I'm speechless, but not surprised. Oh, and those who have received part of the 700 billion have told us that it's none of our business how it has been spent or being spent.
Posted by Judith at November 13, 2008 05:13 AMAin't surprised.
I'm more surprised, and scared, of the Kos article, by far. There's a total collapse in the costs of sea transport. While the costs of oil have fallen insanely ($1.67 gas in IOWA??), that shouldn't result in collapse. The collapse is caused by a corporate credit crunch - companies can't find the cash to pay for transport from Asia to America (and all other places). In other words: not much is moving. Demand for shipping has disappeared.
We're eating into our product reserves and switching to suppliers available on the continent. Some companies, Wal-Mart is an extreme example, live by just-in-time transport logistics from Asia-to-coast-to-store. Don't ask me how they're managing this.
In case you've all forgotten, we've also just gone through the harvest season here in the Midwest. It's supposedly another big year. Most of that grain will sit in co-ops and other storage locations through the winter, slowly being trucked away for locations elsewhere. But that's dependent om if we can still export our grain.
Thanksgiving's Black Friday is next week as well. And retailers are expecting the shittiest retail season on record, or at least since WWII.
Smarter minds than mine work on this every day, but my brain is pushing the alarm button.
Posted by idiosynchronic at November 13, 2008 06:15 AMDeep inside the Kos thread is this:
The credit crisis is spilling over into the grain industry as international buyers find themselves unable to come up with payment, forcing sellers to shoulder often substantial losses.(h/t to Melanchthon & naked capitalism.)
Before cargoes can be loaded at port, buyers typically must produce proof they are good for the money. But more deals are falling through as sellers decide they don't trust the financial institution named in the buyer's letter of credit, analysts said.
"There's all kinds of stuff stacked up on docks right now that can't be shipped because people can't get letters of credit," said Bill Gary, president of Commodity Information Systems in Oklahoma City. "The problem is not demand, and it's not supply because we have plenty of supply. It's finding anyone who can come up with the credit to buy."
Mary, of course the Congress is going to put that money wherever the lobbyists tell them to. Then a lot of money will come back to them in fund raisers and contributions. Always looking ahead to the next election. Also these lobbyists will make sure the relatives of those in Congress handing out the cash will have high-paying jobs in the industries they represent.
Welcome to Animal Farm. We just voted in the pigs and are eagerly expecting our first 5-year plan.
Posted by Bob at November 13, 2008 07:47 AMidio, thanks for helping make sense of that post; I've read it, though I don't understand most of it, except the part you excerpt here. I get the feeling that nobody knows what to do, even the supposed "experts."
Posted by iamcoyote at November 13, 2008 07:49 AMHere's another:
I'm an exporter located in Portland. We specialize in Ag exports, from Washington state to Asia and the Middle East.Posted by idiosynchronic at November 13, 2008 07:51 AM
Mostly apples and wine to Europe.
These past 2 months, I've noticed something dramatic going on.
1. the suppliers suddenly started calling me. This alone was a big change. Normally, I have to call THEM, beg, grovel, work like crazy to secure supplies. It was always a struggle because we had the overseas buyers, but the supply was tough. Now it's a 180 degree switch. They are calling me, asking about my buyers. Prices have started coming down, dramatically. I'm really worried because my suppliers in Washington have lots of expenses; cold storage costs, labour costs and so on.
2. Shipping companies. It's always been same as (1) above. We had to scratch and scrape to get our reefer containers. Just last week, someone called from Maersk (!!!) and asked what was happening (!!). Shipping costs have now dropped to about half of what they were last year. It's becoming impossible for me to give quotes because they are changing every day.
(2a) Just as I was writing this post, I got an email from another shipping company. They are wondering can we please sign this shipping contract?
3. I believe the reason for this is the issue of credit. The buyers are still there. They still want to buy (we've got absolutely awesome product). The problem is, the shipping company can't count on the Letter of Credit from the foreign bank in order to pay for the shipping costs.
If this continues for another 1 to 2 months, expect major companies in Washington to fold. This is a weird price deflation, not based on lack of demand but of logistics.
Coyote - even the second part of that Kos post confuses me - I just understand macroeconomic commodities because I've lived them my entire life here. The sun rises and sets on grain, shipping, and the ag trade in Iowa.
Posted by idiosynchronic at November 13, 2008 08:09 AMPhew, idio, I feel better, then. Still, the stuff you've put up here is enough to scare the shit outta me. Luckily, my biz doesn't export on such a huge scale, though we are being crushed by the shipping costs as it is. Our WA economy is a little better than the national, I don't know why, Microsoft? We've still got houses going up. Still, what you've posted here is pretty scary.
Posted by iamcoyote at November 13, 2008 08:41 AMOur WA economy is a little better than the national, I don't know why, Microsoft?
No, not Microsoft, it is because of Gregoire and our Democratic Legislature!! (Or at least my guys in the legislature.)
Seriously. I did argue a lot of economics re: Gregoire and what she has done for our economy. When people would talk about Dino Rossi and "change" I would reply, "change from what? Lookit how much better that WA is doing than the National economy? Is the value of your home still going up? Not so Nationally, etc, etc."
I did a lot of research to argue better than just out of my ass, and we are lucky...
But that post that you guys are quoting from freaks me out. Logistics is a funny thing, but something that husband has worked in his whole life. I will run this stuff by him tomorrow and see what he says - and what he has noticed.
I will tell you one thing...the gift that I got for kiddo's birthday last week has increased in price and is no longer available through Amazon. This is strange because people are talking about electronics prices going down because of the economy etc. But, I think that the opposite might be true if we cannot get goods to market. The little bit of inventory that people do have will probably then go up substantially. Not because of demand - but because of lack of supply (as referenced above.)
Interesting.
Stock up on beans and rice and other canned proteins. I am not kidding.
Posted by Anjha at November 13, 2008 09:13 AMThanks, Anjha, you're right. Sad about Darcy Burner, but yay that Gregoire made it. I hadn't thought of it until you just said it - we are better than the nat'l average because of how we've been governed. We still have problems, but not as bad as some states.
Posted by iamcoyote at November 13, 2008 09:22 AMHey, did you guys hear about Dennis's sister? Damn, that is really sad. She looks just like him.
The poor guy. He really has had a tough life.
Posted by Anjha at November 13, 2008 11:17 AMits certainly no surprise to me that the Bush govt is already bungling the Bailout packages. Why would anyone believe they would do an exemplary job on this when they've totally screwed up everything else they've done??? I told you so.
Posted by T2 at November 13, 2008 11:30 AMAl Gore nixes any speculation that he will join Obama administration.
Posted by snark at November 13, 2008 01:25 PMPretty much what we expected, right?
Posted by iamcoyote at November 13, 2008 01:51 PMJust saw the Bidens enter the VP's lair on MSNBS.
Things seemed to go rather well after Joe frisked Deadeye for weapons and confiscated his Swiss Army knife just to be on the safe side.
Posted by TIKI AL at November 13, 2008 02:33 PM