Calm Before the Storm

An Economic Storm is brewing globally
Here are some recap facts to back our already posted prediction of mass unemployment coming in mid 2009 through 2010.

Fuel prices are only down because of the demand is gone, now people are back on America’s streets driving all over the place again however this will drive the fuel prices back up again in 2009 to near 100.00 dollars per 30 gallon barrel and when these people driving get where they are going they are not spending any money watch people when you are out you will see this change from years past. Day trips are more in favor to overnight trips requiring staying at resorts, hotels and motels.

Housing prices will come down 17% to 20% so say the experts
Housing to correct putting it in line with Earnings to Loan Ratio we must return nationwide to a housing price of 2000-2002 levels so the experts are now saying.

Unfortunately they the so called and paid experts are again overly optimistic along with being late so they look good not going out on the limb and here is why we see the current housing prices nationwide will need to come down not to 2000 to 2002 prices but to 1987 - 1989 about 40% (we did not do the math) and this is brought on by this economic downturn being the biggest economic decline ever. We believe that this is going to top the 1929 - 1933 Great Depression.

Retail space nationwide will be 50% empty
Why is Logic predicting this is simple the coming Christmas 2008 will look like the roaring 80’s in comparison to the coming 2009 and 2010 Christmas periods. Look America is no longer a producer of goods and while building homes and buildings is a product we produce but when it is all said and done these are only boxes especially when they are empty.

Bringing in products from overseas then marking them up and reselling them to consumers was never a very good business model.

Industry areas to pay very close attention to
Keep your eye on the sports and entertainment industries and your stars or what we call figures and the prices they command we envision these two industries are going to get hit hardest and it will be before 2010 as the number of persons on the street begin to realize that paying the admission ticket prices is not affordable at the current levels driving down the current commanded prices. Not to mention that with unemployment in the world sinking to levels worse then the Great Depression of 25% that this time will be 40%.

Do not take your eye off of the travel industry (including hotels) it is going to be reduced globally by 60% in 2009 - 2010 as well resulting in massive additional layoffs.

The silent unemployment figures
Remember that while all of the Fortune 1000 Companies are making the papers and wires with their announced layoffs that is not telling any of us the truth actually 2/3 rds of all employees work for small to mid sized companies that you will not hear about during these layoff announcements.

How can this Logic be so right about what is to come
We wrote this article on this blog long before the blog we were talking to all that would listen and we predicted the housing market bubble date was March 2006 and it came true also we have predicted and posted on this blog the incorrect current experts on unemployment are dead wrong and our now famous percentage of US Unemployment for 2010 that is a link in the article is worthy of a click while you are reading.

Logic for President
There is a way to get through this and even come out stronger, we all shall prosper as well
We also beat our new leader Mr. Obama to the US Infrastructure stimulus fund concept he is on the right course incorrect but doing something anyways but read our article dated November 07, 2008 titled Best Business to start is named VC.

Why do cities have parks
They are here for what we believe and this is really scary and you might not want read this thought but these parks are really here for tent cities where we will be housing the highest unemployment seen in America’s history and it going to be the price we will pay for 20 years of over indulgence and easy credit followed by American’s returning to savers and no longer consumers for the coming 20 to 30 years.

Obamanisum

Tribune needs a bailout
How on earth a newspaper organization that started in 1847 ended up in bankruptcy is really easy to answer and is as easy to answer for anyone that is loosing their home or business right now.

Something to think about and we hope this does not happen
How many US businesses will be partly or wholly owned by the tax payer (our government) is a real issue that should have every single American citizen feeling a little insecure.

This becomes what is known as state owned or communism (a harsh word with a bad past for give me) just look at what we predicted below about the Obama statement of US infrastructure work programs and compare it to state owned government countries where the people work for government backed private employers, what ever you want to call it.

Now back to the Tribune
They sell advertising and subscriptions so how do you accumulate 13 Billion Dollars with “B” in debt or even are allowed to build up such a debt knowing that you are going to destroy a company that has been getting along for over 153 years.

This is a clear shame and the company itself is a victim of management nowisum and corporate greed making you no better of smarter then the greedy home buyer who knew they could not afford the house but thought bigger returns on a bigger house is a better 20% gainer unless the economy turns (oh ya it did).

Welcome in the easy credit that coupled with a belief that all things known around the Logic’s place as stuff would continue to rise in price and value. That American’s would buy anything and everything, we knew this was ending so where was management and the experts back in 2002/2003. The potentaul income to debt ratio clearly got seperated and expanded out of total control.

Income to debt ratio
It is not ok but a little clearer to how consumers got caught up in the belief that their home would just go up 20% plus each year even though no person could be this dumb (we did not think) if they were capable of knowing to buy a house and not realizing that while all this stuff was going up in value their payroll checks increased a little or remained the same year after year that this meant that there was a ratio of separation going on.

What we find most amazing is personal, company and corporate money management was not living in the real world and this is being well discussed around here about non-management of resources and this has really lead to where we are all at right now.

Obama Omama Talk
Look to our newly elected leader to break the required promises he made to get elected and this is important to share that we all please pay close attention to what you see getting done by our leader and not what he comes out and says to us.

Expectations set to high lead to a real letdown
We are going to look forward and envision the future 3 to 4 years of Mr. I will make it better who now after election admits it is going to get worse before our economy gets better (no brain-er sir, that is how the economy adjusts, a price must be paid) and we will come out of this stronger then before.

Unfortunately we will also own as a tax payer and owners of the US Government and their US backed bailouts a piece of poorly run businesses and over priced home loans that three generations will be paying for if our calculations did not fail us before the thought of US consumers becoming savers once again fails us in forward looking easy times, leading this third generation to begin spending like it is 1999 only it will be 2026 to 2036.

Unemployment
Here comes the biggest issue of all, with the highest unemployment headed our way in Q-1 2009 through 2010 (35 to 45% derived 25 actual 1929 + those that can but do not choose to work 15% +/- 5%) and with American’s returning to post depression saving ethics and education of those carbon footprints they all needed to have, America’s government will not find it as easy to increase consumption taxes but will target all working American’s to begin the slow loan payback for these newly printed dollars.

Times have changed, so has our work force
If you think Logic is wrong then why is the government returning to government subsidized infrastructure building to a scale not seen since following the great depression already? because they have trend analysis (they are doing the math) however this time we are dealing with a society that does not have mechanical skills, the greatest work ethic or the will of manual labor just ask anyone under 30 years of age where the oil dip stick is located in their car and they are going to look at you like you are insane, cars no longer leak oil is their excuse.

30+ years of tax hikes
This is going to lead to tax hikes, do the math please the government has no choice but to tax all of us that actually work in America today and by the way the few rich cannot pay the way for the masses and as a reminder no investment in the world can support the masses including government intervention.

Paulson and Bernanke carpooled

Two stories were both old news
As to whether these two the Fed Chairman and the Treasury Secretary carpooled or not Logic does not know but their equally same sounding statements are being told about two years and nine months later according to our calculations.

If we are wrong why did the government make filing for personal bankruptcy harder back in 2005 before the housing market bubble, in our opinion began to show the tell, tell signs of bursting in late March 2006.

Do not buy into the Opps factor
In life folks there are never coincidences only planning and the thought that we believe these highly educated economists paid by us the tax payers you and I were possibly withheld the data they had in their hands trying to hold off what is now headed our way. Please read the next posting down this blog page titled Economic Injury you will see what holding out vital information is going to lead us into.

Consumers need to focus on paying down debt and then building on savings
We cannot believe the government is holding out that tomorrow is going to be bailed out instead of allowing our country and the world to pay back the easy times of the past 15 to 20 years though the past 7 to 10 years were the accelerator that landed us here and has now placed us in chaos. Restore the consumers credit card rates and available credit, no way this is dishing out more of what the banks and the Fed just got done doing. Credit should be earned after proven there was a good reason why you had to save up your money to make a down payment on homes and cars and credit should not a right of passage or something.

Logic knew what to look for and so did the Fed
The government knew it should have begun back when Logic saw this unless these same people were either not looking into (not doing their jobs) or were told not to look into these escalating issues we are all now going to be paying for, for the coming 2 to 4 years then followed by an additional flat economy from now and for 20 to 30 years paying down debt then saving for decades to come educating our children similarly as our parents and grand parents did following the Great Depression though never to repeat history in the same way this to will be done differently then back then.

Economic Indicator was telling the US Government what was coming
How easy was it to see this coming, even for a hobbyist economist like Logic is actually a simple view into one a main single fundamental called household earnings to barrowing ratio that got ignored as it separated too the largest level since the Great Depression.

You did not have to be an expert to see this coming
Logic in no way has the economic skills of these two gentlemen Bernanke primarily and Paulson secondarily as well both are surrounded by armies of experts paid again by you and I the tax payers to report the honest truth.

Please form your own opinion
So please take a second and ask yourself this, why did they actually know what and where we were headed and if we are correct and I bet you we are then who forced them to stay quiet about this important and catastrophic global information?

Economic Injury

What is up on Black Friday is down on Monday’s market even Cyber Monday
Logic is going to stay short on today’s market report and results as this is no surprise to Logic as you can look within this blog since June 2008 however we have been at this economic anylyzing as our hobby since 1983.

We hope you can see where we predicted the global population is moving into saving their money and not spending it on anything they do not need. We are going to see the US savings rates go from negative savings to +8% over the next 20 to 30 years. Please not we predicted with our friends the end of the housing boom in March 2006 in our opinion.

Unless your head has been buried in the sand
This should be of no surprise that our economy is two years from a correction to the masses. What is still in need of happening is three things off of the top of Logic’s head.
1 Unemployment mostly from sells of most stuff, retail and food services must fall a long ways around 51.5 million or a guess of 40% of actual employable.

2 Commercial retail space vacancies must come down around 50%. Why consumer spending becomes bill paying and saving their money.

3 A time of third world nation rioting then some civil unrest nearing Q-1 of 2010. Cause a taste of money now taken away but these people are hungry for more.

Positive Rewards of a down economy
After all of these events take place call them corrections on steroids, we will slowly move along not up not down for some 20 to 30 years with moderate signs of upswings here and there and finally after paying the price for easy credit for things we truly did not need nor reaslly earn and with a stable household cashflow in the bank of the masses, America and the Global economy will once again see sunshine days and starry nights.