Shocking Poll Figures on 401 K Deposits

According to a Chicago Tribune article published today, approximately one-third of all Baby Boomers polled reported having recently stopped making payments into their 401 K retirement accounts. Aside from the negative tax implications, this is a shocking figure. Just at a time when those in the 44-64 age group should be maximizing their savings for retirement, many are drawing down their nest eggs.

Aside from the fact that the recession is starting to bite and gas prices keep skyrocketing, the implications of this factoid are downright frightening. Even if Social Security remains solvent (doubtful), these people are going to be in real financial trouble as they become senior citizens.

U.S. Consumer Debt Rises More Than Forecast in March

http://www.bloomberg.com/apps/news

This article pretty much speaks for itself:

U.S. consumer borrowing jumped more than double the amount economists forecast in March, indicating a slowing economy is forcing Americans to accumulate credit-card and other forms of debt.
Consumer credit increased by $15.3 billion for the month to $2.56 trillion, the biggest monthly rise since November, the Federal Reserve said today in Washington. In February, credit rose by $6.5 billion, previously reported as an increase of $5.2 billion. The Fed's report doesn't cover borrowing secured by real estate, such as home-equity loans.

Consumers are turning to credit cards after banks tightened standards for home-equity loans and other borrowing. The March figures brought U.S. consumer borrowing in the first quarter to $34 billion, the most since the first three months of 2001, when the economy entered its last official recession.

Recession? What Recession?

What's a Penny Worth These Days? Try 4 Cents.

That's right, the copper that comprises every penny minted is now worth four times more than the penny itself as currency. So how long before pennies start disappearing in huge numbers into melting pots?

I have a solution. When the price of copper raises the value of the Lincoln coin to 5 cents, we'll just call it the "new nickel" and stop minting nickels. Easy!

Chart Porn: Subprime Apocalypse

This chart shows the total dollar value of non-traditional mortgages tracked by quarter since 2001. As you can see these types of mortgages, particularly Subprime and Alt-A mortgages, have all but disappeared in 2008. What is striking is the particular frenzy of such mortages being issued during the first half of 2007 before the bottom fell out. All in all, this represents the disappearance of what was as of 2006 nearly a trillion dollar annual market almost overnight.

Yet another dramatic illustration of why home values are continuing to crash.

Households Going Broke

Need more proof than American households are drowning in debt? Here ya go.

Chart Porn: California Default Notices

This is one of those charts that pretty much explains itself. Over at the far right, you can see how the number of mortgage defaults in the nation's largest state have absolutely exploded. Of course, the 2008 data is extrapolated based upon first quarter numbers, but does any reasonable person expect it will get better as this year wears on?

$119 - The Only Economic Indicator that Matters

Oil prices hit $119.90 per barrel today. In 2002, during the run up to the Iraq War, oil was trading for as little $22 per barrel. That's a nearly fivefold increase in just six years.

You can have your Dow Jones Industrial Average, your S&P 500, your unemployment rate, your official inflation rate, your currency exchange rate, etc., etc., etc. When it comes to the economy, there is only one figure that really matters.

And right now that figure is $119 a barrel.

Food Rationing in the United States?

http://www2.nysun.com/article/74994

Apparently so, though it is hardly an epidemic. Here's a quote:

Many parts of America, long considered the breadbasket of the world, are now confronting a once unthinkable phenomenon: food rationing. Major retailers in New York, in areas of New England, and on the West Coast are limiting purchases of flour, rice, and cooking oil as demand outstrips supply. There are also anecdotal reports that some consumers are hoarding grain stocks.

This is another story to watch over the long term. Americans cannot fathom such a thing as food shortages in their own country, but its likely to get worse going forward.

Gasoline and Food Costs Crowding Out Other Spending

This, of course, is no great surprise. Two things to note here: 1). The dramatic drop in spending on anything other than necessities, and 2). This is already the largest drop in non-gasoline spending since the Daddy Bush recession.

The Recession Hits Tinsel Town

Just read today that movie box office receipts are down 7% thus far this year. Part of decline, to be sure, might be because of the underwhelming fare Hollywood has released lately. George Clooney's Leatherheads, for example, was a critical and commercial bomb despite the fact that Clooney in an action comedy is usually money in the bank.

This leads me to present the second of my own personal economic indicators: Empty Seats in Movie Theaters or ESMT. I will be tracking these figures from time to time along with the ESBP, Empty Seats at Ballparks.

Now if you'll excuse me, I have to go watch No Country for Old Men on DVD again.

At Least ONE International Stock Market "Gets It"

By all rational measures, the U.S. stock market should have entered a deep decline by now. The spiraling gas prices have taken money out of consumers' hands, and there is every indication that it is just going to get worse as summer approaches.

Interestingly, investors in Shanghai, representing the country where many of America's crappy consumer goods are produced, have already seen the market crash. As this graph shows, the Shanghai Composit is down nearly 50% since October.

More reason to believe that this recent run up in American stocks is just a "dead cat bounce" and there will be a dramatic reversal in the near future.

The Numbers

Chimpy's DISAPPROVAL Rating: 67% (highest ever)

Those Who Think the Economy is "Poor" or "Not Good": 90%

Price of a Barrel of Oil Today: $117

Average Price of a Gallon of Gas Today: $3.45

Average Price of a Gallon of Diesel Today: $4.17

Pilots Claim Airliners Forced to Fly With Low Fuel

http://www.msnbc.msn.com/id/24034468/

That's right, as if it wasn't already aggravating enough to fly these days, now the pilot's union is claiming that the airlines are trying to cut costs by not putting enough jet fuel into their planes.

So they practically strip search you going through airport security, confiscating any 3.5 ounce bottle of mouthwash, just so you can die when a jet stuck in a holding pattern crashes while circling the airport.

Fucking brilliant.

More Chart Porn: March Inflation Numbers

This chart shows the year over year producer price index with the 2% target rate represented by the red dotted line. What is striking beyond the staggering jump in the raw/crude inflation numbers is how the finished product numbers are lagging way behind.

I'll admit I'm no economist, but I would gather that there's some lag time before the finished product prices catch up with the raw/crude prices. So just imagine how bad inflation will be by this summer.

Price of Cocaine Soars in Europe Due to Weak Dollar

http://news.bbc.co.uk/2/hi/business/7342946.stm

Seems things are tough all over...especially for Eurotrash assholes sporting three-day beards at bad discothèques in their cheap Armani suits. Here's a quote from the story:

Europe has seen a huge increase in availability as traffickers take advantage of the exchange rate.

So, now you can't even afford to get fucked up so you can try to forget how fucked you are.

Linens-N-Things First Major Retailer to Go Belly Up in This Recession

http://online.wsj.com/article/SB120788502599307497.html?mod=hps_us_whats_news

This first major domino in the retail sector falls. So who is next? I also read today that Kohls's sales fell $15% in March, so I'm placing my bet on them.

Coming soon to a strip mall near you: LOTS of empty storefronts.

ESBP 2: The Washington Story

Last week, in honor of the Baltimore Orioles posting their lowest attendance ever at Camden Yards, I inaugurated my personal economic indicator: Empty Seats at Ball Parks, or ESBP. Unfortunately, the latest example struck a little closer to home.

The Washington Nationals set an unfortunate record of their own on Monday night as only about 20,000 fans showed up to watch their second home game of the season against the Florida Marlins (pictured). 20,000 doesn't sound so bad, you say? Well, 20,000 is the smallest attndance ever for a second game in a brand new stadium in the modern era. I was there, and let me say the crowd seemed even smaller than the official total.

Oh, and the Nats dropped the game 10-7.

Next Financial Domino Falling

http://biz.yahoo.com/ap/080408/washington_mutual.html

Washington Mutual has become the latest focus of market watchers as it threatens to go the Bear Stearns route to oblivion. According to the story:

Washington Mutual Inc. secured $7 billion in new capital Tuesday, an injection that is aimed at reviving the company despite ballooning loan losses but which may also push it to rethink its strategy, slim down and revamp the management.

The article goes on to say that the bank is getting out of the wholesale lending business and laying off 3,000 workers.

So let me get this straight, the proper course of action when dealing with an institution that has blown billions of dollars is to lend it billions of more dollars.

Remember when conservatives used to stand for personal responsibility?

"No Botox For You"

http://www.latimes.com/features/health/la-na-plastic5apr05,1,110612.story

Yes, sadly it is true. People in California are getting uglier because of the housing crisis. Literally uglier:

The sub-prime loan crisis, the housing slump and the general decline of the economy have claimed another covey of victims. Anthony is in the real estate business, and under current conditions, the cosmetic treatments -- at $1,800 or more a pop -- can no longer be squeezed into her budget.

"I would rather have Botox than go out to dinner, but it's just gotten so bad," said Anthony, 41, who is looking for a job since her career in the mortgage business went sour. She has not had the facial treatments in months.


I swear, sometimes you don't know whether you're reading the real news or The Onion.

War Profiteer Airline Shuts Down

http://www.nytimes.com/2008/04/03/business/03cnd-ata.html

You probably know by now that yesterday ATA airlines became the second major American airline to shut down in less than a week. What you might not know is the company's stated reason for going bankrupt:

ATA blamed the shutdown on the loss of a contract for its military charter business.

So in other words, without subsidies from big daddy government's war machine, this little capitalist's darling was unable to survive. Just imagine the ripple effect when America is FORCED by economic reality to begin withdrawing from Iraq next year.