Disturbing news

http://globaleconomicanalysis.blogspot.com/2009/03/paycheck-away-from-ruin.html

A MetLife study released last week found that 50% of Americans said they have only a one-month cushion -- roughly two paychecks -- or less before they would be unable to fully meet their financial obligations if they were to lose their jobs. More disturbing is that 28% said they could not make ends meet for longer than two weeks without their jobs.

So what happens when they lose their jobs? No more mortgage payments. No more car payments. No more credit card payments. No more anything payments.

This spiral down has no end point. Debt destruction continues unabated - the Fed can't print near enough money to cover it.

This isn't a recession. This is a destruction of the American lifestyle. The US became of society of grasshoppers and very few ants. There aren't enough ants to provide for the grasshoppers. The government can only do so much.

I can see bankruptcies exploding this year. People are going to be moving back in with mom and dad. Secondary markets are going to be non-existent. The over-capacities and huge surpluses just aren't going to go away anytime soon.

Companies in trouble are going to leverage up more debt in desparation - and then many will default. Many companies over-expanded and are in the same boat as private citizens - they don't have savings either. I claim that many more businesses will go bankrupt than most people expect. The marketplace is being destroyed.

I can't believe how there are people touting that the recession is over now and everyone should get back into stocks today. Crazy. We are not going to return to a 2007 system anytime soon (and maybe never).

And the rest of the world is in worse shape than the US. Dark days are ahead I'm afraid.