you see it, here. Just in today's news....good grief for plenty of negative, economic reports.


"Reuters
WaMu gets $7 billion infusion, cuts jobs, sees loss
Tuesday April 8, 1:24 pm ET
By Jonathan Stempel


NEW YORK (Reuters) - Washington Mutual Inc (NYSE:WM - News), battered by mortgage delinquencies and defaults, said Tuesday it obtained a $7 billion capital injection from private equity firm TPG Inc and other investors, but projected a $1.1 billion quarterly loss and set plans to eliminate 3,000 jobs.
ADVERTISEMENT


The largest U.S. savings-and-loan also said it will close its 186 stand-alone home lending offices and stop offering loans through mortgage brokers by the end of June. It will instead offer mortgages in its roughly 2,300 retail branches, where some of the affected workers will be offered jobs."

*******************

"Citigroup, Wells Fargo May Loan Less After Downgrades (Update3)

By Mark Pittman, Alan Katz and David Mildenberg

April 8 (Bloomberg) -- Bank holding companies including Citigroup Inc., Bank of America Corp. and Wells Fargo & Co. have the thinnest safety cushion against losses in seven years."

*******************

" Fed Auctions Another $50 Billion
Tuesday April 8, 11:04 am ET
By Martin Crutsinger, AP Economics Writer
Fed Auctions Another $50 Billion to Cash-Strapped Banks in Battle Against Credit Squeeze


WASHINGTON (AP) -- The Federal Reserve, still working to combat the effects of a severe credit squeeze, said Tuesday it had auctioned another $50 billion to cash-strapped banks. Meanwhile, the International Monetary Fund warned that further actions are needed globally to prevent more wrenching problems.

The Fed auction marked the ninth in a series that began in December that so far have pumped $310 billion in short-term loans into the nation's banking system. Meanwhile, the 185-nation IMF delivered its most detailed review yet of the global credit crisis that hit last August. It said Tuesday that governments must be prepared to do more to support the global financial system if conditions worsen."

*****************

"Pending Home Sales Hit Low in February

Apr 8 01:22 PM US/Eastern
By ALAN ZIBEL
AP Business Writer


WASHINGTON (AP) - An industry group said Tuesday that pending U.S. home sales fell in February to the lowest reading since the index began, signaling the housing market distress is not yet over.
The National Association of Realtors' seasonally adjusted index of pending sales for existing homes fell to 84.6 from January's upwardly revised reading of 86.2. The index stood at 107.6 in February 2007."

***************

Oil and rice are at record prices, the dollar still very low, a record today? I haven't looked, meanwhile corn prices have tripled because of the STUPID ethanol that isn't saving the earth while it's harming the economy horribly, and putting many ranchers and farmers out of business, reportedly because they can't afford to feed their critters and make a living. So...let's starve our food supply as if WE won't ever have famine, cuz of the tree huggers screaming that we're harming the planet, all the while....the economy is in serious danger.

I am not worried about sounding alarmist since I'm not making any of this up, and me saying this is not a "dig" at the previous poster.

[craigwatanabe]

More like the laws of physics...what goes up...:(

But like you said it's how you prepare for it.

Karen remember one thing about the media they love to print the bad stuff and in order to sell it they have to sensationalize it.

Yes it's bad but no one's throwing themselves off the Empire state building (yet). Is it gonna get worse? Probably. But no bank wants to be a homeowner of forclosed homes so there will definately be an effort to help beleagered home owners strapped with sub prime loans to recover.

If we haven't learned from Japan's stock market crash of the 90's when bad lending led to a major disruption of Japan's banking institutions and left large tracts of lands here in Hawaii undeveloped (like the site of WalMart in Kakaako), then we really haven't learned anything. But I do believe we will come out of this before any kind of depression will occur. A recession? Well of course well head into one, but that's pretty much cyclical and to be expected after a Bull market situation. Analysts like to call it a correction.

What makes this year's financial situation worse is that the wave of foreclosures happened too early in the cycle. I've been tracking this real estate cycle since the mid 70's and the downward cycle should have started early next year, not early this year as happened.

I believe our bean counters relied on the Consumer Spending Index as an indicator of economic times. I tend to look at the Consumer Credit Index as a more accurate way of gauging the resiliancy of the economy. If you have bad credit, the index is lower because of the ineligibility of gaining good credit. If you look at consumer spending, that doesn't look at qualifications based on credit scores. So if you get a credit card from a bad lender and spend your credit line on consumer goods or services, the Consumer Spending index looks good but doesn't take into consideration of the bad debt incurred as a result.

A good way of checking to see if your financial situation is good or marginal is to apply for a credit card from either Bank of Hawaii or FHB. Their acceptance of your application means you have decent credit and is an acceptable risk. But if denied, forget it, your credit rating stinks. and they know it.

[Karen]

Craig, indeed they often do sensationalize things. I almost wish these reports sound sensationalized so I could trivialize them a tad in my mind or something, but.....they're pretty bland reporting of facts. Yeah, it's "that bad" and probably going to worsen.

My/our credit rating is stellar and I know it has been a long time. My credit concerns are how the companies I do business with are rated.

I also wonder how companies are that people have their retirements heavily vested with. That's the type of company that will avoid public exposure till they are being bailed out hugely.

[craigwatanabe]

Craig, indeed they often do sensationalize things. I almost wish these reports sound sensationalized so I could trivialize them a tad in my mind or something, but.....they're pretty bland reporting of facts. Yeah, it's "that bad" and probably going to worsen.

My/our credit rating is stellar and I know it has been a long time. My credit concerns are how the companies I do business with are rated.

I also wonder how companies are that people have their retirements heavily vested with. That's the type of company that will avoid public exposure till they are being bailed out hugely.

Oh yeah pension plans. That is the one biggie the US Govenment MUST keep a stern eye on.

When dealing with credit companies, just like investing you must look at their fiancial stature before signing up. WaMu is advertising a lot lately but as we all know they're getting out of certain lending practices to save themselves.

And the venerable GMAC is also advertising but not doing so well.

If you have an IRA or a 401k with a company that isn't doing well, you may want to roll that over to something more reliable or choose an investment vehicle within that investment company that can weather out recessions.

In investing dollar cost averaging is a wise method of gaining assests however during times of an impending recession, you may want to move it around and be a bit more aggressive than to look at market trends as dollar cost averaging does.

[Karen]

At least 10,000 people being laid off by two major corporations. Not posting exact numbers, in a rush here but A.T. & T. laying off approx. 4,000 and the rest by Citicorp? Citigroup lost over 5 BILLION in the first 3mos. of this year.

Oil, corn and rice at record levels. Did the dollar hit yet another historical low this last week? I think I saw a blip about it next to oil's new high, just days ago.

Arrivals to the islands down approx. 14%. Hmmm....

[Ron Whitfield]

It's a race to the bottom between the flips - toxic CO2 levels in the oceans, or this way too top heavy country/government's certain collapse, to see which catastrophy brings us to our knees first. But, maybe the 'new 9-11' will beat them to the punch and set up the perfect storm that finishes us off.

After all, 2012 is right around the corner..., so, let's party like it's 2999!

[Karen]

The most likely thing to bring more of us to our knees, proverbially and literally? Oil hitting 170 or so dollars a barrel, heck 150 and not going below it again may do it.

2012? LOL Dec. 12, 2012....ya think the Mayans were onto something?

[Karen]

Good grief! Citibank, tha nation's oldest and/or largest bank....in huge trouble and now the nation's Second largest bank.. These types of reports are so regular this year that I wonder if some of us are, or will becoming/become immune to them. Sheesh....


"Bank of America Net Income Falls 77% on Writedowns (Update7)

By David Mildenberg

April 21 (Bloomberg) -- Bank of America Corp., the second- largest U.S. bank, said profit dropped for a third straight quarter as the company set aside $6.01 billion for bad loans.

First-quarter net income declined 77 percent to $1.21 billion from $5.26 billion a year earlier, the Charlotte, North Carolina-based bank said today in a statement. The results fell short of analysts' estimates and sent the bank's stock down 2.5 percent in New York trading."

[GeckoGeek]

I'm getting the feeling that much of the nation's wealth was being made by playing with money rather then from goods and services.

But in leveraging money to make money, as it starts to fail it amplifies the loss just as it had amplified the gains.

[Karen]

California was one of the hardest hit states for home foreclosures in '07. This has been very well documented in last year's and this year's news. Now?

Reports in that this poor state's foreclosure rate is up 327% From LAST YEAR! Good (edited sort of expletive.)... grief! that's huge....and going to get even worse??

Are other states that much worse than they already were last year? Dunno....yet.

[Karen]

Would edit my previous post if the program would allow, and add this....

"AP
Gas prices rise further above $3.50, while oil nears $120

Tuesday April 22, 6:47 pm ET
By John Wilen, AP Business Writer
Gas prices push further above $3.50 a gallon, while oil nears $120 on weaker dollar


NEW YORK (AP) -- Gas and oil prices pushed further into record high territory Tuesday, with retail gas reaching a national average of $3.51 for the first time and crude nearing $120 as the dollar fell to a new low against the euro."

[Karen]

That 'ole cliche "and the beat goes on" comes to mind....dayum....


"AP
Delta, Northwest report combined $10.5B loss on fuel costs

Wednesday April 23, 10:18 am ET
By Harry R. Weber, AP Business Writer
Delta posts $6.4 billion loss, Northwest loses $4.1 billion on soaring fuel prices


ATLANTA (AP) -- Delta Air Lines Inc., the nation's third-largest carrier, said Wednesday its loss widened in the first quarter to a whopping $6.39 billion because of soaring fuel prices and the steep decline in the company's market value.

Northwest Airlines, which will be acquired by Delta to create the world's largest airline, reported a $4.1 billion loss in the first quarter.

Delta's results badly missed Wall Street expectations, despite a 12 percent increase in sales."

[Karen]

IF...we are headed for Depression then maybe it's going to be a very slow journey, and definitely not escalate until after the elections. However, bummer is that there's more news of major retailers laying off employees, etc.

This time it's Home Depot..."It is the first time the world's largest home improvement store chain has ever closed a flagship store for performance reasons. The move, to be completed within the next two months, will affect 1,300 employees."

Entire story here....

http://biz.yahoo.com/ap/080501/home_depot_store_closings.html?.v=2

*********************************
Starbucks Earnings Sink 21%

By LAURIE J. FLYNN
SAN FRANCISCO — Starbucks, faced with a sharp drop-off in customers, reported on Wednesday that earnings declined 21 percent during the second quarter.

http://www.nytimes.com/2008/05/01/business/01starbucks-web.html?_r=2&oref=slogin&partner=MYWAY&pagewanted=print&oref=slogin
********************************


Gulf States May End Dollar Pegs, Kuwait Minister Says (Update4)

By Fiona MacDonald and Matthew Brown

May 1 (Bloomberg) -- Gulf states are considering dropping their pegs to the dollar after the U.S. currency's decline stoked inflation across the region, Kuwaiti Finance Minister Mustafa al- Shimali said.

``Yes, there are some'' Gulf Cooperation Council states considering dropping their pegs to the dollar, which has fallen 13 percent against the euro in the last 12 months, al-Shimali said in an interview in Kuwait late yesterday without naming the countries. ``Some countries will do what we are doing.''


http://www.bloomberg.com/apps/news?pid=20601087&sid=aKafZEdY2xF8&refer=worldwide

[craigwatanabe]

Wow that's too bad for Home Depot, good thing Hawaii isn't affected as the Iwilei store has been ranked as between the #1 and #3 most profitable store in the nation.

$11-million markdowns. That means when a product cannot be sold for it's retail price. Typically it's because the product is either inactive (stock no longer being reordered), repaired (product sold, returned and repaired), or returned (customer bought the wrong item but due to packaging or missing accessories it can't be sold as new).

BUT markdowns also include shrink (asset loss) due to inaccurate inventory accounting and receiving, theft (both internal and external), and general merchandise damage.

There's others but to me the one of the biggest markdown's occur when a customer buys a product, uses it and returns it. This drives the cost of the goods up and reduces order inventory. Bottom line is this kind of unscrupulous customer practices make it harder on the store and customer. The only ones that get away with it are those doing it. They have no concious or shame.

People like that go to hell, and that's the only consolation I can muster up to upset associates that see this kind of blatant disregard for integrity.

[Bobinator]

People like that go to hell, and that's the only consolation I can muster up to upset associates that see this kind of blatant disregard for integrity.
Now, now. Take it easy. They certainly deserve a head-slap... Well, maybe a couple of head slaps, but Hell is eternal.

In this case, you've got to include medical insurance and workman's comp fraud, unisured motorist, and people with loud mufflers to hide the fact they have a small... *Da-Kine*!:rolleyes:

[salmoned]

Okay, just for starters - Yes, financial institutions are writing down CDOs and SIVs and it appears they have huge losses. However, they are doing this because of a fairly recent requirement to 'mark to market' those assets each quarter. Since the market has dried up for those assets, the price they can garner in the market is lower than any realistic valuation. When the market regains liquidity, those 'paper markdowns' will be marked back up to a valuation which better reflects their worth and those markups will look like profits, just as the markdowns currently look like losses. Yes, the drying up of 'easy money' (liar loans and adjustable 'teaser' rates) for mortgages has caused housing prices to slump and losses to be incurred, but the 'end-result' losses will be much smaller than the markdowns taken on a quarterly basis. By lowering interest rates, the Fed has attempted to lower the adjustable rate increases and moderate the foreclosure rate. The sky is not falling, far from it. The economy has slowed, but it has yet to stall or shrink (although it may - but that wouldn't be an unusual event). Don't worry, be happy.

On the other hand, long term shareholders of the 'troubled' institutions are getting cheated because stipulated reserve requirements have forced the institutions to seek equity capital at bargain basement prices, letting the new equity rake in the future gains of those 'marked to market' assets as they swing back to a realistic valuation. That's why they're so eager to put up stakes (at ridiculously low prices). No one cried foul when foreign entities 'bailed' them out, but when Warren Buffet made his offer to Ambac it was rebuffed as unadulturated greed on his part (which, of course, it is for all foreign and domestic 'saviors' in this 'crisis').

[Karen]

I looked up this thread earlier today, and reread it. It's amazing to read what we were pondering this many months ago. To read the names of companies that were in deep trouble even back then, some of which aren't on the current radar screen by name. WaMu had gotten an infusion of Billions earlier this year and still were in the news recently, again.

Most of the people I am hearing from believe it's straight past Recession and into a Depression, or they just get quiet and prefer to not talk about "the unthinkable."

I'm glad the folks on this island mainly pull together and we'll all be fine. I just can't help but wonder how this is all going to play out, in detail. To say this is humbling is an understatement, it's absolutely mindboggling listening to the news reports.

God bless every person here, sincerely. Hoping your gardens grow tall and green and that the bees return next year.

[matapule]

Most of the people I am hearing from believe it's straight past Recession and into a Depression,

We are not a depression. There is a definition for depressions and I don't have time to give you a link right now. But we are NOT in a depression. We are in the midst of a recession. Most economists say that we will not experience a depression like the 1930's because of checks and balances we have today that were not available in 1930. For example the following three safeguards will prevent a depression.

1. Unemployment insurance
2. Social Security
3. FDIC insurance on bank deposits up to $100K (or I guess it is $250K now)

So not to worry. Just be financially conservative for the time being - and always - and you will be fine.

monomanomonuia (good luck)

[Bobinator]

We are not a depression. There is a definition for depressions and I don't have time to give you a link right now. But we are NOT in a depression. We are in the midst of a recession. Most economists say that we will not experience a depression like the 1930's because of checks and balances we have today that were not available in 1930. For example the following three safeguards will prevent a depression.

1. Unemployment insurance
2. Social Security
3. FDIC insurance on bank deposits up to $100K (or I guess it is $250K now)

So not to worry. Just be financially conservative for the time being - and always - and you will be fine.

monomanomonuia (good luck)

I'm not understanding your reasoning here. What assurance do you have that any insurance company can make good on their promises? Who's gonna insure the insurance companies? AIG provides insurance and look what happened to them? And what good is social security? Where do you think social security monies come from? At any rate, most of us aren't even qualified to receive it.

The notion that a depression can't happen is completely false. In fact we are even more vulnerable today for the following reasons:

This was taken from a transcript of an interview done with the world reknown trends expert Gerald Celente that was printed on September 15, 2008:

"We’re going into the worst depression that any living person has ever seen. It’s going to be worse than the Great Depression of 1929 and I’ll give you a some reasons why.
1) In the 1929 Depression, not many people owned homes, so they weren’t carrying that heavy mortgage load. The people who did have homes did not have something called ‘home equity loans,’ which is more money owed on top of the other money. They used to have something else back then called a ‘second mortgage.’ If you had one, you were a loser.
2) Back in the 1929 Depression days, people didn’t have things called ‘credit cards.’
3) The United States didn’t have $14 trillion worth of debt.
4) We still had a manufacturing base in the United States so that when WWII broke out and the economy improved afterwards, we were still able to produce more so than any other country in the world. But now, the U. S. off-shores so much manufacturing now.
5) Back in the Great Depression of 1929, the U. S. government was not $14 trillion in debt and they had a trade surplus, not a trade deficit.
6) We weren’t fighting two wars that have sapped already $2 trillion from our American treasury and it’s getting worse."
You can read the entire transcript here, which provides compelling reasons to be aware of the coming depression: http://www.earthfiles.com/news.php?ID=1473&category=Environment

I'll also add that Celente warns that interest rates will spike soon after the November election. It has to in order to save the falling dollar. We're in a damned if you do, damned if you don't situation.

[Ron Whitfield]

I've been saying this same thing, but in much less words, ...as in "we're XXXXed!", for a long time, watching as the inverted pyramid of Amarica get's more and more top heavy, and that when it topples.........