Tuesday, January 27, 2009

Employment Layoffs Widen in Economy, More Sectors Impacted

Business Week Reports,  January 27, 2009, "Already 170,000 jobs have been lost in January. The U.S. economy lost 2.6 million jobs in 2008."  The worst news, though, may be that some economists say in their most optimistic view the U.S. has only reached the halfway mark in terms of the layoffs expected for this recession. A growing number of economists also say that the U.S. economy is not just shedding jobs temporarily, but may be undergoing a painful restructuring process that will eliminate some types of jobs for good. "We are seeing very large layoffs—the kind you get when companies don't expect to be re-employing any time soon," says Peter Morici, a professor at the Robert H. Smith School of Business at the University of Maryland. "They [represent] structural, not cyclical, changes to the economy. We're looking at a permanently smaller economy with prolonged unemployment at an unacceptable level." "We are very early in the cycle," says Morici. "We are going to see the fury of the Old Testament for what we have done to the economy."  Read the whole article at: http://www.businessweek.com/bwdaily/dnflash/content/jan2009/db20090126_735128.htm?chan=top+news_top+news+index+-+temp_top+story

The theme was continued by the New York Times that led off with this sentance, "Furloughs, wage reductions, hiring freezes and shorter hours simply did not do enough," The New York Times reported another 75,000 job losses from Caterpillar (20,000), Pfizer (19,500), Home Depot (7,500), Sprint (8,000), Microsoft (5,000), Texas Instruments (3,400).  Additionally, seasonal employment was down in 2008, "After a dismal holiday shopping season, retailers are letting employees go in droves. More than 66,600 retailing jobs were lost in December, the worst period since the late 1930s."  Read the whole article at: http://www.nytimes.com/2009/01/27/business/economy/27layoffs.html?ref=us

Perhaps the most quotable notable was offered by the Senior Economist Morici who said housing, real estate, automobiles, finance, and retail sectors are resetting to "permanent lower levels" of employment. Mike Montgomery, an economist with IHS Global Insight, asserts that many jobs in autos, manufacturing, apparel, and textiles aren't coming back. Those industries "have been in a long-term decline, and the recession is knocking them out."  

Monday, January 26, 2009

Fears of Credit Crunch Crimewave Hit UK

Crime in the UK -- Britain faces a "credit crunch crime wave", http://www.independent.co.uk/news/uk/crime/britain-unprepared-for-recession-crime-wave-opposition-claims-1513417.html
"ministers were warned yesterday after figures showed increases in burglary, theft and knife robberies. Conservatives and Liberal Democrats said there was "clear evidence" the recession was leading to increases in offences, while Jacqui Smith, the Home Secretary, insisted the Government was working to prevent the downturn leading to rises in criminality. Last week The Independent revealed many police forces were reporting sharp increases in some offences as the recession started to bite in the final three months of 2008, with burglary and robbery doubling in some areas. Yesterday's Home Office figures, which cover July to September, gave the first official indications that the economic downturn has coincided with signs of rising crime."

Fears over credit crunch crime wave, http://www.thisissouthwales.co.uk/news/Fears-credit-crunch-crime-wave/article-637092-detail/article.html
Excerpts, "SOUTH Wales may not escape a "credit crunch crime wave", despite figures released yesterday which show crime has fallen. Nationally, rises in burglary and theft prompted the Tories and Liberal Democrats to issue a warning that crime would continue to rise as long as the economy was failing, despite there being a reported three per cent reduction in crime overall in the UK.
On Tuesday, the Chief Constable of South Wales, Barbara Wilding, said burglaries, robberies and domestic abuse cases were the most likely to rise."

Fears of credit crunch crimewave, By Ben Parsons, Crime Reporter . The Argus, 10:00pm Friday 23rd January 2009; http://www.theargus.co.uk/news/4072644.Fears_of_credit_crunch_crimewave/
Excerpts, "Desperate families are stealing food from shops as the recession drives people to crime. Frozen food, bread and meat are being snatched from the shelves, prompting fears a credit crunch crimewave is already hitting Sussex. At the end of 2008 robberies in the county were up nearly a quarter on the year before, with burglaries also on the rise. The figures have prompted calls for more police on the streets and a plan to deal with a rise in stealing as the economy worsens. The most shocking examples in recent weeks have come from Lewes, where police have seen a 40% rise in shoplifting compared with last year. Officers reported many of the culprits are simply people stealing food to feed their families.

Tuesday, January 13, 2009

Investors Business Daily - Crime Wave Coming...

Posted 1/12/2009

From the Investors Business Daily we read the following editorial (partial)-- 

"Law And Order: It was the one issue left undebated during a campaign full of debates. But crime, along with the economy, may be one of the biggest issues this new administration faces.  In fact, the two issues may be connected. The FBI is already blaming the bad economy for a rash of armed bank robberies around the country. And bandits, quiet for years, have become more brazen. In the Los Angeles area, which has seen a spike in robberies, they've pistol-whipped tellers. In North Carolina, Maryland and Kentucky, armed robbers have even kidnapped bank workers and their kids and forced the employees to help in heists. The FBI is also seeing a trend of entire ATMs being swiped. Solving bank robberies is what the FBI does best. But it's preoccupied with a politically motivated witch hunt against "predatory" bankers — not robbers — right now. That has to change.  In another sign of the times, shoplifting is on the rise, with some major retailers reporting a record 20% surge in store theft."

Read the full article at http://www.investors.com/editorial/editorialcontent.asp?secid=1501&status=article&id=316653238215116

Monday, January 12, 2009

The Happy in New Year, was getting out of 2008

The Happy in New Year, was getting out of 2008 while still standing.  Consider what we navigated in 2008 as we swam through the financial guantlet of floating ice.

Early drop in stock market starting the first week of January, then successive bear market rallies with lower highs, and lower lows throughout the year;
  • Credit Default Swaps exposed for what they truly were -- as Warren Buffet said, CDOs were nuclear..."weapons of mass financial destruction...";
  • Bear Stearns collapse in early Spring 2008, marks the beginning of the end for investment banks;
  • Housing prices continue collapse month over month, many homeowners financially underwater;
  • Commodities (e.g., oil, agriculture, gold) rise radically then fall almost as quickly by year-end;
  • Financial crises in July 2008 heightens, with shotgun weddings of financial firms with Treasury Department arranged marriages;
  • China's Olympic moment gives pause and splendor; Chinese government invested huge sums, creates one-of-a-kind experience; however, with the end of the games, comes the end of Chinese internal investment in infrastructure, accompanying unexpected dramatic fall-off in exports, and China economy stalls and falls;
  • Financial crises turns economic crises in September 2008 and bursts on 9/15/08, Lehman Brothers bankruptcy, AIG failure and government bailout, Fannie Mae and Freddie Mac mortgage security failures and government backing;
  • Credit market freezes, lending halts, order of magnitude of fear not seen since the 1930s;
  • Stock market crashes in several legs downward, lower highs, and lower lows continues;
  • Unemployment rises in massive spikes rising above 500k job losses per month in October;
  • US Presidential Election and landslide turnout for change in November;
  • US consumer and business purchasing stalls abruptly, capital intensive industries such as automakers fail -- kept on life support by government bailouts and temporary loans;
  • Retailers beggar each other with discount sales and reduced profits dumping inventory before year-end;
  • Santa Clause fails to bring a sustainable rally in the stock markets and the broader markets are off 33%-41% for 2008;
  • Some geographic localities in the USA already show signs of being in deep economic depression -- consider Detroit where in November 2008 the newspaper printed 137 pages of home foreclosure notices and only 4 page of employment notices -- homes can be had for as little as the taxes owed.
  • The list could go on, but you get the picture.  2008 will go down in the history books as one of the  worst years in financial history in the past 100-years, and the trouble is, the trend is still headed downards in 2009.

    Happily, there is some optimism headed into this coming week with President Barrack Obama taking office, giving everyone a welcome breather, and there may be a short period of weeks or months where he has a honeymoon; however if the new President gets any sleep he will be distraught by nightmares of a collapsing economy, and a government with fewer financial and policy bullets to fight the escalating economic problem.  

    The best I can tell, most everyone is still focused on preservation of capital andkeeping their jobs.  Some now are starting to look deeper at the ramifications of what's next.  Job losses are expected to accelerate now that the new year is finally here (with some predicting a series of 1 million job loss months in the new year), now that the Christmas retail season is over.  Credit tightening continues for consumers and businesses.  Unemployment will continue to surprise attack many familes that were formerly feeling safe.  

    2009 will be the year of Guns and Gardens -- a year when you plow up your grassy backyard and plant a garden hoping to stretch your food dollar a little further, and you purchase a gun to protect your family when municipal budgets shrink and with it police protection and you are left alone in your garden.  The depression era slogan, 'better belly burst than good food waste,' will return, as food the precious commodity will be more expensive by year end.  What is deflation now, will turn to inflation when inventories dry up.  What is cheap at the beginning of the year, may be more expensive by year-end.  

    As I have been predicting in this blog, crime will be going up in 2009, with a noticable crime wave occuring by Q4 2009.  Many will have a difficult time with adapting to their reduced earning power and lowered standards of living; a few will resort to crime to make up the difference.  Self-preservation will become a strong theme voiced louder and louder throughout the year.  There will come  a time when the collective crowd will realize that the government cannot help them further.  At that time, the country and rurals may look more attractive to families, certainly there will be safety in fewer numbers and farms.  Thinking practically, investment in bullets and seeds will be good business bets in 2009.

    It is time for me to complete the writing of my book -- Economic Misery and Crime Waves -- the future history of the second great depression and the crime wave that followed, and what to do about it.   There are many things that can be done now or soon to avert the worst of the crises, and it is up to our collective genius to pitch in and resolve this matter in a manner that contributes to the greater good, or surely the situation will resolve itself with greater pain if we do nothing.  

    # # #

    In other news, 

    Jan 8, 2009 10:32 AM, By Patrick Barnard
    "It’s no secret that when the economy tanks, retail crime goes up. Especially when it comes to crimes such as shoplifting, returns fraud and use of stolen credit cards. This recession is no exception: According to the Retail Industry Leaders Association’s 2008 Current Crime Trends Survey, retail crimes are trending up and will likely continue to increase through the rest of 2009.  Of the 52 major U.S. retailers that participated in the survey, which was released Dec. 1, 84% reported an increase in theft/amateur shoplifting; 76% reported an increase in financial fraud; and 80% reported an increase in organized retail crime. Retailers also reported a sharp uptick in robberies and burglaries in 2008. “All of the crimes that retailers experience are trending up,” says Paul Jones, vice president asset protection, for RILA. “Taking a shotgun view of this, 2009 looks like it will be a real challenge for retailers: External theft, internal theft, robberies, break-ins, bad checks, stolen credit cards -- all of that type of stuff that hurts the bottom line.”  Jones says “anytime we see an economic decline, those people who abuse the system, who commit crimes, tend to come out in droves. So logic would say that we’re going to see some problems.” Another alarming trend is the rise in retail returns fraud, in which criminals fraudulently return goods for profit. For example, there’s receipt fraud. This is when falsified, stolen, or reused receipts are used to return merchandise.