Desolate & devastated in America

[Rajiv]

Desolate & devastated in America

K.P. Nayar drove along the world’s biggest trading route, from the US eastern shore to Detroit and across the Ambassador Bridge into Windsor, Canada, and saw the scars of downturn spread over 800km

An electronics store offering a clearance sale before going out of business in Los Angeles on February 2. (AFP)

That was the precise moment when it hit me: the extent and severity of the economic precipice on the edge of which America now stands.

I was running out of petrol on a highway that was until recently the artery of a staggering daily trade of $1.5 billion in goods between the US and Canada, 70 per cent of which was transported by trucks.

Today, as businesses fold up every day across the US, there is no petrol or diesel to be bought for an entire stretch of 184km on this highway in a once-prosperous part of Pennsylvania.

Every outlet that sold automobile fuel on this once-busy stretch has closed down. And along with it, businesses at “service centres” on this highway that hawked everything from lottery tickets and contraceptives — sought mainly by truck drivers — to Starbucks coffee and Big Macs have folded up.

The highway, known as the Penna Turnpike, begins in Breezewood, Pennsylvania, where I regularly fill up my car at a Citgo pump owned by Hugo Chavez’s Venezuela.

But no more Citgo in Breezewood, a town that lives off truckers who ferry goods across the US and onward to Canada. First the Texas-based refining arm of Venezuela’s state-run oil company gave up the outlet because of falling sales. But the new franchisee could not stay in business for more than a year.
.
.
.
.
.
.
(contd)

[Guest]

Re: Desolate & devastated in America

Seems as good a place as any to add this (Leap 2020 sounded a little hyperbolic a year ago, but actually events have unfolded not too far off their feverish predictions. As EJ moves towards a progressively blacker outlook on the world and the US, these guys get to sounding a little less extreme every month (shades of Gerald Celente!). I'm frankly still unsure if I believe in the full extent of all this crap. What are these guys spelling out anyway? Sounds like full-on international disintegration of the geopolitical order? Nah, can't be. :

GEAB N°32 is available! 4th quarter 2009 – Beginning of Phase 5 of the global systemic crisis: phase of global geopolitical dislocation
- Public announcement GEAB N°32 (February 16, 2009) -






Back in February 2006, LEAP/E2020 estimated that the global systemic crisis would unfold in 4 main structural phases: trigger, acceleration, impact and decanting phases. This process enabled us to properly anticipate events until now. However our team has now come to the conclusion that, due to the global leaders’ incapacity to fully realise the scope of the ongoing crisis (made obvious by their determination to cure the consequences rather than the causes of this crisis), the global systemic crisis will enter a fifth phase in the fourth quarter of 2009, a phase of global geopolitical dislocation.

According to LEAP/E2020, this new stage of the crisis will be shaped by two major processes happening in two parallel sequences:

A. Two major processes:
1. Disappearance of the financial base (Dollar & Debt) all over the world
2. Fragmentation of the interests of the global system’s big players and blocks

B. Two parallel sequences:
1. Quick disintegration of the current international system altogether
2. Strategic dislocation of big global players.

We had hoped that the decanting phase would give the world’s leaders the opportunity to draw the proper conclusions from the collapse of the global system prevailing since WWII. Alas, at this stage, it is no longer possible to be optimistic in this regard (1). In the United States, as in Europe, China and Japan, leaders persist in reacting as if the global system has only fallen victim to some temporary breakdown, merely requiring loads of fuel (liquidities) and other ingredients (rate drops, repurchase of toxic assets, bailouts of semi-bankrupt industries,…) to reboot it.

In fact (and this is what LEAP/E2020 means ever since February 2006 using the expression « global systemic crisis”), the global system is simply out of order; a new one needs to be built instead of striving to save what can no longer be saved.





Orders in the manufacturing sector, Quarter 4 2008 (Japan, Eurozone, United Kingdom, China, India) - Sources : MarketOracle / JPMorgan
History is not known to be patient, therefore the fifth phase of the crisis will ignite this required process of reconstruction, but in a harsh manner: by means of a complete dislocation of the present system, with particularly tragic consequences in the case of several big global players, as described in this 32nd issue of the GEAB (see the two parallel sequences).

According to LEAP/E2020, there is only one very small launch window left to prevent this scenario from shaping up: the next four months, before summer 2009. Practically speaking, the April 2009 G20 Summit is probably the last chance to put on the right tracks the forces at play, i.e. before the sequence of UK and then US defaults begin (2).

Failing which, they will lose their capacity to control events (3), including those in their own countries for many of them; and the world will enter this phase of geopolitical dislocation like a “drunken boat”. At the end of this phase of geopolitical dislocation, the world will look more like Europe in 1913 rather than our world in 2007.

Because they persisted in bearing the ever-increasing weight of the ongoing crisis, most states, including the most powerful ones, failed to realise that they were planning their own trampling under the weight of History, forgetting that they were merely man-made organisations, only surviving because they matched the interest of a large majority. In this 32nd edition of the GEAB, LEAP/E2020 has chosen to anticipate the fallout of this phase of geopolitical dislocation so far as it affects the United-States, EU, China and Russia.





US Monetary base - (12/2002 – 12/2008) - Source US Federal Reserve /

DollarDaze

It is high time for the general population and socio-political players to get ready to face very hard times during which whole segments of our societies will be modified (4), temporarily disappear or even permanently vanish. For instance, the breakdown of the global monetary system we anticipated for summer 2009 will indeed entail the collapse of the US dollar (and all USD-denominated assets), but it will also induce, out of psychological contagion, a general loss of confidence in paper money altogether (these consequences give rise to a number of recommendations in this issue of the GEAB).

Last but not least, our team now estimates that the most monolithic, the most « imperialistic » political entities (5) will suffer the most from this fifth phase of the crisis. Some states will indeed experience a strategic dislocation undermining their territorial integrity and their influence worldwide. As a consequence, other states will suddenly lose their protected situations and be thrust into regional chaos.



---------
Notes:

(1) Barack Obama, like Nicolas Sarkozy or Gordon Brown, spend their time chanting about the historic dimension of the crisis, but they are just hiding the fact that they fully misunderstand its nature in an attempt to clear their names from the future failure of their policies. As to the others, they prefer to persuade themselves that the problem will be solved like any normal technical problem, albeit a little more serious than usual. Meanwhile everyone continues to play by decades old rules, unaware of the fact that the game is vanishing from under their noses.

(2) See previous GEABs.

(3) In fact it is probable that the G20 will find it more and more difficult to simply meet, as the growing trend is one of « every man for himself ».

(4) Source : New York Times, 102/14/2009

(5) Idem companies.




Lundi 16 Février 2009

[don]

Re: Desolate & devastated in America

Reading these two back-to-back for some reason resonated in line with this post, despite seeing these things happen now for decades.

It's said nothing destroys more completely than FIRE.

There's a great American novel in the elements in just these two stories....

February 17, 2009
Dead End in Detroit for White-Collar Workers

By BILL VLASIC and NICK BUNKLEY

DETROIT — For all the ups and downs, and more downs, that white-collar workers here have lived through, they have always managed to put on a brave face, assuring one another that the American auto industry will come back stronger than ever.

But now that resolve has given way to grim resignation, as General Motors, Ford Motor and Chrysler have announced wave upon wave of job cuts.
After closing plants and shrinking their blue-collar work force, Detroit’s troubled Big Three are cutting white-collar jobs in their hometown at an unprecedented pace — more than 15,000 in the last year, with more to come.

Unlike union workers laid off from idled factories, salaried workers have no safety net of health care or guaranteed income for a year. At best, it’s a small severance or buyout, and a voucher for a discount on one of the hundreds of thousands of unsold cars that G.M. or Chrysler has sitting in inventory.

White-collar workers who walk out of the headquarters of the auto companies face few prospects in the Michigan economy. And with G.M. and Chrysler surviving on federal loans, facing a deadline Tuesday to submit new and broader restructuring plans to the government, the outlook grows only more bleak.

The market for the skills of auto engineers or designers in the prime of their careers has evaporated, with no hope in sight for a turnaround. Moving to another city is hardly an option when there are so few buyers for the suburban homes that would have to be sold first.

February 18, 2009
Automakers Seek $14 Billion More in Aid

By BILL VLASIC and NICK BUNKLEY

DETROIT — The price tag for bailing out General Motors and Chrysler jumped by another $14 billion Tuesday, to $39 billion, with the two automakers saying they would need the additional aid from the federal government to remain solvent.

In return, the two companies also promised to make further drastic cuts to all parts of their operations, in the hope that they can eventually strike a balance between their bloated cost structures and a dismal market for new car sales.

G.M., for example, said it would cut 47,000 more of its 244,000 workers worldwide; close five more plants in North America, leaving it with 33; and cut its lineup of brands in half, to just four: Chevrolet, Cadillac, GMC and Buick.

[bill]

Re: Desolate & devastated in America

Reading these two back-to-back for some reason resonated in line with this post, despite seeing these things happen now for decades.

It's said nothing destroys more completely than FIRE.

There's a great American novel in the elements in just these two stories....

February 17, 2009
Dead End in Detroit for White-Collar Workers

By BILL VLASIC and NICK BUNKLEY

DETROIT — For all the ups and downs, and more downs, that white-collar workers here have lived through, they have always managed to put on a brave face, assuring one another that the American auto industry will come back stronger than ever.

But now that resolve has given way to grim resignation, as General Motors, Ford Motor and Chrysler have announced wave upon wave of job cuts.
After closing plants and shrinking their blue-collar work force, Detroit’s troubled Big Three are cutting white-collar jobs in their hometown at an unprecedented pace — more than 15,000 in the last year, with more to come.

Unlike union workers laid off from idled factories, salaried workers have no safety net of health care or guaranteed income for a year. At best, it’s a small severance or buyout, and a voucher for a discount on one of the hundreds of thousands of unsold cars that G.M. or Chrysler has sitting in inventory.

White-collar workers who walk out of the headquarters of the auto companies face few prospects in the Michigan economy. And with G.M. and Chrysler surviving on federal loans, facing a deadline Tuesday to submit new and broader restructuring plans to the government, the outlook grows only more bleak.

The market for the skills of auto engineers or designers in the prime of their careers has evaporated, with no hope in sight for a turnaround. Moving to another city is hardly an option when there are so few buyers for the suburban homes that would have to be sold first.

February 18, 2009
Automakers Seek $14 Billion More in Aid

By BILL VLASIC and NICK BUNKLEY

DETROIT — The price tag for bailing out General Motors and Chrysler jumped by another $14 billion Tuesday, to $39 billion, with the two automakers saying they would need the additional aid from the federal government to remain solvent.

In return, the two companies also promised to make further drastic cuts to all parts of their operations, in the hope that they can eventually strike a balance between their bloated cost structures and a dismal market for new car sales.

G.M., for example, said it would cut 47,000 more of its 244,000 workers worldwide; close five more plants in North America, leaving it with 33; and cut its lineup of brands in half, to just four: Chevrolet, Cadillac, GMC and Buick.

for your Sat night.
http://www.johnrich.com/
Shuttin' Detroit Down by John Rich

[c1ue]

Re: Desolate & devastated in America

Just a quick note: the signs in the picture are identical to the signs I've now seen at both Circuit City and Shoe Pavilion, but different than Steve & Barry's.

I suspect it is because the same liquidation company was used. After all, there is benefit of scale in everything!