Monday, August 17, 2009
Have We Hit Bottom In The Great Recession?
I sure hope so, and my favorite friends the "economists" are suggesting it. Let's just be sure that it's not a bottom that is fifty feet below the water's surface; if it is, then we won't have a sufficient air supply to allow us to rise up to see the sun and breathe freely again.
I do not believe that we have even come close to bottoming out. A series of links below tell the story about the real economic news. We are still losing jobs at an alarming pace and these jobs will not be replaced very soon, if ever.
Smaller banks are getting blown out faster than bald tires on a heavy truck. Commercial real estate is not in the tank, it's in an acid bath.
Retail sales, including those for the vaunted back-to-school season, the home improvement industry and virtually anything else you care to think about, are anemic. Even "cash-for-clunkers" has an inherent problem. The automakers can't manufacture qualifying cars fast enough, they still have mountains in inventory that does not qualify for the program and with all that, the best selling vehicles are all made by foreign car makers (admittedly in their US plants.)
California is literally on the rocks, and the vacancy rate in Southern Cal is moribund. Airlines too are complaining that their business models are not sustainable.
This is a worldwide problem despite a few bright spots coming from Asia and Europe. The linkages between these economies ensures that if one nation does poorly, the rest will also suffer. The same economists who predict bottoms also regurgitate their optimistic auguries on very scant data, collected during an extremely short time period. I did not trust these folks a year ago and I am even more mistrustful today. In my opinion, only the politicians stand lower in the intellectual pecking order.
Have We Hit Bottom?
Jobs A Scary Reality
Commercial Loan Defaults
Southern California Vacancies