Required reading, and some other stuff

With a lot of people going on about "GREEN SHOTS" and a recovery in the financial industry, please read the following article by Karl Denninger which pretty much sums up the situation.

If you can't be bothered to read it, please just take this advice - exit the stock market you're in, NOW. There's no point playing in a rigged game.

On a side note, this might be one of the funniest things I've seen in a while:


until next time, be well

If you read anything today...

...read this, required reading for anyone interested in a) the economical collapse, b) their own strategies for the future and c) getting themselves fired up with righteous anger a little bit. Read Karl Denningers ticker from yesterday here.

Hedge your positions, plan for the future. Be safe.

Quite right

Mish Shedlock puts it to us quite nicely in his latest blogpost. "...the current generation now in high school is likely going to be the first generation in America's history with a lower standard of living than their parents for quite some time to come."

Please have a read. Over in other areas the situation might be worse, or better. Still, it's going to be a new brave world, and you'd best better prepare.

Down, down, down....

Buy and hold, the callsign for generations of investors who couldn't be bothered with the day-to-day trade of stocks, futures, bonds etc, is definitely not the thing anymore.

Everyone, from Warren Buffett to my mother, is saying that this recession is going to last, last and last some more. This is what the ones I believe in - Mish Shedlock, Karl Denninger, Barry Ritholz et al - have been saying for the last 2 years as well.

Well, here we are. With the dismal news of the biggest banks in the US and their economic state of affairs coming out late last week, the Asian markets are at this moment some 3-4% down, Europe is opening in the red and I do not believe the bailouts of AIG and the banks by the US government will do much to help US confidence and the Dow Jones later on today.

We're looking at a stock market that has lost more than 50% of it's value in 1½ years. It's going to lose a lot more. the S%P 500 is projected to land at about 250, from the 700+ it's now on. If you have stocks, either you're in for the LOOOOOOONG haul (2015-16 or something) or you should cut your losses now.

These are interesting times. I do hope we'll all get out unscatched in the end - singed, but not burnt, hopefully. Although I'm not betting on it. The last time the outlooks were this bleak, a chap named Adolf saw hos opportunity...

Some stuff about the global economic crisis

Today, Monday, Geithner of the US Treasury will put forth the "rescue plan" that will "save the US economy". Problem is, there really is no way to save the economy - not as such an economy as it has been for the past 20 years at least.

This housing based credit bubble has been the largest credit bubble ever. The crash in the economy will therefore be, and actually IS already, the largest crash ever. To try to prop it all up with hundreds of billions of US taxpayer money is just plain silly.

The reason I'm interested - and you too should be interested - is that the theory of decoupling (the theory that it doesn't matter what happens in the US, the rest of the world will continue to trade with each other or internally and will not be affected) has been proven utterly wrong. Everything is connected, and the better I, and YOU, know the real deal, the better we can prepare for what will come.

Here are some links to my favourite pages to keep track of what's happening. Have a look, have a loooong good read, and make your choice.

Ticker Forum, Mish's Pages, The Big Picture, Calculated Risk.

Dear me...

... if China is really going to devalue their currency by 30-35%, the shit will hit the fan, and not in a good way. We could see all manners of odd behaviour - new tolls, trade wars, massive unemployment, the works.

On one hand I just can't imagine what the world will look like in 12 months time. On the other, I'm convinced it's inevitable, and may turn out to be a good thing in the end. So, buckle up everyone, we're in for a bumpy ride. And to friends and relatives in the US - hope you'll be OK. If not, cosy on over here to Finland, at least we've got enormous amounts of wood, so heating should be no prob :)

G-20 accomplishes.... not very much

So, this weekend saw the leaders of the "free" world get together for some nice snacks, a great dinner and some fabulous wine to go with all that.

At the same time the world was eagerly anticipating news from said gettogether, news that would right the wrongs of todays financial market, news that would point towards a better, more viable future for all mankind. Perhaps not news that would taste really good right now, but news that would show that the leaders understood what was happening, and furthermore cared about the hundreds of millions of people who had appointed them leaders.

Well, it was not to be. News? What bloody news? Everything is fine, stop complaining, instead be content - that was the message from the G-20 meeting. For a much better take on it than I can master, go to this blog.

So - looks like we're going down, all of us. And something tells me that the leaders leading us towards the abyss will jump off the bandwagon at some point, cheerily waving the rest of us goodbye.

Formats and the economical collapse - what will survive?

I don't think anyone hasn't noticed we're heading for a bit of a bump in the road of free market capitalism. And, to be frank, it's not a bump, it's more like the bloody Himalayas and no one knows HOW we're going to get over them and WHAT will lay ahead on the other side of them.

For the television format business, of special interest to me, there should be interesting times ahead. On one hand, we have people saying that as viewers can't afford to travel or have expensive hobbies anymore, television offers a lot of bang for the buck and as such will gain from the economical strain. On the other hand, we have people saying that everyone will have to cut back on everything, and that tv channels will not want to go for anything without a proven track record anymore.

C21 Media has a good take on the situation, pointing out - amongst other things - that MIPCOM this year was more about library sales than production or format deals. At the same time many channels are pushing forward expensive drama to 2010, going for cheaper format-style or factual stuff.

Read it, and be prepared. I'll try to, at least :)

Credit crunch biting the entertainment industry as well

I saw an interview by C21 Media from MIPCOM, which took place in Cannes in October (it's a large television industry fair, basically) where people were sitting saying that "in dire times people turn to television, as it's a lot of entertainment for little money". So everything should be looking nice and rosy for the tv-industry, right?

Well, not quite. Today Disney, for example, announced a drop in earning of 13% in the 3rd quarter of 2008. Not to worry, they're still making an obscene amount of money, but declining they are. The German broadcaster ProSieben Sat is planning to introduce cost-cutting measures, to counter faltering ad-sales and problems caused by the global economic decline.

If anyone has read what Karl Denninger says over at Ticker Forum, or what someone like Peter Schiff has been saying for quite some time, you know that this is not going to be just a bump in the road. The US debt is so massive, only a thorough cleansing action can be of any help whatsoever. An such an action will bring a lot of pain - that's just the way it is.

Bottom line is I don't think anyone or anything can avoid being influenced by the global economic situation. Best we can do is prepare and be ready. And eat lots.

The end of the world as we know it?

So, today should be the day when it all goes to hell. The end of the capitalist world as we've come to know and love (or hate) for the past decades.

Nikkei is down, Finland is down, Hong Kong is down 12%.. and as it is not only the stock markets that are in trouble, it's the very life we are living, we will be in for some major changes.

In a way I'm happy. We should get back to basics, to communities, to REAL LIFE goddamit.

In the meanwhile, read the excellent Karl Denningers take on it all from last Saturday. Whomever is elected president of the US should hold the responsible parties RESPONSIBLE! Favourite quote: "A capitalist society is one in which those who make bad decisions fail and go bankrupt, not one in which those who fail are rescued by taxpayer money."

Tin foil hat on, seat belts fastened... here we go!