Thursday, January 28, 2016

Crystal Ball Time???

I can't tell future events. I don't know the future. And I don't know the meaning of things I am seeing. I subscribe to the Wall Street Journal 10 Point and the Morning Editorial Report. I watch interviews on the Keiser Report on Etc. I have seen numerous things over time. But in the last two or three weeks, I seem to be seeing a lot more interesting things.

On 12 January, RBS warns to sell everything. They are warning of a fairly cataclysmic year ahead. They were urging a return of capital, not a return on capital. They are expecting a world economy similar to 2008. They gave it a 75% probability. The world has way too much debt to grow well. Technology and automation may wipe out half of all jobs in developed countries. Equities may fall up to 20%. They see a lot of similarities between now and and the run-up to the 2008 financial crisis. In the same article, three of America's largest banks have delayed a forecast for Bank of England rate rise. Morgan Stanley expects oil prices to drop up to 25% more if our dollar continues to strengthen.Standard and Poor's has more companies with a negative outlook than at any time since the 2008 crisis.

Thursday, January 14, 2016
Railroad traffic for the week ending 9 January was down 3.7% from last year. Carloads were down 13.5% and intermodal was up 7.5%. Over the past four years alone, CSX’s coal revenues have declined $1.4 billion.

Thursday, January 14, 2016

CSX is facing “continued industrial challenges,” according to Jason Seidl. He says intermodal will be forced to reckon with soft truckload rates. A strong U.S. dollar and global economic softness is likely to continue to weigh on demand for U.S. steel and export coal and grain. Low natural gas prices and elevated inventory stockpiles of coal could pressure domestic coal demand further, and low energy prices continue to hurt crude-by-rail economics. On the intermodal front, low diesel prices and abundant truckload capacity should slow conversion from the highway, and international intermodal remains challenged.

The Wall Street Journal Jan. 6, 2016.

Lack of demand for hauling freight curbs big-rig purchases. There is a near record number of trucks on dealer lots and truck manufacturers are laying off thousands each. And it goes down the supply chain. Heavy-duty truck orders plunged nearly 37% in December from the same month last year. Truck sales are expected to be down by up to 15%, with corresponding job losses.

The Wall Street Journal 01/15/2016
J.P. Morgan said some of the bank’s lending businesses are “obviously” going to get worse. They have built up a reservefor bad loans, a shift that spotlights Wall Street’s mounting concerns about the fate of oil and gas companies. Worries among investors and policy makers are also mounting over whether the U.S. economy and financial markets can remain upright while so much of the world teeters.

The Wall Street Journal
The IMF once again cut its global outlook for the world economy.

The Wall Street Journal 01/14/2016
Dow Jones Industrial Average down almost 10% from its highs of late last year. Traders said declines were fueled by fresh concerns that a U.S. economic expansion that is almost seven years old is vulnerable to softening growth overseas.

The Wall Street Journal 01/12/2016

Bankruptcy is looming closer for a significant chunk of the U.S. oil industry. Three major investment banks now expect the price of oil to dip into $20 territory in short order as a result of China’s slowdown, the U.S. dollar’s appreciation and the fact that drillers won’t quit pumping. Energy companies that took on huge debt loads to finance their slice of the U.S. drilling boom have no choice but to keep pumping in order to generate revenue to service their debt.

The Wall Street Journal 01/12/2016

The American economy has a jobs problem. Robert Doar writes that “one likely reason for the dismal labor-force participation is that many U.S. assistance programs act more like work replacements than work supports.” Mr. Doar, former commissioner of the New York City Human Resources Administration, cites research showing that “in response to the recession, several U.S. safety-net programs changed in ways that discouraged employment. Unemployment insurance, for example, was made more generous in multiple ways. Eligibility rules for food stamps were reduced, waivers from work requirements were granted, and the monthly benefit amount was increased.”

Wal-Mart: Retail Chain to Close 269 Stores, Eliminating 16,000 Jobs The decision to close the stores is "necessary to keep the company strong and positioned for the future," Wal-Mart CEO Doug McMillon said in an announcement Friday.

Gerard Baker, WSJ 01/20/2016

As global stocks resume their recent selloff, robust growth no longer seems around the corner for the U.S.

The Wall Street Journal Jan. 19, 2016

After 7 years of slow growth,the sees more of the same.We have waited a long time for the U.S. to shake off its post recession hangover. Robust growth often seemed right around the corner—maybe next quarter, maybe next year. Not anymore. Most Federal Reserve policy makers and private forecasters are giving up on the long-awaited breakout.

The Wall Street Journal Jan. 19, 2016

2015 delivered some of the worst annual losses since 2008. In the U.S., the Dow Jones Industrial Average and the S&P 500 have fallen roughly 8% so far in 2016 and are now in correction.

The Wall Street Journal Jan. 19, 2016

The biggest U.S. health insurer said it is expecting losses of more than $500 million on its 2016 ACA plans.

The Wall Street Journal Jan. 19, 2016
“If any country can withstand the tidal wave of default that’s coming from overseas, the U.S. is that country.” Whatever that is referring to!?

This is not an “official” source. This is from Harry Flashmans blog(http://). More correctly, from a guest writer on his blog: Captain Crunch. This came in during this splurge of articles I came across. It is dated Saturday, January 16, 2016. He brings up some great points. He talks of construction companies and oil companies leasing portable office buildings for job sites. He says in Texas, the portable office business has “dropped, or almost shutdown”. A large part of this is the oil industry slowdown. Contractors and subcontractors and their subcontractors, etc. not working. Fewer new wells. This all goes back to fewer people to lease them, to build them, to transport them, etc. This would carry over to other parts of the oil industry slowing down or shutting down. And, therefore, fewer jobs. I don't know how much truth is here, but this goes along with what I have been hearing and reading about the oil industry getting hit with low oil prices and having trouble making their loan payments. I haven't heard this on the “news”. This could as well be the Dakotas, Oklahoma, or whatever oil fields. With the coal industry slow down, I am sure it would apply there. Any place that home or office building is slowing down would display the same thing. Portable office buildings are widely used.
He cites an unconfirmed report of 30,000 mobile home repo's. Probably mainly related to the oil industry. Could any of these be portable office buildings? I don't know. I haven't seen this reported anywhere else. Maybe someone from this or a neighboring area could leave us a comment clarifying this info.

In the comments, Charlie Mitchell writes on January 17, 2016 at 8:53 AM “I'm in the oil business (exploration) and our company has laid off maybe 20% of our people and docked several ships. Who knows - I could be gone tomorrow. This is BY FAR the worst oil-related downturn of the 3 or 4 that I have ridden out in the past almost 30 years.”

In the comments, Tim writes on January 17, 2016 at 2:20 PM “Here in Hampton Roads Virginia things do not bode well. General Dynamics NASSCO-Norfolk shipyard has warned its employees of pending layoffs. BAE Systems Norfolk announces 650 layoffs and Newport News Shipyard to lay off more than 1,500. These are all good blue collar jobs and those families depend on those paychecks.” (Back to me.) I have read of many layoffs nationwide. Above mentions, many thousands in the truck manufacturing business and wal-mart being laid off.

I have heard Max Keiser on talking of the financial problems coming for the oil industry for some time. His predictions seem to be coming true. (Note: Max is not for everyone. He is weird!!!? But, when you get past “him”, he does have some good info and insight! But you do have to get past “him”! He is on three times a week for a half hour each.)

Last week or the week before, he had the editor or publisher or whatever from the Wall Street Examiner on. They were talking about the people in the know got out of the market a year ago. Us chumps are the ones still in the market. (Episode 861 has “In the second half, Max interviews Lee Adler of about distribution taking place in the stock market and why the IPO of Saudi Aramco could pull even more cash out of the economy.” I think Lee Adler was on for two episodes: this one and the one before or the one after this one.)

In conclusion: I see flashes of “the sky is falling”, “the little boy who cried wolf”, the y2k bug, and many other hysterias. My crystal ball just isn't working today. I can't even say there is a link between these articles or if I interpreted them correctly. Are we in a boom or bust cycle? I just don't know. As for me and my house (I heard that from a smart man), we will just do the best we can to be prepared. No matter what comes down the pike.

May God bless you and give you wisdom and insight.

Ralph and Fiona


  1. I like Max...he knows his stuff. The Feds and world banks are heading towards a cashless society for total control. Too much debt to be sustainable. So, do what you do and be as self sufficient as possible and keep the faith. We are in for a rough ride.

    1. Max does know his "Stuff", we have heard him forecast things and his forecasts are accurate an awful lot of the time! I guess what Ralph and I don't quite understand is how the Powers that be continue to say we have a healthy economy and things are safe Tewshooz and God Bless

    2. The powers that be are lying to us to keep us ignorant as to the fall that is coming. They do not have our welfare at heart....only theirs. Total power, total control and for that they must keep us asleep. The UN is planning to take over with a one world govt. Deposits in banks are no longer considered your money, but rather capitol they can use to pay their debts. Remember what happened in Greece last year? Those people were unaware too. Keep as little cash in the bank as possible.

    3. What Tewshooz said.

      The powers that be think they're preventing "panic" by keeping us in the dark. IOW, they are just trying to manipulate the outcome in their favor.

  2. My husband is a truck driver and he has noticed some things over the past several years. One is that most of the big retailers now keep their distribution centers barricaded and guarded like it was fort knox. They have strict security measures for anyone going in or out. Can't help but wonder, why? At some places they take the drivers' keys and drivers license away and make them wait in a locked room.

    Another thing is that he finds himself making deliveries to already overloaded warehouses. The receiving end is often frustrated that they have to find room for something they don't need. As one gal put it, "stuff comes in but it never goes out."