Tuesday, February 17, 2009

Welcome to 2009... again

Wow, we're only a month and a half into the year and most of the concerns I have are happening; perhaps you share some of them. I was going to post to all the economic news that supports the growing downturn, but there is so much it that it would be too big a task. But after seeing the article shown below, I chuckled at the title and the last statement the author made, considering my 2009 preview, Welcome to 2009.

Welcome to 2009, indeed!!!

2009-02-04: You Think 2008 Was Bad? Welcome to 2009
Eric Sprott and Sasha Solunac
By all accounts thus far, it's already been a pretty bad year... and we're only three weeks into it! If you will recall, 2008 was a pretty bad year for the banking sector. For example, the shares of Citigroup, Bank of America, and the Royal Bank of Scotland fell 77%, 66%, and 92%, respectively, in 2008. So far this year (remember, this is only three weeks) the same stocks are already down 50%, 55%, and 74%, respectively. Like we said, 2009 has already been a pretty bad year! For as bad as 2008 was, 2009 promises to be a whole lot worse. The problem isn't just the banking system anymore. The problem is the banking system and everything else. This year, the financial crisis of yesteryear is morphing into an altogether different animal. It's morphing into a financial crisis that has an economic crisis layered on top of it. In fact, to call the current environment an economic crisis is likely understating the situation. What we really have is a global economic catastrophe. One where weakness only begets more weakness, causing a vicious circle that is proving nigh impossible to reverse in spite of all the world's financial, economic, and political brain trust throwing everything they have, including the kitchen sink, at the problem.
We believe the problems of 2009 will make people yearn for 2008 all over again. In 2008 it was only savings and assets that got pillaged. In 2009 it will be jobs and incomes that get lost. In 2008 we had the Madoff Ponzi scheme, supposedly the largest fraud in history. In 2009 we have the US dollar Ponzi scheme - no contest. But to only pick on the dollar wouldn't be fair. As governments the world over take ever increasing roles in markets and the economy, all paper currencies will be at great risk, pillaging whatever savings people have left after 2008.

Welcome to 2009.


Hobo said...

I'm still wondering what the next bubble will be. I don't think it will be metals, commodities, or "green tech." They had better find it and start pumping it soon if the "third half recovery" is going to start in 2009.

tom12008 said...

Another case of what happens when lobbyists get laws rewritten in an industry's favor.

I wondered why so many more students have been "expressing" their educations by trying to knock out 4-year degrees in under fewer than 3. Even those from "good" families know that something's wrong.

With credit tighter and debt-to-income ratio averages not getting better, how can housing "recover"?