U.S. job losses worst since 1974 as downturn deepens Fri Dec 5, 2008 - graph frrom Reuters article

Talking Point: LQ(last quarter=Disaster)
or
learning how to grow your own groceries – Or Else!

So far, in this economic fiscal quarter:

• ½ the value of the investment in markets lost
• Home foreclosures out the roof and more coming
• Unemployment soared beyond 8%
• No President in History has spent as much as Barak Obama and he did it in less than in one fiscal quarter.
• In about 40 days Obama spent more than George W Bush did in 8 years.

An Historical view, and keep in mind that I am not 85 or 90, I am a boomer and I did not live through the depression, would easily show you that our situation is worse of course, than 1974(after 1973 Oil Embargo), where the US experienced only a 1% loss of jobs. Believe me, I recall. I was farming the family farm and putting myself through a Jesuit University. Indeed, I believe it is approaching the epic proportions of the Great Depression.

In 1974, as I recall, we had approximately 200 Million people. Back then, although it was a problem that nobody talked about, we had an estimated illegal Alien which was about .5 % of the total population (yes, that is the correct term). Within 10 years that percentage of our population had nearly doubled to 1%.

In 1974, OPEC ended it’s Oil embargo—this occurred during the Yom Kippur War which began in 1973, because the Muslim world felt they were being ignored, ostensibly, and could not accept Israel as a viable nation state – and they still don’t (see the news this AM at the UN Conference in Geneva and President Mahmoud Ahmadinejad statements, causing western nations to walk out).

Back to 1974--Who led this war? Anwar al-Sadat of Egypt. During Yom Kippur, October 6, 1973 in the midst of the turmoil caused by the Arab Oil Embargo, a two prong offensive moved against Israel – Syria from the topside, Egypt from the east with forces of Libya, Jordan and other Arab states joining in. It took Israel days to fully mobilize but they forced Egypt to sign agree to a cease fire by October 20th but it took Israel months to fend off and push Syria out of what is known as the left bank and a cease fire was agreed to by Syria in the spring of 1974.

In 1974, Nixon Resigned, Ford became President and we were about to enter the travesty we heaped upon the South – Vietnam that is, by abandoning them. Oh. Carter. Followed on of course and it was during his watch in 1979 that the camp David Accords were agreed to by, none other than Anwar Sadat and Menachem Begin. Now of course, what we hear about is Anwar Sadat (who was assassinated because of this agreement) and Jimmy Carter. What we don’t hear is that Sadat led the preparation and assault on Israel in the first place. Nor do we hear about Begin and Israel, what happened during the attack nor do we hear of Begin’s efforts get the non-aggression agreement signed. Agreed it was a first in modern history.

In 1974, 1% of US Jobs were lost. The population of the US was approximately 215 million. The population estimate for the US in 2008 was 306 million.)

In January, 2009, 600,000 jobs were lost. This is the worst case since December 1974 during the oil embargo and the Yom Kippur War.

Nov-Jan the US Job losses were 3.6 Million jobs and it is estimated that since 2005, that 13 million US jobs were lost. Of course, some of this is transitory, people found other jobs but the situation is worsening.

The number of unemployed is now 13 Million (who were employed in 2008), and the rate is 8.1%, a 25 year high. In February it was about 7.6%. and started at about 5% in February 2008.(note: I am not even going to address the machination that occurred to change how unemployment was measured by the Department of Labor back in the late 70s).

Where is our Consumer economy when we look at a recent 10 million new unemployed….and let us use the proper term, Consumers, not workers… Let’s just settle on 10 million as a number, recently unemployed consumers. A serious problem But look, what we are talking about is that the stimulus packages that were to re-instill vigor in the financial sector, a “PROGRESSIVE=Statist=Socialist" action begun by George W Bush, US President, and continued by his successor, Barak Obama. Has any of it worked? How about home foreclosures, what is that caused by? I suggest people out of work.

Let’s say 10 million added to unemployment (using a conservative figure and view). That is 10 million people not making vehicle purchases. Driving up and down I-45 North Houston, I have seen numerous Auto Sales lots out of Business(perhaps 100 between Houston and Conroe, maybe more) this includes major automobile dealerships). And I believe that Houston is still viable at least more so than many other large urban areas.

These same 13 million are no longer in the market for a bigger better home and obviously, many are losing the home they have. This is 10 million (and their families) who are scraping by – they used up their credit cards, depleted their bank accounts, and are wondering what is going to happen next.

This is the springboard that occurred in the 1930s. The Market tumbled and did not recover. We switched Presidents. The new Progressive President started all sorts of Government programs to save us from the depression, starting the steady march into the early introduction of socialism in the US – and this worsened the cycle of the economic disaster to continue to an staggering problem which in it’s worse case was 1937. The problem caused the springboard from a stock market collapse into job losses into complete collapse and a return to local barter economy for many people. Luckily, the population majority was still on the farm. They knew how to grow their own groceries. It wasn’t until the end of WW II oddly enough, that the majority of the population shifted to urban and city environments – the war and our involvement in it was the stimulus to the economy that brought us out the depression. It began the “good times” as people found jobs and the growth of the nation’s infrastructure and the newly discovered “consumer economy” began to flourish.

But what happens if the trend continues. I think the March numbers are 650,000 job losses. If you do the math, then about 7.5 million more jobs will be lost in 2009. Housing starts will continue to decline, auto purchases will dwindle even further and home, farm and business foreclosures will expand.

Well, I am a boomer and I am nearly 60. I won’t be able to depend on Social Security to support me. I have lost a great deal of retirement money based in 401k’s and poor financial decisions. I do have one small retirement income to add on to social security. In the past 5 years, my estimated retirement income has dropped by more than one-half.

The Daily Reckoning Financial Letter calls the above scenario the “Multiplier Affect”. Whatever you call it, it is the spring-board to disaster if our elected government continues its progressive approach to attempt to stave off disaster. The warning though, from the Daily Reckoning authors is that there is a second multiplier – and you have to consider what this means. Have you heard the terms, Option ARM or Alt-A? Well, you must be quite familiar with “Subprime” as this is part of the disaster that the American Left, meaning the DNC, the Democratic Party and the progressives of both got us involved with during the Clinton Administration – loaning at sub-prime rates to people who could not obtain a mortgage otherwise. Which is the reason that so many financial institutions demanded the bailout (and Bush began to shovel money into that deep hole followed by all of the progressive solution representatives we put in office).

Of course the subprime problem peaked in 2008, we shoveled money at it and we have seen the result – it still had the level of foreclosures that it had. Nothing could be done to stop it –er-- how can you stave it off if American’s are becoming unemployed in the process, even with a 2 income family. After all, this two income basis for the family unit caused spending and commitment beyond logical safe means. The loss of one job means the plan falls apart. AND IT DID.

But what about these other loan types, ALT-A Option ARM? These mortgage failures are just beginning to ramp up. Which means they will peak at some point in the future, just as the problems with the failing Subprime notes and the institutions that financed them were beginning to tail off, putting the next wave of failing mortgages and financial institutions and this will occur over the next two or three years.

A Big Question is: How has all this progressive spending approach-voodoo(SORRY, COULDN'T RESIST)-economics solved any problem that we are experiencing? How did it work circa 1929 through 1938? FDR FOR HOOVER. In this period of time, we went from President A, the golden boy of Progressivism to the installation of the Socialist State in the person of President B. Franklin D. Roosevelt

(lOOK! WHAT WE TRADED BUSH IN FOR!)

The Next Big Question is: As people continue to lose jobs, the jobless rate increases, the purchase of goods and services is reduced to necessities – the consumer economy will begin to teeter on the brink of disaster. …but this last big question is, how far will this go? How deep is this pile of manure into which we have been cast? How long are we going to trust the current leadership to stave off rather than worsen the conditions? And if that was a question, then what all of this requires Ed Sullivan to say: "And now for the REALLY BIG SHOW"--er-- question is:

How Gullible are the American people really? They are pretty damned gullible in my opinion to have elected Barak Obama. I have thrown up my hands essentially on the American People, who have traded what they thought would get them security -- TO GET WHAT WE HAVE NOW!

ALREADY SPENT are Trillions of Dollars. How is this going to help? Where did this money come from? It wasn’t in the treasury or Ft. Knox. It is not backed by the gold standard. It is Fiat money. Money that is printed essentially with a promise to pay it back sometime in the future. So it is LQ=Disasters….the events of the last quarter alone are indicating economic disaster. Still comfy in your home? Stand by, that may change very quickly.

Here is the really, really, really big worry: Today most folks don’t even know how to grow their own groceries.