Forget everyone who's been talking about when the recovery'll start; we're just about to take the big dive....
Wonks everywhere have been panicking about the Baltic Dry Index, which represents the amount of good being shipped in containers over the seas. As this article mentions, global orders are down precipitously (Volvo's YoY truck orders are down 99.6% from 41,970 to 155!). With no-one buying goods, who needs employees? Retail's gonna get creamed; demand for short-term commercial loans will skyrocket to cover the fact that no-one's buying, and demand for retail loans will plummet. Visa(V) has already taken it in the proverbial shorts (pun intended), but all those banks who've been using the projected proceeds from usurious lending rates will find themselves in deem kim-chee.
Pension funds are also in big trouble:1,2,3,4,5,6, and CalPERS, for locals.
Like I said, hang onto your hats, 'cuz it's gonna be scary.
11 comments:
Time to invest in T Bills. Or Savings bonds.
And I think I keep on collecting the junk silver that I started on a while back...
That's... horrific, actually. No wonder oil's plummeting. This literally means parked container ships.
I think T-Bills and Savings Bonds are going to be worthless too, since the huge running of the presses will make those of lesser value due to inflation, or, there will be doubt that the US government will make good on all of those debts.
Savings bonds are a funny one - up until 2003 I used to buy them regularly as a potential long term investment, then in 04 the US treasury deliberately made savings bonds a bad investment - put the payoff date out to 15-20 years instead of 10-12, and did some other cruddy things to it including insisting that all bonds had to be bought and stored electronically - you couldn't get the paper ones any more meaning you could only cash in the electronic ones when the government allowed you to. I stopped buying them after that.
Jimdesu can correct me if I'm wrong, but, I don't think there are ANY good investments right now.
I take that back about no good investments. You could probably at least get 2-3% if you find a solid credit union or small conservative bank that has CDs or small money market funds.
I'm not quite so pessimistic, but, that said, I don't own a single stock either.
I'd be happy to have a share of Berkshire Hathaway, but since I can't afford that my 401(k) is spread across a ton of corporate bonds (and losing value daily -- but, in the case of bankruptcy may get a few cents on the dollar back from the company's hard assets).
I'm much more concerned, though about the present situation than the retirement one, esp. as I have very little savings, and nor do many others.
Eww, I didn't know you can't get the paper ones anymore. I don't like doing stuff like that only on electrons. Mutuals are okay, but I want the savings bond in my hand (actually my safe).
Guess its silver then.
Of course, part of this is your "look". Are you trying to cash this in the next 5 to 10 years? Okay, problems. But what if you are getting bonds and are planning not cash them until the 30 year mark? Odds are you won't be in a bad position.
The other problem with EE series savings bonds it that the treasury reserves the right to change the time to maturity of the bond. So its 15-20 years now, could be 30-50 later on. Of course, that was the rules created in this administration, so to make this type of US debt palatable again, the terms could change. The terms also get complicated with some of the other series bonds and T-Bills.
You are very right about your outlook on the investment. But at the anemic interest rates provided by a US savings bond, you would be better off with a CD at a solid bank or credit union. Then again - I think that's the point of this discussion - what is a safe investment where your money can grow either short or long-term? It certainly isn't my mutual fund that I set up for my kids education (doing poorly right now) and it isn't my 401k, so at the moment that leaves my savings account at the local credit union.
Well, the BDIY technically represents the cost of shipping goods, and while we can summarize that the volume has reduced drastically, we should take into account the dropping energy prices as well. Looking back a few years to 2004 I have to agree that volume has dropped to at least half using my ultra-sensitive thumb detector :-)
That said - holy crap that's a huge drop!
I don't know if this guy's credible - but an alternative theory on this drop is here: http://www.hellenicshippingnews.com/index.php?option=com_content&task=view&id=22697&Itemid=79
Cripes, its times like this that I do sort of wish I lived in a different time and could chuck all of this and go loot some Aztecs.
Yeah....
As my company's CEO said today (overheard in the restroom) "A woman was asking me if there's going to be a recession, and I asked her, 'well, are you sitting around the kitchen table talking about having less Christmas gifts this year? That's a recession.'"
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