Well, its crunch time. Three days left until the trip to the distributable's installation and first use. Still have all the work to do that I had yesterday. Most of the day yesterday spent on quotes and such, so my plate is cleared for today. The Multiple Sclerosis symptoms seem to be increasing as the time remaining winds down. Certainly going to be a challenge for the next 10 days.
The President is on the radio now. Pushing the economic stimulus when speaking at the Department of Energy. Hoo-boy. I'm not picking up from anywhere that anyone in the government is understanding that the "old world" is over. Everything done so far looks like they're just trying to get back to the way things used to be and there's not enough money in the world for that. Obama's stimulus looks like he's paying lip service to the economy to further an expansion of government only. To me it looks like the spending (and they don't have the money) is mostly focused on things that won't help jobs so won't help those caught in the storm.
The crux of what we're living through now is the destruction of "wealth" derived from increased housing prices and the availability of cheap credit. The world as we know it is shifting into a new paradigm. This whole thing drives me nuts because its common sense. This after years of thinking myself nuts for being able to qualify for a $500k home loan and having credit card lines totalling over $200k. Watching people I thought made less than me afford Lexuses and Mercedes, bigger and bigger houses and amenities I couldn't. It didn't make sense before. Unfortunately, its been making sense for the last year or so. Let's look at what we've lost:
1) 401k's lost somewhere between 20 and 45 percent (good by retirement plans)
2) Home prices lost somewhere around 20% on average
3) We're shedding jobs at around 550k per month
As this is going on, the bulk of society is being split into 3 groups:
1) Those that over-extended themselves and are insolvent or approaching insolvency. Maybe they're under water in their mortgage, maybe they lost their jobs, maybe they figured that their wages would increase so they could dig themselves out of debt. With the economy deteriorating, these folks are being forced to cut back to survive, in most cases either choosing or being forced into forclosure and re-location. Since they're broke, they aren't going to spend.
2) Those that did it right during the 10 years of credit insanity. They lived within their means. Maybe their house is paid off, maybe not, but they planned to be able to make it financially if someone in the family lost a job. These folks are looking at the economic news and maybe their investments and they're not buying anything, because they don't want to lose what they have. They're worried about moving into the insolvent category.
3) Those on the lower and upper ends of the income scale. Things aren't changing for them as much. The upper end has lost money, but it probably isn't going to change how they spend or how they live. The lower end is maybe suffering lost jobs and credit problems, but they basically don't have a lot of money to spend anyway, and in current economic conditions, they probably have less to spend.
If you listen closely to the debate in government, its always been about "reaching a bottom", "lending money", supporting things so the economy could get back to the way it used to be. The problem is that when you talk about the guy that spends money, he's in one of the 3 groups listed above. The vast majority of folks aren't spending money on anything but necessities any more. They don't have it, or they're cutting back waiting for things to get worse. You can throw trillions and trillions of dollars (which we don't have) at the economy but you won't put a floor in anything. Housing value losses alone are somewhere in the neighborhood of $30 trillion dollars from their pead. Good luck with that. By propping things up, we're only postponing the inevitable.
And what's the inevitable?. I believe that the GDP is going to decline somewhere between 10 and 15 percent over the next couple of years. If we're lucky, the maximum contraction will be 15% Think about it. Do you really need a new car? Probably not. They'll last 10 years now, so if you don't have the money, you're going to make do. Do you really need new clothes? New shoes? New TV? New Computer? I mean really. Probably not. During the run-up to all this, we bought all kinds of things, and they're pretty new. So as the economy deteriorates, we just make due. The population of the US becoming more frugal by choice or necessity, but in mass and very quickly. Since 70% of our economy is derived from consumer spending, the economy is contracting at a dizzying rate as we become more frugal:
And there you have the paradox of thrift.... if we don't spend, things will get worse. Companies will go out of business. People will lose their jobs, then their houses. Housing prices will fall further. People will spend even less, leading companies to go out of business, people to lose their jobs, etc, etc, etc. Until we reach "bottom".
But I'm optimistic. As my market segment contracts, some of my competitors will cut back and some will go out of business. And I believe there will be pockets of opportunity where you can make money. The guys that clean out forclosed houses are making a ton of money in California, Arizona and Florida. They're in a pocket of opportunity. The key is finding the pockets. I think I found one recently. So I'm excited about working in those pockets and making it through the worst of this.
Scale - 10 is worst
Weather - 30 and Cold
Weather - 30 and Cold
Shaking - 4
Neck Pain - 0
Upper Back Pain - 4
Upper Back Pain - 4
Fatigue - 4
Foggy Head - 6
Foggy Head - 6
Tinitus - 5
Ears Full - 6
Hand Numb - 0
Ears Full - 6
Hand Numb - 0
Spatial Orientation - 6
Gastro - 6
Insomnia = 0
Eye Focus - 5
Sleep Kick - 0
Pain Meds - Yes
Benedryl last night - 1
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