A quiet Sunday morning

A storm of note blew through here last night. Its the end of March, we've had more than our share of real winter so I'm voting that this is unnecessary and a contravention of our rights to have spring. So other than a whole host of good reasons to stay indoors what comes with the newly fallen blanket of fresh snow?

The economic, financial and market news is dreadful. Although I remain reasonably comfortable and calm, the underlying implications of these times is daunting for sure. One of NYC papers yesterday spoke in terms of; "good help us if GE fails". Over 2M people have lost their jobs in the states in the last months. Unemployment is marching its way past 7%. Consumption dying. Conspicuous consumption is under heavy assault. There were words of civil unrest and disobedience to come. The frequency, intensity and nature public actions is on the rise. Russia. Eastern Europe. Iceland. China. Certainly global in reach, but at the grassroots level as well. A touted new strategy in the foreclosure process. With continued deterioration in global conditions, the potential for protectionism, and ongoing ethnic and territoiral battles, are we at a moment of inflection, when the collective becomes the core. A new world order in the making?

"What if it’s telling us that the whole growth model we created over the last 50 years is simply unsustainable economically and ecologically and that 2008 was when we hit the wall — when Mother Nature and the market both said: “No more.” (NYT OpEd).

The fraudster stories too remain intriguing though maybe less entertaining and more disgusting. Particuarly when you have to read that there are rumours of a plea for Madoff. And last Monday's revelation that some 10's of millions of dollars held by Ms. Ruth M are to be protected. That outta be good for another few (hundred) points on the disobedience and public outcry scale? Or have we become numb to these atrocious people and their ability to influence the sytem into their favour (Madoff Saga Fallout). I had been in a discussion weeks ago when it was mentioned that precisely this outcome would prove true. I expressed my sincere hope not. Scarily little news reaches us these days on the others, Cosmo, Stanford, Nadel and the list goes on.

Have the overwhelming circumstances of economic financial and market disarray and befuddlement of nearly every professional, expert or novice placed us in a state of full capitulation (NYTimes)? Are we on autopilot and full survival mode? In some's opinion, that is precisely when things turn around. You do not have to look far to find people scratching and crawling and digging to find the bottom. Will we achieve a point where capacity and production stabilise? What is the direction we are headed. GE closed on Thursday at $6.66 - that's almost a cruel joke. The blue chip (almost) penny stocks are scattered throughout, CitiGroup, Bank of America, General Motors, Unysis, AIG and many many others. Completely half of the Whilshire 5000 index are now below $5!!

Dr. Marc Faber (Doom, Gloom, and Boom Report) while in Canada to speak at the PEDA conference in Toronto, was on screens everywhere this week with a common message - the dramatic declines in exploration, development, production and output will be felt by a global ecoomy that still needs oil, raw materials, resources and commodities. 1982 low for the CRB index was 182. Then 365. Then exloping to 473 July 2008. As of last week, CRB index now in the low 200's. The world has not stopped, and the cliff diving by so many measures will have consequences. In his view is a rebound is inevitable, timing is another thing. Hyperinflation is also eventual. His view is that there have already been some indicators. This view has its supporters and its detractors. His examples, Newmont and FreeportMacMoRan, both up significantly since his stated bottom of November 21 2008. Cisco will excel. Intel is a nice company. GM should rot away. Strong companies will continue with R&D, the weak ones will disappear. Peak oil? We will not be seeing $10 oil ever again. But watch out, the financials still have hidden closets of toxic assets, even Canadian banks. The thing to watch is the strength of the USD . As this weakens, and it will, asset prices will rebound famously.

As always, watch, listen, learn. History is unfolding. And I will get back to my pancakes and syrup and watching a movie with my son on this chilly March morning.

Dr. Doom [03-05-09 8:15 AM] and Dr. Doom: Q&A [03-05-09 8:30 AM]