Tuesday, January 08, 2008
"This is the end -- this is the end, my friend," sang old Jim Morrison of the Doors, and a great economist he was too.
Today the stock market looked like a crackhead on opium. Check it out.
It's been looking that way for a while. Every day there's a different reason. Today it's "worries about Countrywide, AT&T." Yeah, lots of people are losing their jobs, like my ex-wife lost hers with an insurance agency, and lots of the accounts they were insuring were these local construction oufits, and, well...you know the rest. And it's that way at a lot of insurance agencies that used to insure these house builders and to lots of furniture stores that used to sell stuff to house buyers and lots of furniture makers, and on and on.
It's because making houses and strip malls is about the only industry that's grown in the last 30 years. The rest have gone overseas through outsourcing or shut down or got put out of business by foreign competition. Now that building houses and strip malls has gone under, what is there to keep the ship afloat?
While the stock market and the dollar are going down, unemployment and the price of gas are going up, and the price of gas going up means [i]all[/i] prices will be going up. We're catching it from both directions. Plus credit is drying up. There's very little money out there.
It's pretty scary. You know, there were some of us who have been telling the "experts" for years that this was going to happen, because the housing mania, along with dangerous innovations in the totally unregulated mortgage-lending sector of the "financial industry," was an obviously dangerous bubble for years, and because oil production is now past peak and prices will inevitably rise. You don't have to be Einstein or anything to figure it out.