Tuesday, April 7, 2009

Wash your troubles away with some of Granny's lye soap

The number of dry carrier ships that are being mothballed worldwide has increased significantly again last month indicating a continuing downturn in trade. The G-20 pledged 1.2 trillion to the IMF but is questionable whether this is going to do anything to increase trade in time to stave off collapse. Lack of trade will likely impact the quarterly profit and loss (or rather the loss and bigger loss) statements of large American companies in the coming weeks.

The stock market has already been moving briskly downward with information trickling out about how much the big banks are hiding in toxic assets. With the change in Federal accounting standards hiding these assets it is now possible without committing too many felonies and this is spooking investors. The media is fixated on urban gang members being rounded up by the FBI for participating in schemes to arrange fraudulent loans using crooked appraisers and complicit loan officers. They are ignoring the skyscrapers and shopping malls that are now selling for half what they have owed on them. Venture capitalists also engaged in practices that saddled companies with billions in debt that will need to be written down in Chapter 11. These are Billions that good Republicans walked away with and get to keep, but the former gang banger that cleared a hundred grand flipping a house to somebody who never made the payments is what is all over the news.

The only so-called bright spot is that consumer debt is going down but this reduction is concentrated in revolving credit. Consumers are finding their credit limits cut dramatically even if they haven’t joined the swelling ranks of the jobless. More companies are planning layoffs and cutbacks. Desperate to find some indicator that factory activity is picking up, the analysts are pointing to an upswing in the price of beef tallow used for soap making. Given what has been going on for the last eight years, I don’t think that will wash away our troubles.

1 comments:

Granny Grim said...

Hey thar Prairie 2!

Tis Granny Grim, and I make that thar Lye Soap. This is not good news to me!