Bethesda's OWL HOUSE VS Joburg's JUNK HOUSE

Company earnings reports imminent - we'll know where we stand in the economy in a few days

The current rally also began with a company announcement. This time, beleaguered and bailed out Citigroup Inc. said March 10 it was profitable for the first two months of the year. The S&P 500 gained 43 points, or 6 percent, that day to 719. The index closed Thursday at 857, and markets were closed on Good Friday.

The S&P could rise more, and even turn positive for 2009, if earnings reports for the first quarter show a strengthening economy. Alcoa, the first big company to report their results each quarter, announced a loss of $497 million on Tuesday evening. But investors were pleased about the aluminum company's efforts to cut expenses by $2 billion a year, and the shares are up 14 percent since.

SHOOT: We'll have a clearer picture of the markets in a few days, and the prognosis is contraction across the board. But as the Citigroup example above shows, the market will clutch at straws in order to rally. If there is a 'recovery' in 2009, it will be temporary, based on artifice, sentiment, wishful thinking and delusion [the same things that propelled markets into hypergrowth over the past decade].

clipped from finance.yahoo.com NEW YORK (AP) -- It's the earnings, stupid. Optimism that the fortunes of financial companies like Citigroup were improving sparked a four-week rally beginning March 10 that drove the Standard & Poor's 500 index up 25 percent. But now investors will find out exactly how companies across all industries performed during the first three months of the year. Those quarterly results will determine whether the surge was the beginning of a bull market, or just a blip. The current rally also began with a company announcement. This time, beleaguered and bailed out Citigroup Inc. said March 10 it was profitable for the first two months of the year. The S&P 500 gained 43 points, or 6 percent, that day to 719. The index closed Thursday at 857, and markets were closed on Good Friday. -- General Electric Co. -- When it will report: Friday, April 17. Intel Corp. -- When it will report: Tuesday, April 14. Johnson & Johnson -- When it will report: Tuesday, April 14 Citigroup Inc. Friday, April 17

First Job Losses in 4 Years Raise Recession Fears

The nation’s employers eliminated 17,000 jobs in January, the government reported Friday, the first decline in the work force in more than four years, and the strongest signal yet that the United States may be in the early stages of a recession.

Politically, the job figures were particularly troubling for the Republican Party and President Bush, who had just this week responded to doubts about the economy by noting in his State of the Union address a 52-month streak of uninterrupted job growth. That streak ended last month.

The broad weakness in the job market, which affected many sectors, shows how the collapse of the housing bubble is rippling through the rest of the economy and suggests the likelihood of more pain for millions of American families in the months ahead from job losses, lower real wages and fewer working hours.

Citing the new jobs report, Mr. Bush — who was in Kansas City, Mo., on the third day of a trip that also took him to California, Nevada and Colorado — acknowledged that it provided “some troubling signs” that the economy was weakening.

By LOUIS UCHITELLE and MICHAEL M. GRYNBAUM
More.

Inflation surge to 8,6% will test Bank’s mettle

SA’s main inflation gauge surged to 8,6% last month, a near five-year peak, but the Reserve Bank is expected to keep interest rates steady when its policy meeting ends today, to help cushion the blow that power shortages will deal to the economy.

The annual rise in inflation measured by CPIX accelerated from 7,9% in November, surpassing forecasts and climbing further above its 3%-6% official target range for the ninth month in a row, Statistics SA said yesterday.

More.

Quote of the Day

"A recession, which was nothing more than a risk scenario six months ago, is now turning into our main scenario," Yamakawa said in a report released Friday.

European Stock Markets Follow Asia Lower

European, Asian Markets Slide on US Recession Fears

LONDON (AP) -- Global market turmoil extended into a second week as European and Asian markets tumbled Monday in the wake of Wall Street's drop on Friday amid persistent worries about a possible U.S. -- and worldwide -- economic slowdown.

"With no market moving news out today, the slide follows on from losses suffered in the U.S. markets at the end of last week and in Asia this morning," said Nathan Miller, a trader at CMC Markets in London.

In Europe, the U.K.'s FTSE dipped 1.9 percent to 5,754.9 around midday. Germany's DAX slipped 1.6 percent while France's CAC 40 declined 2.2 percent.

China's benchmark index plummeted 7.2 percent to its lowest point in six months on concerns that a recession in the U.S. would mean less demand for Chinese-made products.
By Toby Anderson, AP Business Writer

More.

JSE Continues to Dive

Our local bourse is now scraping the bottom of the 25 000 margin barrel. Meanwhile the Fed in the USA has slashed interest rates by a whopping three quarters of a percent in a bid to jump start the US economy (and avoid a recession).

Federal Reserve makes emergency rate cut
World markets continue skid over U.S. woes

Kunstler: Fullbown Panic

"It's nature's way that waves crest just before they break." - James Howard Kunstler

Knees knocked last week from sea to shining sea as the shape-shifting monster of economic reality cut a swathe of destruction through the markets and financial ranks. The exact nature of this giant beast still remained largely concealed in a fog of accounting gambits, policy blusters, and reporting dodges, but a few intrepid scouts who glimpsed the behemoth up close said it looked like Godzilla with Herbert Hoover's face.

George W. Bush, tried to appease the beast by offering each American adult the dollar equivalent of half a month's mortgage payment -- with the exhortation to drive forthwith to the nearest WalMart and blow it on salad shooters and plasma TV's -- but Hooverzilla just laughed at the offering and pounded the equity markets further into the dust of loss, while the "bank-like" guardians of wealth lay in the drainage ditches bleeding from their ears and eyes.

My favorite moment was seeing Treasury Secretary Paulson and one of his fellow shaved-head deputies at a press conference rostrum frantically trying to calm the news media rabble like a couple of extraplanetary high priests from a Star Trek episode -- the batteries having run down in their laser wands, and their incantations ("liquidity! liquidity!) veering into mystifying glossolalia.

I resort to such admitted extreme hyperbole because it may be the only language that an infotainment-drunk society can still process in the face of an epochal calamity that will transform the lush terms of everyday life as we've known it into something like a bleak surrealist landscape in the manner of Tanguy. That crashing sound out there is the armature of confidence needed to support an economy based on faith that borrowed money will be paid back. It's as simple as that. (Doesn't seem so exciting now, does it?)

The United States is so broke, its people at every level from the Federal Reserve on down don't know whether to shit or go blind. The homeowners cringing in the media rooms of their 5000-square-foot personal family resorts don't know how long they can stay put microwaving pepperoni hot pockets with the default clock ticking. The mortgage "servicers" don't know how they will persuade interested parties like, say, the Illinois State Cafeteria Workers' Pension Fund (holder of X-amount of mortgage-backed securities underwritten by, say, Merrill Lynch or Deutsche Bank) to foreclose on properties scattered everywhere from Key West to Bainbridge Island -- or if there is actually any legal mechanism known to man that would make it possible to "work out" the sliced-and-diced collateral.

The millions of maxed-out credit card holders and the issuers of their plastic are stuck together paddling a leaky tub in a sea of troubles every bit as wide, deep, and polluted as the one the mortgage junkies and their enablers are sinking in. The developers of malls, office parks, and power centers are weeping into their filing cabinets as the harsh daylight of insolvency stops the orgy of "consumption" and the retail tenants pack up their unsellable goodies for the liquidators, and the rent checks stop arriving in the mail, and the notes on this mall and that mall enter the eerie realm of "non-performance."

And, of course, there are the genius wonder boyz and Wall Street playerz whose algorithms and turpitudes underwrote the script of this horror show -- for all I know they'll end up laughing into sugary skull drinks on a beach in the Cayman Islands, or doing Chinese fire drills in federal prison (or simply ass-fucked on the granite countertops of their Tribecca aeries by mobs of angry, repossessed, swindled former American dreamers pouring into Manhattan from the tract house dormitories of New Jersey and Long Island).

There's a lot to be concerned about out there. I don't mean to be too cute about it. But, as the master once said, nothing is funnier than unhappiness.

A whole closet full of "other shoes" is now waiting to be dropped. Surely the biggest clodhoppers in the closet belong to the hedge funds, representing trillions and trillions of dollar-denominated "positions" which, however hallucinatory, had previously yielded enough real "money" year-by-year to keep all the realtors and Humvee dealers in the Hamptons goose-stepping to Goldman Sachs's drumbeat. These "positions" can't help now from moving into counterparty crisis territory, especially as the bond insurers such as MBIA and Ambac go up in a vapor, and if that happens the damage could be so colossal globally that Stephen Hawking might have to be brought in to run the Federal Reserve.

This is going to be a rough week. Fastening your seat belts may not be enough for this ride. Better superglue yourselves to the floorboards and pray for God's mercy.

Global markets plunge on U.S. recession fears

Prepare psychologically for a sociopolitical climate of anger, grievance, and resentment. A lot of individual citizens will find themselves short of resources in the years ahead. They will be very ticked off and seek to scapegoat and punish others. The United States is one of the few nations on earth that did not undergo a sociopolitical convulsion in the past hundred years. But despite what we tell ourselves about our specialness, we're not immune to the forces that have driven other societies to extremes. The rise of the Nazis, the Soviet terror, the "cultural revolution," the holocausts and genocides -- these are all things that can happen to any people driven to desperation. - James Kunstler

LONDON (AP) -- European and Asian stock markets plunged Monday following declines on Wall Street last week amid investor pessimism over the U.S. government's stimulus plan to prevent a recession.

The U.K. benchmark FTSE-100 dropped 3.9 percent to 5,673.1; France's CAC-40 Index plunged 4.5 percent to 4,861.2, while Germany's slumped 5.35 percent to 6,922.7.

In Asia, India's benchmark stock index tumbled 7.4 percent, while Hong Kong's blue-chip Hang Seng index plummeted 5.5 percent to 23,818.86, its biggest percentage drop since the Sept. 11, 2001, terror attacks.

Investors dumped shares because they were skeptical that an economic stimulus plan President George W. Bush announced Friday would shore up the economy that has been battered by problems in its housing and credit markets. The plan, which requires approval by Congress, calls for about $145 billion worth of tax relief to encourage consumer spending.

"We've taken our lead from the Asian markets who have not been impressed by the U.S. There's debate if there's going to be a recession in the U.S. I don't think there's much chance of that though," said Richard Hunter, an analyst at Hargreaves Lansdown Stockbrokers Ltd. in London.

Concerns about the outlook for the U.S. economy, a major export market for Asian companies, has sent the region's markets sliding in 2008. Just last Wednesday, the Hang Seng index sank 5.4 percent.

"It's another horrible day," said Francis Lun, a general manager at Fulbright Securities in Hong Kong. "Today it's because of disappointment that the U.S. stimulus (package) is too little, too late and investors feel it won't help the economy recover."

NVDL: It's starting... Well, it's starting to manifest. It really started a long way down the track, and now Nature is shaking its big fist in our faces and we're going: Oh. Oh I get it.

Here are more suggestions from James Kunstler:

Here's what we better start doing.
Stop all highway-building altogether. Instead, direct public money into repairing railroad rights-of-way. Put together public-private partnerships for running passenger rail between American cities and towns in between. If Amtrak is unacceptable, get rid of it and set up a new management system. At the same time, begin planning comprehensive regional light-rail and streetcar operations.

End subsidies to agribusiness and instead direct dollar support to small-scale farmers, using the existing regional networks of organic farming associations to target the aid. (This includes ending subsidies for the ethanol program.)

Begin planning and construction of waterfront and harbor facilities for commerce: piers, warehouses, ship-and-boatyards, and accommodations for sailors. This is especially important along the Ohio-Mississippi system and the Great Lakes.

In cities and towns, change regulations that mandate the accommodation of cars. Direct all new development to the finest grain, scaled to walkability. This essentially means making the individual building lot the basic increment of redevelopment, not multi-acre "projects." Get rid of any parking requirements for property development. Institute "locational taxation" based on proximity to the center of town and not on the size, character, or putative value of the building itself. Put in effect a ban on buildings in excess of seven stories. Begin planning for district or neighborhood heating installations and solar, wind, and hydro-electric generation wherever possible on a small-scale network basis.

We'd better begin a public debate about whether it is feasible or desirable to construct any new nuclear power plants. If there are good reasons to go forward with nuclear, and a consensus about the risks and benefits, we need to establish it quickly. There may be no other way to keep the lights on in America after 2020.

We need to prepare for the end of the global economic relations that have characterized the final blow-off of the cheap energy era. The world is about to become wider again as nations get desperate over energy resources. This desperation is certain to generate conflict. We'll have to make things in this country again, or we won't have the most rudimentary household products.

We'd better prepare psychologically to downscale all institutions, including government, schools and colleges, corporations, and hospitals. All the centralizing tendencies and gigantification of the past half-century will have to be reversed. Government will be starved for revenue and impotent at the higher scale. The centralized high schools all over the nation will prove to be our most frustrating mis-investment. We will probably have to replace them with some form of home-schooling that is allowed to aggregate into neighborhood units. A lot of colleges, public and private, will fail as higher ed ceases to be a "consumer" activity. Corporations scaled to operate globally are not going to make it. This includes probably all national chain "big box" operations. It will have to be replaced by small local and regional business. We'll have to reopen many of the small town hospitals that were shuttered in recent years, and open many new local clinic-style health-care operations as part of the greater reform of American medicine.

Take a time-out from legal immigration and get serious about enforcing the laws about illegal immigration. Stop lying to ourselves and stop using semantic ruses like calling illegal immigrants "undocumented."

Prepare psychologically for the destruction of a lot of fictitious "wealth" -- and allow instruments and institutions based on fictitious wealth to fail, instead of attempting to keep them propped up on credit life-support. Like any other thing in our national life, finance has to return to a scale that is consistent with our circumstances -- i.e., what reality will allow. That process is underway, anyway, whether the public is prepared for it or not. We will soon hear the sound of banks crashing all over the place. Get out of their way, if you can.

Crash? JSE down to 25714.630

It's not yet noon and the JSE is down 3.52% on low levels. R/$ rate is 7.16 which impacts on how affordable oil is for us. There is a confluence of events at work domestically, including the perception overseas of South Africa's energy problems (Manuel has been one voice of sanity though, saying: let's call it what it is - it's not load shedding but rolling blackouts).

The subprime woes overseas and the perception that the US is now on track for a recession - something that I have suggested on the cards for a few years now - is finally happening.

Oil prices are receding as demand recedes, but obviously demand remains fairly inelastic. Expect more bad news, and then for it to go from bad to worse. This is simply Peak Oil theory at work, not pessimism. It's reality, and unfortunately we will begin to realise that we cannot grow forever, we never could.

JSE sharply lower on global fears

GM, Ford December sales declines confirm US recession – sales lowest since 1998

The catastrophic lower sales in December from GM and Ford points to sharply lower economic growth. The Government figures point to slow growth but no recession. But in reality the matter is much worse in the main streets.

Deliveries dropped about 6.3 percent at GM, 8.4 percent at Ford and 9.8 percent at Chrysler LLC, based on the market expectation and analyst surveys. The Japanese car companies also registered slower growth. The trend supports the foreign car makers but the recession is challenging everyone.

Federal Reserve will lower rates sharply in early 2008. But that may not help the automakers specially GM and Ford. The credit squeeze makes it very difficult for any one with less than perfect credit.

Americans bought about 16.1 million cars and trucks for the year, the least since 1998. That is significant, say most analysts. All three of Japan's biggest automakers will probably report declines for December while collectively gaining market share. That further confirms tightening recession in US.

From The India Daily

Political strife ’not cause of JSE jitters’

THE local stock market’s nasty drop yesterday morning, which had the JSE all share index down more than 2% in intraday trade, raised concerns that political events were souring the financial climate, but analysts felt the outcome of the African National Congress conference had already been priced in.

“I think the political events have been priced in for some time,” chief investment officer at Cannon Asset Managers Adrian Saville said. “The weak markets of Friday, after our close, and yesterday had to be brought in.”

This meant yesterday’s disastrous drops had more to do with global financial woes. On Monday, European, US and UK stock markets fell heavily over concerns about a slowdown in the US economy. Yesterday this caused copper prices to be chopped to a nine-month low while aluminium hit a nine-week low — both events hurt the stock prices of large-scale producers of these metals, Anglo American and BHP Billiton.
More.

NVDL: Maybe. Not sure if I buy this. I think the market here would have us believe there is no connection, because everyone would like to believe Zuma won't be bad for business. Obviously there is some connection, and jeepers, the JSE has nosedived to 27830. A few days ago the JSE was edging 31 000. I guess time will tell, but whatever Zuma does, I'd predict the markets to start coming to grips with the inflationary/recessionary effects stemming from the motoring mad USA.

10 businesses facing extinction in 10 years

Determining which industries aren't long for this world may seem easy enough. But some types of businesses, such as telemarketing, are surprisingly hard to kill.
And then again, other industries, probably the ones you're sad to see go, can't find a way to survive.
So start setting up your office pool, because here are our picks for 10 businesses facing extinction in 10 years.

From Entrepreneur.com
By Geoff Williams

Record stores

Record stores are closing in, well, record numbers. One of the most prominent music retailers, Tower Records, shut down all 89 stores last year after concluding it couldn't withstand the onslaught of online music stores and chains like Wal-Mart, which can offer lower prices and sell other items to offset the smaller number of CDs being sold.

Odds of survival in 10 years: Great, if you consider Wal-Mart a record store.

Camera film manufacturing

This probably isn't the best business to get into right now. According to The Chicago Tribune, from May 2006 to May 2007, the volume of prints made from digital cameras grew by 34 percent. Film camera sales, meanwhile, fell by 49 percent, while digital cameras sales continued to grow — by 5 percent. Of American internet users, 70 percent own a digital camera; another survey shows that 70 percent of Canadians now use a digital camera. Odds of survival in 10 years: Some entrepreneurs who specialize in making camera film for amateur photographers could possibly make a living.

Crop dusters

They'll be around in 10 years, but likely not in their present form. The average age of the typical crop duster is 60, the number of crop dusters is dwindling, and the profession can be dangerous. Just several weeks ago, an Arkansas crop dusting company was ordered to stop flying in Iowa after spraying farm workers with a fungicide; 36 farm hands in a cornfield had to be decontaminated by a hazardous materials crew.

Odds of survival in 10 years: The type of crop dusting plane that chased after Cary Grant in "North by Northwest" will have almost certainly gone south. Farmers say that they'll always need crop dusters, even though new technologies have made them less important than in the past. But commercial airlines are increasingly taking business away from the small, independent crop dusters.

Gay bars

As The Orlando Sentinel noted in a recent article, around the country gay bars have been going out of business as gay men and women have been gaining greater acceptance in society. What used to be a hangout for people who felt unwelcome elsewhere is becoming less necessary.

Odds of survival in 10 years: As with many industries, the very best of them will endure; the rest won't.

Newspapers

Some people thought they were through when radio and TV news came about. Even after the fax machine revolutionized offices, some people predicted that everyone would have their news faxed in, since that would be quicker than relying on a newspaper. But the numbers have been falling precipitously since the 1990s when the internet came on the scene. In the past year, the Audit Bureau of Circulations twice has posted drops averaging 2.1 and 2.8 percent over six-month periods. Newsrooms across the country have been hemorrhaging staff.

Odds of survival in 10 years: They won't disappear; they'll be on the internet. We don't recommend startups investing a lot of money into a printing press plant.

Pay phones

In 1997, there were more than 2 million pay phones in the U.S.; now there are approximately half as many. There are probably always going to be certain places like airports and hotels that offer pay phones, as long as there are people who don't own or can't afford cell phones. Because phone kiosks on the streets are a favorite for drug dealers, who don't want to have their own numbers tapped and tracked, cities are shedding them.

Odds of survival in 10 years: They'll be around, but won't be anything to call home about.

Used bookstores

They've been closing fast, and those that are still open are relying on what's making them obsolete: the internet. A used bookstore used to be the place to find that beloved, out-of-print children's book you used to read 17 times a day until your little sister flushed it down the toilet. Now you just type that title in a search engine and order it within minutes. Odds of survival in 10 years: Some of them will still be eking out an existence, but the handwriting is on the wall.
Piggy banksYou may chuckle, but as we continue gravitating toward a paperless society, it's not difficult to imagine a day when piggy banks no longer exist.

Odds of survival in 10 years: Sure, they'll probably still be a few around — in antique shops.

Telemarketing

The good news for people who hate telemarketing calls is that the industry may finally be dying; the bad news is that it may take a while. Telemarketing has been hit hard by the national Do-Not Call list that was established five years ago, and sales have been stagnant, but the industry still managed to bring in $393 billion in revenue last year. Some of this is due to clever marketing. This includes holding raffles at shopping malls; when you sign your information, you agree to accept calls from the company running the contest and its partners. Cell phones are exempt from automated telemarketing calls, but not from individuals calling. Then there are occasional windows of opportunity: The national Do-Not Call list is set to expire in 2008, unless you remember to register again.

Odds of survival in 10 years: They'll be here. Humbled, more impotent, but probably still here.

Coin-operated arcades

With Nintendo Wii, casual gaming online and the Xbox 360, the video game arcade industry is thriving, but not the standalone brick-and-mortar arcades. For those of you who thought arcades were already dead, they still exist — at movie theaters, miniature golf courses and other touristy spots — but it seems only a matter of time before they vanish from the landscape. Ten years ago, there were 10,000 arcades in the nation, and now the number is close to 3,000, according to the American Amusement Machine Association. Revenue from arcade game units brought in $866 million last year, which sounds good until you consider that in 1994, the industry was pocketing $2.3 billion and that the profits are only still high because it costs so much to play a game.

Odds of survival in 10 years: Game over.

NVDL: The grass can't stay green forever. Interesting on this list are newspapers, record stores and gay bars. Not sure if I agree with the crop duster idea. If you buy into the philosophy that the world is about to unflatten, unshrink, become far larger, we'll see the end of a lot of industries: the hypermarket, parking lots, malls, drive thru, fast food, airline alliances like Star, the convenience store at a gas station etc.

We'll see a return of cottage industries like the butcher, the baker and the candlestickmaker. We'll also see the demassification of schools, from the current prison lookalikes, to private and home tutoring and also smaller, friendlier, more community integrated buildings.

Recession Too Mild A Word

By Pablo Ouziel

Yet yesterday in Crain's New York Business this could be read: "Only weeks after financial-sector employment in the city hit levels not seen since the technology-stock bubble, investment banks have switched into firing mode and halted most job searches ...

As a result, at least 10,000 Wall Streeters of all stripes could lose their jobs by year's end, according to estimates from Manhattan recruiting and consulting firm Options Group."

For the rest of this Ohmynews article, click here.

Oil now $81-a-barrel

Earlier this morning I was contemplating this question: through which medium (or channel) does news travel the fastest. I've been inclined to think it's radio. After all, the speed of sound can be trasmitted and re-transmitted with a minimum of infrastructure and bandwidth (and total energy costs). Sure the speed of light is quick, but it also takes time to set up images + voiceovers, and in terms of the internet, it takes a while to set up a search and then to read. Thus radio comes up trumps. Makes sense then to add top news stories in an audio stream on especially NEWSY sites, doesn't it?

It's probably a close race though, but it's staggering that this news, which is of vital importance to the planet, is 2 hours old. Earlier this morning we all stood around the big screen TV in breathless anticipation of a McCann revelation. Now that's news!

Meanwhile from the Belfast Telegraph (of all places - not CNN):

Oil prices have hit a new high in New York overnight due to concerns that rising demand during the winter could squeeze supplies. The price has hit $81-a-barrel and experts are predicting that it could rise even further to $85 or $90 before the end of the year. The surge comes despite OPEC's promise to pump an extra 500,000 barrels per day from November.

NVDL: Notice the converging catastrophes...expensive food, expensive fuel, credit crunch (that no one is taking seriously), shit kicking weather, fires floods and all the rest. We need to take a breather and get back to Nature, and what we're really supposed to be doing with our time and our lives.

The OPEC Con

The reality is that output cannot be raised. World global supplies have been at maximum for some time, and we've seen a gradual downward slide in supply and capacity. Can you imagine the worldwide fallout (and catastrophe) were it to leak out that this was the case? That worldwide demand is now greater than supply (and this trend will worsen over time)?

The result will be runaway prices, or recession, or both.
Opec's saying they will raise output by November is a bit like a weatherman promising cooler temperatures in winter. It's likely to happen anyway (since the global demand curve for fuel is at its lowest in November).

From BBC.com:
Opec agrees to raise oil output

Opec controls more than a third of global oil suppliesOpec members have agreed to increase oil production by 500,000 barrels a day to meet concerns about rising demand.
The 12-nation oil producers' cartel agreed to support a proposal from influential member Saudi Arabia to raise daily production from 1 November.

Oil prices have been touching record highs on fears of a growing imbalance between supply and demand. But despite Opec's decision US light crude settled at a record closing price of $78.23, up 74 cents.