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March 18, 2009
The Greater Depression – At Least For Ships

Back in October I asked you for visible signs of the economic slump. For me the first sign were five ships (picture) up-laid in a usually empty part of the Hamburg harbor.

Here is a newer picture of another harbor part with another five pretty new and good ships up-laid because of general lack of trade and load.


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In total I recently counted eighteen up-laid ships in Hamburg alone and I may have missed some. Now Lloyd's List reports:

Just over 11% or 434 ships in the global containership fleet are currently unemployed.

The latest Alphaliner statistics showed that an additional 31 ships have been placed in lay-up since March 2.

To mothball those ships has help to put freight-rates measured in the Baltic Dry Index back up to 2,400. The index had slumped from a very profitable 12,000 level last May to a ruinous 800 in October. But the ships still sailing now are still unlikely to make any money. More of them will have to be placed in lay-up.

In the German version of the Financial Times shipowner Claus Peter Offen, who has more than 130 container ships in his fleet, expects that by the end of 2011, 25% of the world's container-ships fleet will swim idle. Another big German shipowner was reported to have rented a whole fjord in Norway to park his unused ships.

This table I dug up shows that the 25% level would be worse than the idle numbers during the Great Depression.

Up-laid trade-ship tonnage of the most important shipping countries 1930-34
 (midyear numbers, BRT=Gross Register Tonnage)

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Idle world tonnage:

  • 1930:  8.0%
  • 1931: 15.3%
  • 1932: 20.4%
  • 1933: 17.3%
  • 1934: 11.7%

Today's number of 11% is already higher than 1930's midyear 8%.

C.P. Offen estimates 25% by 2011 because he expects a similar trade slump as during the Great Depression but additionally accounts for the high number of new ships which are still on order books or being build right now. They will further clog the freight markets. The current world fleet is also in average unusually young and only few of these ships will get scarped soon.

So I welcome you to The Greater DepressionTM, which it will be at least for shipowners, seamen and harbor workers.

My question again:

What are signs of the downturn you see in your area? How have they changed in the last months? Are things getting worse or better?

Posted by b on March 18, 2009 at 18:44 UTC | Permalink
Comments

In my area, I’m not seeing it. There are more people on the road than ever before. This may be due to the fact that people are flocking to this city from other areas of the country and are wondering the streets for lack of ability to find something constructive to do at home. The low price of gas adds to the traffic problem. There are some foreclosures in my neighborhood, and if I were to sell my house, I would take a loss. Of course, I wouldn’t take a loss. If it came to that, I’d walk away from it. But other than that, it seems like business as usual for most folks.

Posted by: Obamageddon | Mar 18 2009 18:59 utc | 1

I worked as a property searcher for a title company in Florida for 9 years. I did 30-year searches and gave legal opinions on the chain of title of homes for sale and purchase. When I started in 1999, I did approx. 125 searches a month. During the boom I did anywhere from 225 to 300 a month. The last 2 years I was lucky to do 25 a month. The company folded last October.
Unemployment in this county is 11.4%.
I think this qualifies as evidence of an economic downturn.

Posted by: vachon | Mar 18 2009 19:22 utc | 2

Using the table displayed above I did some calculation to see how the total world tonnage changed during the Great Depression:
Total world tonnage (GRT, midyear numbers)
1930: 696,000
1931: 703,000
1932: 698,000
1933: 680,000
1934: 660,000
So at the beginning a few new ships still were coming onto the market in but then scraping was pretty visible.

Posted by: b | Mar 18 2009 19:22 utc | 3

In the Happy Little Kingdom of Denmark, it’s more like the calm before the storm. Unemployment is up, but still quite low. A couple of banks went under last Autumn and the big banks (Danske Bank and Nordea) lost some bundles on Lehman, AIG and others, but they still showed a profit.
A major dealer in Denmark is Mærsk Møller — it’s a major player in the container game, so they will be hit sometime. The company I used to work for, Clipper Group, seems to be solid, but cancelled all pay raises last fall and the bonus paid in ’09 was a fraction of what it was the past 5 years.
The most obvious are many bankrupties of smaller firms who can’t get financing — that and car and house sales. Car sales were down some 45% and houses are really hard to sell. Actually, the number of houses up for sale has fallen — people just take them off the market and rent them out instead…
About the only thing the gov’t has done is give big tax breaks to the rich as part of their “stimulus” package. It’s not for nothing I call the PM “Bush Lite”.

Posted by: Chuck Cliff | Mar 18 2009 19:34 utc | 4

One’s hedge funds cannot get much traction in this low-dispersion market regime but otherwise things are splendid.

Posted by: …—… | Mar 18 2009 19:37 utc | 5

One reads constantly that the economy or the dollar or credit are going to blow up. The reality is that empires ,enterprises, colonies shrivel into nothing

Posted by: jlcg | Mar 18 2009 19:56 utc | 6

What crisis? You could have doubled your life savings going all in, all down on AIG.
http://www.kitcometals.com – strategic metals have bottomed with prices going up, you only have to research which are the senior mining company plays ahead of Obamageddon. IBM wants to sit in the Sun, if you were a faithful Java drinker, you made a killing.
Real estate is screwed, blued and tattoed, but it’s a work-through. Some will sell, some will rent, and some will burn them down for the insurance. Poor Warren Buffet. Well, not poor-poor. BRK’s no different than Madoff, but has a better business model. Get a new suit while they’re cheap, new shoes, a couple of new ties. Tsunamai of $’s is about to shower the globe with Geld in search of distressed property balloon deals, then they’ll sweep up confetti from the streets and it’ll be back to normal work week. Or sit in your bunker with your knees to your chin, wondering what the music is about.

Posted by: Anonymous | Mar 18 2009 20:28 utc | 7

b
the situation is graver each month – in my areas of work – in the homeless shelter the numbers have considerably accelerated each month since last october – because it is a large provincial town it takes all the people from a very large catchement area – including people from marseilles & paris. a considerable amount of my work is done in hospitals & i partially live there because of my illnesses – my comrade doctors, nurses & aides tell me the situation is also very aggravated since last year – less resources, more needs. the life of the quartiers has become increasingly more difficult – a significant shift in unemployment & the social contracts being played around with by the national govt
i also notice that there are masses of small shops that have closed & comrade commercants tell me they are doing about half their numbers from last year – bookshops, clothes etc
associations like my own have less resources & so the worker like myself have to take a cut in wages & being a good marxist i’m up to my neck in debt like everybody else i know here
my feelings are obviouslly coloured by my own illnesses bu the sense of crisis is palpable – it does not feel foreign it feels more precarious
at least as far as sondages/polls go – which i do not trust over85% of french see strikes as justifiable
here as in other countries the incompetence is so clear – the people feel under great menace & it is as clear as day that it is going to get worse, considerably worse
& in liue of the bolshevisation of the culture or of artist – when i listen to the commentaries – the great majority are completely reactionary, lots of revisionism, & i fear that the 30’s & 40’s are here with all their attendant intellectual collaboration with power. they reveal their hatred of the people in each cadence
& the hatred of the people most especially of the poor is so noticeable that it has all the aspects of a class war combined with a pomposity grandeur & delusion being very present in the elites

Posted by: remembereringgiap | Mar 18 2009 20:43 utc | 8

I asked those questions because I am interested in your situation and view.
The comments of “…___…”, “jlcg” and the no-name @7 are useless drivels. Maybe those people are incapable of giving answers.
Other here are. So please let me know.
Did something visually change in your are the last months? Up or down?

Posted by: b | Mar 18 2009 20:48 utc | 9

Thanks to r’giap for that picture – sounds bad indeed. Not sure yet her if this will go left or right – I fear right though.

Posted by: b | Mar 18 2009 20:54 utc | 10

Does 4+ months of unemployment count?

Posted by: biklett | Mar 18 2009 20:56 utc | 11

b@9 Did you use the word drivel because it rhymes with shrivel?

Posted by: jlcg | Mar 18 2009 21:12 utc | 12

Actually, that actionaid thing posted by -…- is worth reading.
Sure. It’s bad here. Closed retail (cars, clothing, circuit city, etc.) and mom & pop shops hanging on for dear life. And workers in union shops struggle. The local grocery store is savagely cutting hours. And the union has no balls. Gotta keep the stockholders happy.
Class conflict is more obvious.

Posted by: slothrop | Mar 18 2009 21:20 utc | 13

I am in a smallish city in a rather isolated area. One big employer here is a 100% defense contractor so that $$ keeps coming in, at least for now. Other businesses whose sales are mostly elsewhere, including my own, are feeling the pinch – roughly 50% down so far. Not good.
Many of the people here are self-reliant farmer types, wary of high mortgages etc. and they are good survivors. Unemployment is up but not real bad yet.
Remember, this downturn is just at the beginning, at least according to some, so I expect money flow to get worse, not better. If you follow some of the action in Washington (just up the road from me) you’ll notice that our govt is doing all the wrong things to fix recession/depression. Which brings up another point: crash is intentionally orchestrated by PTB. No details on that at the moment please, but it is obvious.

Posted by: rapt | Mar 18 2009 21:28 utc | 14

little thing (or not so little)
notice even with new taxes restaraunts are lowering prices & many many doing deals for lunch in france when you are hitting at the stomach – you are hitting hard
i feel a profound swing to the left in the communities but not so paradoxically an adjacent swing to the centre by the left. the cultural elites with notable exceptions reinscribe their scratches for their right – christ we need a bourdieu or a foucalt right now – not the dumbfucks who imagine themselves descartes
but we have a brand of ‘experts’ like alain minc – who are so laughably far from reality that i think the expert business has fallen on hard times even for the cretins. i expect these hippy younf thing will celebrate the fascist furies of dantec who has made of his mental illness a careeer move
i have a banned copy of a book written by a cruel cretin just before the occupation by a numbskull called rebatet who also wrote on music & maurice dantec is a caricature of theis clown

Posted by: remembereringgiap | Mar 18 2009 21:34 utc | 15

It’s interesting that the recession+finance scam is really going to hurt developing countries. The whole business of sustaining development by export-led expansion and finance of service economy consumption has led to a new kind of “development of underdevelopment” in which all but the brics are screwed because no domestic consumer-middle class. Same old, same old.

Posted by: slothrop | Mar 18 2009 21:35 utc | 16

Good Morning everyone, here in Darwin at the northern end of Australia, not much if anything has changed since mid last year. This is largely due to the Northern Territory being somewhat isolated from the crisis as the state government is proportionally a large employer as well as a constant source of revenue for private contractors such as myself. Since the state gov had set its budgets for FY 08/09 prior to the economic downturn, no lay-offs or cost cutting measures will come into effect until July this year, which is when I expect the new year’s budget constraints will start to bite the local business sector.
It’s a different story in other Australian states though, with unemployment numbers going up by 50’000 last month alone, mainly in the manufacturing, retail and banking sector. Australia has lived through a largely mining and export driven boom for the last 10 years, with China and Japan the well heeled customers buying up most of the commodities. Since those two export markets are contracting fast at the moment, some impact is felt in that sector; especially the base metals and diamond markets have collapsed. Although, the gold and uranium prices stayed pretty much the same, so those mines are still pumping at full capacity, and the NT is full of gold and uranium – lucky me.
I’m busier than ever. I am self-employed in the IT and Accounting sector and many of my clients, small businesses themselves, are still reporting sales and profit figures as usual. The Australian dollar has fallen hugely since mid last year, which has helped attracting overseas tourists while at the same time making it more expensive for Aussies to travel abroad, so they spend their vacation dollars here in Oz, meaning that the tourism industry, which is a major employer in Australia, isn’t suffering that badly. In a nutshell, some parts and sectors in Australia are feeling the pinch, others aren’t. Fortunately for me, I live and work in the latter.

Posted by: Juan Moment | Mar 18 2009 22:04 utc | 17

Sloth @ 16
Paradoxical, in that developing countries, and others like Italy have long experience of black and gray economies. If they’re hit hard, will they be quicker to recover, I wonder?

Posted by: Tantalus | Mar 18 2009 22:07 utc | 18

with prepackaged food, I’ve noticed new packaging is being created to obscure the fact that portion sizes are being slimmed and trimmed while prices go up.
meanwhile, housing prices here (missoula, MT)are bucking the national trend, barely going down, and rent remains very high, partly because this is a college town. this state entered into the recession about ten months later than most though, so there are indicators of decline just beginning to show.
growth in the valley north of town was being primarily driven by construction, which dried up quick. i think unemployment in the flathead valley is something like 13/14%.
but, talk to an indian, and you’ll get a much different perspective. the poorest places in this country are the reservations, and they’ll just laugh at you if you exclaim how horrible a 14% unemployment rate is. on the rez, unemployment is astronomical, sometimes as much as 60/70%.
oh, and a bunch of mill closures, which were some of the last decent paying jobs.
in the non-profit world, everyone is gearing up to fight for stimulus money. there seems to be some sort of incantatory power behind the phrase shovel ready

Posted by: Lizard | Mar 18 2009 22:09 utc | 19

By the way, SOS’s short comment at #5 might have been slightly OT, but I agree with sloth, I appreciated the link. A stark reminder that for people living in developing countries, the current financial crisis spells doom. NGO’s which so far have carried a large junk of the aid projects are suffering from drastically reduced funding, which in turn translates to increased hardship for the already poverty-stricken and needy people living there. For anyone with a few spare bobs, now is the time to donate to the many organisations fighting for the good cause.

Posted by: Juan Moment | Mar 18 2009 22:22 utc | 20

i keep commenting to people that things look pretty normal where i live (eugene, or). people driving nice vehicles, going out for dinner, to movies and music. if i didn’t keep pace with the news, i’d not know from the looks of things in my town that we’re in a depression.

Posted by: Go East Young Man | Mar 18 2009 22:31 utc | 21

and on Friday WFP halts charter flights in Africa due to funding constraints.
and long-short equity really does suck mildly (Hey, it’s my truth, as I would say if I was a new-age chick – I’m a class enemy but not a running dog)

Posted by: …—… (SOS, A+!) | Mar 18 2009 23:18 utc | 22

On the west slope of the colorado portion of the rockies, the economy is mixed. Gas, oil, oil shale workers are suffering layoffs and there are stories in the grand junction paper (thinner every day) about bankruptcies in the business sector.
Several big box stores have closed, but I think those closures have more to do with their parent companies going under rather than those particular stores doing poorly. But then grand junction’s shopping has long been supported by aspen and teluride denizens, who now have big box stores closer to where they live, which probably hurt GJ…
I live in a small farm community that also has coal mines, which help stabilize the economy, because they are always busy. The place I live has been growing quite a bit, despite the economy. There is a stripmall in a nearby town that has been left 1/2 completed since aug, and the piles of new wood sit and rot. Foxworth/gabriel (sp?) which is a contractor lumber yard has closed both of the new yards they just opened also.
On the other hand we have one of the “shovel ready” projects starting to break ground to widen the highway; lots of small organic farmers and ranchers; dozens of Mennonite families who also farm; and what appears to be many new mom and pop shops opening their doors too.
Where I go for my morning over-priced coffee, there are less customers, sometimes even no customers when they first open, which is a change. But by mid-morning, if I get there late, the place is packed, more people now than ever.
My buddy has an appliance shop and he felt the pinch nov-dec, but then that is always a rough time for his business. Now his sales are lower, but not too much, and it seems it’s beginning to pick-up. This may even be because the big box stores closed in GJ (about 50 miles away). I suppose this is what’s helped keep us going study is that we are mostly small local businesses, which is a pain in the ass if you want something friday at five p.m., but when times get tough, they seem to hang in there.
There is more traffic than I seen in months, more out of state plates passing through then normal but most of us still manage to smile and wave, at least at the cars we know.
I can’t honestly say if I’m slower or not. I’m starting a new business that I didn’t plan on making money with for a couple of years anyway, so I’m busily working on my infrastructure, trying to find a little local help and kind of taking it easy while I work a freelance job now and again. I don’t have as much freelance work coming as I used too, but then I’m still getting enough to pay my few bills.

Posted by: d.13 | Mar 18 2009 23:30 utc | 23

Here in Portland, OR, the number of homeless folks in my neighborhood has visibly increased, the number of books my academic book catalogue job has delivered has decreased markedly (no surprise there, I knew that academic book publishers had been taking an even bigger hit than commercial publishing), and my friend’s girlfriend has been unsuccessfully searching for a service-sector job that she’s easily qualified for for the past four months with no luck.

Posted by: Rojo | Mar 18 2009 23:37 utc | 24

Anecdotal news from a friend in the commodity chemical trade. Chinese chemical companies export orders to the US and SE Asia have collapsed – sales decline over 70%. However, sales in domestic Chinese market is still holding up – meaning no shortfall in domestic sales.

Posted by: ab initio | Mar 19 2009 0:06 utc | 25

While the gas prices have been nice for poor folks like me (I’m currently on unemployment) there doesn’t seem to be as much traffic on the road. Lots of eighteen-wheelers, but not so much traffic. A lot of folks driving slower, too. This hearkens back memories of the 1973 oil crisis, when Nixon lowered the speed limit from 70 to 55.
Speaking of unemployment, the numbers here in Ohio overwhelmed the computer system a few weeks ago. People were panicking because the site was unavailable, as well as the phone system.
You see a lot of businesses closing (or already closed) in the city nearby, and a lot of homes empty and/or for sale.
I’ve gotten several letters here lately from shysters urging me to sue someone. Things must be getting bad when lawyers send out mailings to try to drum up business.

Posted by: Jim T. | Mar 19 2009 0:50 utc | 26

Houses prices in the San Francisco Bay Area have dropped dramatically. My brother in law is a longshoreman in the port of San Francisco. He says that work has slowed, but that there is still overtime available. I am a former autoworker AND a former steelworker. Nothing scares me.

Posted by: Jon | Mar 19 2009 1:46 utc | 27

& we are clearly just at the beginning – i don’t think it has really kicked in. there will be many icelands on the map. societies that have bred the illussion of equality of opportunity(where none have existed since the 70’s) the rupture is going to be profound, very profound. countries like australia will fall under the weight of their own prepostorous fantasies
i do not delight in the idea of suffering but it is going to be an era of immense suffering – perhaps hopefully out species will learn what humanism means, by force of necessity
what is of concern really about a movement to the right – is that there is much fear coupled with hate – that dynamic we have seen before & its terrible results. & we are at a time where an empire was allowed with impunity to destroy one of the cradles of civilisation in iraq. only a society full of hate could have constructed such carnage
perhaps it is time to go & live in caracas

Posted by: remembereringgiap | Mar 19 2009 2:05 utc | 28

Seal Beach Ca….Things here are about normal, shops at the beach are busy on week-ends, ditto the eating places. In the senior community where I live, prices are down, but pretty much normal, as far as buying and selling are concerned. When the weather is nice like this week, parking on main street is hard to find at all times. As with #21, I can’t see the downturn here. Maybe I live in a bubble.

Posted by: ben | Mar 19 2009 3:34 utc | 29

i’m in the SF bay area, i just helped my neighbors pack up and move last weekend (he says there’s carpentry work in pittsburg). he can’t find work here anymore, he’s in the building industry. my other friends in that business say it has slowed to a crawl. my friend with a retail store says business is way down. when i drive thru town many restaurants are noticeably almost empty many nights but i was just in the downtown of the neighboring town and there was a little nightlife there, cafes and such. my friend who’s a freelance graphic designer is having trouble making ends meet. my roomie just moved to another state a few days ago, he hasn’t been able to find work.
there was a wonderful hardware store nearby for 30 years. 2 years ago home depot must have made them an offer they couldn’t refuse. i’m sure it irked HD the little store took away a lot of their business. after being open for 2 years as HD they are closing the little store. luckily there is one other hardware store in my neck of the woods otherwise i would be forced to go to the HD. housing prices have dropped. a shopping center not far away (northgate) is almost desolate. lots of empty storefronts in the mall. many many sales, the gap superstore closed and another big one, a macys or something. new little mexican restaurants popping up and there is a very popular inexpensive puerto rican restaurant w/excellent food nearby that frequently has a line out the door. moneys tight, everyone mentions it.

Posted by: annie | Mar 19 2009 4:57 utc | 30

Bay Area job market is killing me. It’s been killing for about 8 months. I can’t even get interviews, let alone jobs.
I notice that tiny little job offers posted on Craigslist tend to get removed after a day or so. I presume that it’s because it’s such a small office that the replies overwhelm their email, and they get enough responses in a day to shut it down.
The number of jobs available has decreased, and almost all of those are at the low end.

Posted by: Rowan | Mar 19 2009 5:58 utc | 31

There seem to be quite a few Bay Area people here. Maybe we should get together for a non-virtual tipple. Maybe for Nowruz or May Day. Let me know; my partner and I do a great Kazakh feast.
On the brighter side (for me) is the government subsidizing 65% of my COBRA payments, $25 more every two weeks in my unemployment checks, and since my mortgage rate is based on ‘cost of funds’ it is now below 4% interest rate. Most of my friends are professional slackers so it hasn’t affected them too much.

Posted by: biklett | Mar 19 2009 6:54 utc | 32

A report from MOA’s somewhat unreliable BRIC correspondent in Brazil:
1. At the macro level, our GDP had a huge drop in the last quarter of 2008 and a similar one is expected this quarter. Most analysts predict zero growth this year, but the government still believes – or pretends to believe, which of course goes with the job – that we will have positive growth. Job losses were high lately but seem to be recovering. The banking sector is solid but loans are scarce and interest rates impossibly high. A few large exporting companies that bet too heavily in future markets have tanked and are being absorbed by others; most prominent is the case of Sadia, which is merging with Perdigão to form what will be world’s largest chicken exporter. High-tech companies like our aircraft maker Embraer are facing difficulties and laying off workers. It took a while for the government to acknowledge that we could have problems; now that they do, it is taking them an inordinate amount of time to decide what to do next. We have a long-standing tradition in Brazil of laying low and doing nothing on the hope that matters will settle themselves; as much as it annoys me, I suspect this time it may prove to be a positive trait. Under a strong current, you may overturn the boat by trying too forcefully to steer it.
2. Locally, few people seem worried – and then only at an abstract level, from following the news. We are used to crises and downturns; losing consumption power is not generally seen as losing personal substance. Like Bob Dylan said, when you’ve got nothing, you’ve got nothing to lose. And then, we had a particularly long and pleasant summer. On the positive side, local prices of export goods, particularly meat, have dropped sharply due to the domestic surplus. Domestic tourism is also booming due to the somewhat paradoxical hike of the dollar & euro last november – and tourism, I believe, is the only major industry left where no technological replacement for people yet exists. All in all, I don’t see much happening. Surely, catastrophic figures are flying back and forth, but so far they don’t seem to reflect on the real world.
And, at a personal level, I think what is happening is basically good – a sort of trimming down to the so-called bare necessities of life. Nobody really needs an iPhone or 150 pairs of socks. I have a friend with terminal cancer. He told me lately he has been constantly amazed by colors. Every day he wakes up very early, heads to a coffee shop and sits down with coffee and cigarettes to watch the sunrise. It’s sad that it took him such a catastrophic turn of events to learn something. But to me it’s progress anyway.

Posted by: Pedro | Mar 19 2009 7:10 utc | 33

On my drive to work at a Boeing factory every day – where the layoffs of hourly workers have begun – I pass alongside the main rail lines for the Union Pacific and Burlington Northern Santa Fe railroads into Seattle. For the past several weeks, there have been 25 or more Union Pacific locomotives parked on a siding. I’ve seen a few there before, but never this many, and never for this long. Since much of the rail traffic leaving Seattle consists of containers offloaded from ships arriving from Asia, it stands to reason that rail traffic will drop sharply as trans-Pacific shipping drops.

Posted by: Jim | Mar 19 2009 7:44 utc | 34

There seem to be quite a few Bay Area people here. Maybe we should get together for a non-virtual tipple.
sounds good to me. send me an email.

Posted by: annie | Mar 19 2009 8:17 utc | 35

hmm, it didn’t go thru ..

Posted by: annie | Mar 19 2009 8:19 utc | 36

i’m fading fast but i think a west coast gathering is in order.
tomorrow, we plan

Posted by: annie | Mar 19 2009 8:22 utc | 37

I live in a reasonably affluent part of the midlands of England. There aren’t many obvious signs of recession yet except,
1. The local up-market restaurants are advertising eye-catchingly cheap 3-course menus at the moment. I read this that discretionary spending is slowing dramatically.
2. A friend of mine haggled an amazing deal on a new car recently, the sort of discount that you couldn’t have dreamed of 12 months ago. Again, this signals that discretionary spending is slowing fast. Car dealers are unfortunate enough to be in the front line.
3. The chatter in the local pub makes me think that several middle class friends of mine, in industries like commercial property & construction materials, are expecting to lose their jobs in the near future. It feels like the lull before the storm. In my view we have six months here before the second wave hits with these guys on the dole (unemployment) and the takings down at every place that they spend money, including (god help us) the local pub.

Posted by: Maff | Mar 19 2009 8:49 utc | 38

Which brings up another point: crash is intentionally orchestrated by PTB. No details on that at the moment please, but it is obvious.

I also believe so…
Here in Australia ( QLD) I see that prices of food, electricity and other essentials are going UP and big time. Yes they have specials and cut the prices of the stuff we do not need for living. Those lease/sale business signs are everywhere and rarely those properties are sold/leased (here and there yes).Small shops are still standing and only here and there one can see small shop closed. Interestingly I can see houses “for sale” but also those “sold” even if property prices did not fall (they may even rose).
But my daughter told me that a lot of her friends who graduated from University few years ago and had very good jobs now lost their jobs. My relative in UK also told me “ Young people are loosing their jobs” (her son in law lost it recently and he was working a long time for city council).
Developing countries are going to suffer because they opened for western capital/investments, westerners bought and closed most of their factories/industry. Free trade opened their borders for imported stuff. They did not mind much because money was flowing from the west ( credits too). Now they will find their selves with no money and no production…it’s going to be hard.
@18 Yes those developing countries are used to gray and black economy so they will adapt better to the situation but I don’t think they will recover any faster…
@Pedro-when I read your post it sounds like you are writing from Serbia…

Posted by: vbo | Mar 19 2009 11:11 utc | 39

Oh my God…what have I done? Sorry b…

Posted by: vbo | Mar 19 2009 11:14 utc | 40

test

Posted by: vbo | Mar 19 2009 11:15 utc | 41

I’ve worked for a very large engineering firm for 10 years now. I was hired to do cadtech on a good sized bridge renovation project (10 of them) in my city but it was all shelved after a few years because money for infra-structure dried up.
My boss asked me if I’d volunteer to inspect luminaires along the interstates in NoVa. and I agreed because I needed to earn my paycheck. I spent 10 months crawling around on the side of the highway with a big wrench.
Whether it’s my governor’s early support for and alliance with the new prez or something else, the bridge plans have been dusted off and are being updated. I’m busy for now but I have a neighbor who hasn’t found work since the beginning of the year and my S.O. has done some work for me and is working for other friends (he’s a self-employed contrator) since his usual avenues for work are not calling with offers.

Posted by: beq | Mar 19 2009 11:28 utc | 42

In Las Vegas, which was a red hot market during the bubble, the two houses on sale on my street i mentioned months ago are still there. They are comparable to mine which I bought in February of 2004 for 625k. In 2006-7 such houses were in the 750k neighborhood. The two houses have been on sale for 550k as asking price, which no one will pay. And so one has been discounted to 399k. I suspect it will sell at that price as there is much more visiting traffic.
Moe ominously, pan handlers and put of luck people are noticed even in fashionable commercial areas in the suburbs. I get the impression most are newly homeless who until recently had a house and a job. Like Rojo in 24 mentions.
Still, the signs are far from overwhelming. For most it is easy not to notice. The supermarkets are still full and popular restaurants still have customers. Less popular ones are desperate for business, though.
P.S.
About two weeks ago I visited the Bellagio, one of the huge plush mega casinos, with visiting friends. On a Saturday night, it seemed rather hollow.

Posted by: Lysander | Mar 19 2009 12:06 utc | 43

Here in South Jersey, across the Delaware from Philadelphia, in an affluent suburban area, little has changed. A few stores have closed. Across the river, my newly-graduated daughter, looking for work, can’t get phone calls returned. She is getting pretty Depressed. My son, who works in a large supermarket on this side, says business is down somewhat.

Posted by: Ralph | Mar 19 2009 14:10 utc | 44

Views from the Great Recession.

Posted by: D. Mathews | Mar 19 2009 14:21 utc | 45

Hey, this is a great thread. Finally able to get a bit more personal, peek at your background. I’m surprised not to hear from Europeans except for b and vbo, but I guess most don’t deal with English language blogs.

Posted by: rapt | Mar 19 2009 14:56 utc | 46

James K. Galbraith: No Return to Normal – Why the economic crisis, and its solution, are bigger than you think.

Geithner’s banking plan would prolong the state of denial. It involves government guarantees of the bad assets, keeping current management in place and attempting to attract new private capital. (Conversion of preferred shares to equity, which may happen with Citigroup, conveys no powers that the government, as regulator, does not already have.) The idea is that one can fix the banks from the top down, by reestablishing markets for their bad securities. If the idea seems familiar, it is: Henry Paulson also pressed for this, to the point of winning congressional approval. But then he abandoned the idea. Why? He learned it could not work.
…
The most likely scenario, should the Geithner plan go through, is a combination of looting, fraud, and a renewed speculation in volatile commodity markets such as oil. Ultimately the losses fall on the public anyway, since deposits are largely insured. There is no chance that the banks will simply resume normal long-term lending. To whom would they lend? For what? Against what collateral? And if banks are recapitalized without changing their management, why should we expect them to change the behavior that caused the insolvency in the first place?
…
A brief reflection on this history and present circumstances drives a plain conclusion: the full restoration of private credit will take a long time. It will follow, not precede, the restoration of sound private household finances. There is no way the project of resurrecting the economy by stuffing the banks with cash will work. Effective policy can only work the other way around.

Posted by: b | Mar 19 2009 15:59 utc | 47

Here in northern Virginia, there are quite a few folks sucking at the government teat. In turn, we’re clamped to theirs. I got laid off from my job with a design/build last July and have freelanced since then. The old firm has one foot in the grave, but I’ve been doing okay- mostly because my service radius is 75 miles, and I’ll do damn near anything someone’s willing to pay for. Also, I have one client who keeps adding to the scope of work. It’s just me, as I have no employees, so every new project is another month I get to stay in my house.
Where I actually live is more central VA, and it’s grim. Every day, there’s at least one full page of foreclosures in the paper. I’m in a business group with realtors, mortgage lenders, and title folks. Every week they’ve said “it’s getting better,” but they’re looking more and more like they no longer believe their own bullshit. Shops in the downtown area- all mom and pops- are coming and going at a pretty crazy pace.
Talking to family in New England, though, I get the sense that we have it pretty good here.

Posted by: VA Dirt Guy | Mar 19 2009 16:37 utc | 48

From the Front Range of the Rockies in Colorado Springs: There are more houses on the market than a year ago, prices have dropped in eastern part of town, holding fairly steady in the western part since there’s not much room for expansion on the west side. US military keeps a lot of this town going, and the number of troops at Fort Carson is increasing, so that part of the economy is still going ok. Some big companies are relocating to different cities out of state, some (Intel, Verizon) have already left, so high tech jobs are drying up. Jobs in other sectors are more rare. There are less small businesses, retail stores, and Mom and Pop operations. My job is being relocated out of state and I have to go with it. I’m have to sell my house, and I’m sure the transaction will be a high stress one. Thankfully, I still have a job, but the base salary has been reduced by 10% over the last 6 months. My wife and I are preparing for a long, tough haul over the next several years.

Posted by: Crandell | Mar 19 2009 16:47 utc | 49

Geithner’s banking plan would prolong the state of denial.
The 800-pound gorilla part of “denial,” denied by Galbraith himself, is the long-term crisis of trade imbalances and the financing of consumer debt in the northern service economies by capital accumulation in the industrializing countries.
Given the usual contradictions, i.e., growing demand in developing countries but rising labor costs as bric move to develop far, far more slowly. Really, really bad news fior the deindustrializing north and global capitalist class accumulation in generaol. Njot gonna happen.
So, implicit in Galbraith’s argument is for chinese workers to finance our consumption. Forever.

Posted by: slothrop | Mar 19 2009 16:48 utc | 50

What are signs of the downturn you see in your area? How have they changed in the last months? Are things getting worse or better?
Good question. I just got back to the States two weeks ago, so my “area” has just changed pretty drastically. I was looking for exactly these kinds of signs and augurs during my transition.
In SoKo, the economic sitch could be felt pretty readily in a general cost of living increase and small businesses were going under with regularity. There was always talk of cutting expenses here or there. It was particularly harsh to the foreigners who had to exchange money on a semi-regular basis. I saw about 30% of my savings disappear into the aether as the won continued to plummet over the last year. (I note with interest that the won has been spiking over the past few days… meaning I’ll lose even more during a return. I console myself with the knowledge that I could not pick and choose the times of my arrivals and departures.)
I was told before I got back to the States to brace myself for how expensive everything has gotten. Maybe I braced myself too much; there was some sticker shock, but nowhere near as much as I had expected. I already knew I’d be paying through the nose for luxury items such as coffee and cigarettes (which I confess that I am ridiculously addicted to), but the cost of necessities doesn’t seem to have changed all that terribly much from what I remember.
I am now back in Ohio for the time being, which has been hit very hard by the loss of business and ensuing unemployment for the past eight years or so. I’ve heard that Michigan (directly to our north) has had it worse (and, indeed, I ran into a disproportionate number of Wolverines while I was abroad… each of them finding work where they could), but it’s hard to qualify suffering.
I’m looking around myself now and wondering what all the fuss is about. Ohio has barely changed an iota from my recollection of when I left it. Things are unnecessarily expensive, sure. They always have been. Real estate developers keep plowing over woodland and farmland to put up ever ritzier strip malls that the local population can’t (and really, really shouldn’t) support… rather than refurbishing some of the failed strip malls which have now become eyesores as well as an economic drain on the surrounding communities. There doesn’t seem to be a lot of small “Mom and Pop” businesses failing because, gun to my head, I can’t think of a single small “Mom and Pop” business in my immediate area. Everything is a franchise of a mega-corp… and their parent companies will get by through stormy seas just fine. Dammit.

Posted by: Monolycus | Mar 19 2009 16:49 utc | 51

Port of Long Beach – Latest Month –
Container Trade in TEUs*

February 2009 TOTAL (T.E.U.) 318,042
February 2008 TOTAL (T.E.U.) 529,699
Change YoY -40.0%

Posted by: b | Mar 19 2009 17:11 utc | 52

I can’t say that there have been any dramatic visible signs of hard times in the part of suburban New York (Long Island) where I live. The number of “for sale” signs on houses does not seem to have changed much in the last several months, though as I mentioned in last October’s thread on this subject, this may to some extent be due to people keeping their houses off the market unless pressured to sell. No visible increase in foreclosures. Retail/commercial vacancies don’t appear to have increased much. Ridership levels on the commuter trains into Manhattan are down slightly, but not dramatically so; the transportation authority’s reported 10% decline seems WAY higher than what my observations would warrant.
All in all, I’d say there are some signs of decline, but they’re not particularly pronounced.

Posted by: Peter | Mar 19 2009 18:46 utc | 53

A big thanks to all for so much information. The effects seem to be locally uneven in the U.S. – no wonder with the housing bubble concentrated in distinct areas. I’d expect that effect to disappear over time and all areas feeling the effect.
Another tale from my local port of Hamburg. A canteen I used to visit when working on projects area shut down today. It was a mom and pop shop and they said the usual customers, truck drivers and harbor workers, were no longer coming so they lost most of their customers.
Restaurants even in plush areas seem to down quite a bit too here. But there is still 0 per cent financing advertised for buying electronic junk and still reports from the stock exchange in the daily news. I expect both to vanish before this is over.

Posted by: b | Mar 19 2009 19:09 utc | 54

today in france over 3 million marched against the economic ‘policies’ . the fury here is palpable – though every attempt is being made to split that movement but from what i observe – it is the masses that are taking a leftward shift – not the left itself which like the democrats has been coopted by the ruling class for some time
in france, reality presents itelf more vigorously than in other countries. the precarity of one’s existence is self evident & i have long thought that the relatively progressive social policies exist because everyone know that they can fall off the edge. this reality is everpresent in the last 12 months
& paranthetically, one of the bread & circus, television is faling clearly in their efforts to take people’s minds elsewhere – on the contrary – it appears to accelerate the fears which are just on the surface
if wilhelm reich was alive today he could teach us a great deal about the death instinct in western culture & how it overwhelms eros
(another not so little thing today – people here often as part of their wage have vouchers for food which can be used at restaurants but also for shopping – there is normally no limit to the number but i notice there is a law to reduce that )
there are also ouccpation of factories taking place here – something that has not really happened since the 60’s & 70’s – there was also a long march of workers from ‘continental’ who marched through towns with similar situations
it is apparent that it is just the beginning

Posted by: remembereringgiap | Mar 19 2009 19:09 utc | 55

another feature which has to do with the local, national & international contexts is that never has injustice been so visible & the complete absence of compassion of the elites also visible – i think that accounts for many people in the demonstrations here who are not yet directly affected
i counsel an article in the latest vanity fair on iceland – it is a dark, dark (tho i imagine the writer presumes humour in the reader)telling of what happened in iceland
iceland is not so isolated – its illussions are thos that have underpinned capital everywhere – about its robustness, its souplesse, its vitality, its transformability – which are in fact bad jokes told badly, very bad jokes

Posted by: remembereringgiap | Mar 19 2009 19:18 utc | 56

b – not the bar where the piano was attached to a winch?!
I’m sorry if so. All those alligators without a home. [I think there was more than one…]
😉
Power to the people, r’giap.

Posted by: beq | Mar 19 2009 19:20 utc | 57

I talked to friends over in Aspen, and they said town had been hit hard by Madoff, lots of folks invested, lost big and are forced to liquidate assets to pay bills. The real estate market in Pitkin, Eagle, and Garfield counties have suffered a massive cut in business and this has hurt all the lampreys feeding upon this industry. The newspapers are suffering from the cuts in advertising; construction workers are out-of-work; and the ski area has taken to hiring foreigners to fill seasonal jobs.
It’s easy for me to forget that I live in a pretty unique place that has always been at the edge of poverty; farmers, ranchers, never-do-wells and average families all living together hand-to-mouth, but ironically close enough to the ski areas to grab a few dollars from their rich visitors who often pass by on their way between resorts. When you’re used to being poor, you don’t notice a downturn as quickly. Also spring is early and farms are going full-tilt to increase production. They’re expecting to do very well this year.
Also in the mountains above town a few wealthy folks have recently bought some huge tracts of land (covering their asses?) and have hired lots of locals to build roads, fence and other improvements.
Over in Aspen, the price of illegal substances is holding steady (according to my deep sources, I’m getting too old…) and this tells me that the economy must still have some legs in the ski towns, despite what has happened to the dirt pimps. When drugs are cheap, the economy is truly in decline…

Posted by: d.13 | Mar 19 2009 20:06 utc | 58

@beq – @57 b – not the bar where the piano was attached to a winch?!
No, that bar is still going. It hs been for about 180 years and I hope it will never shut down. The canteen was inside the harbor, right next to ships loading/unloading.
For non-insiders. Some 12 MoA folks met two years ago at my place and had some fun. The old harbor bar was part of that with its piano attached to a winch because of regular flooding there.
I’d love to hear of MoA barflies meet in Cal. Sorry, I’ll not attend, but it would be fun to know such a meeting takes place.

Posted by: b | Mar 19 2009 20:44 utc | 59


Images here

Posted by: Cloned Poster | Mar 19 2009 21:38 utc | 60

@ 46 – I am European but I live in Australia…

Posted by: vbo | Mar 19 2009 22:37 utc | 61

Those interested in MoA SF Bay Area get-together can contact me at biklett * sbcglobal dot net. Put MoA in the subject line.

Posted by: biklett | Mar 19 2009 22:43 utc | 62

An elderly couple in the store last night, shuffling along with just a shopping bag, stopped in front of the canned fruit, pulled out a can of plums, looked at each other like ‘should this be our last meal on earth?’, then put the can of plums back again.
Lucky the price of food commodities on the international market fell -40%, all those rich buffets and madoffs almost hedge funded commodities into global genocide in ’08.
This is just the quiet calm before the eye of the storm, waiting on balloon backside.
By then, though, the Saudis and Chinese will come out of the gentrification woodwork.
If I were a renter, I would start slowly moving towards the exits, for a fixer-upper.
Real estate, when it locks, will go up so fast those without cash will miss the play.

Posted by: Peter Piper | Mar 19 2009 23:08 utc | 63

Another Northern Virginia report.
A local organization I’ve supported for years that provides groceries and food support to area families and individuals in need reports that they have had about a 25% to 30% increase in business in the last six months or so.
Sales of homes has fallen off dramatically in the past year, but the fewer sales that occur have not been selling for dramatically less than one year ago.
I have a Federal government job so I am fairly job-secure for the time being. My community benefits heavily from the Federal presence too, so we are faring pretty well economically. Last night I went to a local community meeting to discuss the proposed cuts to the local government budget. They want to close a relatively small budget hole in the coming year by cutting local park maintenance and a long-standing (and very inexpensive) outdoor summertime arts program that dozens of my neighbors and I participate in. Yet they are approving an expensive new multi-year transportation project to (eventually) build a streetcar line on a major thoroughfare in an economically depressed part of the county. I am not opposed to such a project when we can afford it, but I want to sustain the great urban/suburban tree canopy and remnant of a natural environment through our parks – that is a higher priority to me than letting them decay to embark on an expensive new infrastructure project that is not essential to start this year.
That is sort of long-winded, but my point is we are not really suffering when these are the trade-offs we are facing.
Anyway, I’ve been working almost day and night for months so have not been out and about to observe how restaurants and local stores are faring. An Ethiopian restaurant opened up not so long ago near a recently closed Circuit City (consumer electronics) store on a long strip mall stretch not far from here and the few times I’ve stopped there for take-out it has seemed to be doing ok. I used to live in DC and there was a large Ethiopian and Somalian expat community there, with tons of little restaurants and shops. I was a little surprised to see such a place thrive here in the suburbs.

Posted by: Maxcrat | Mar 20 2009 1:29 utc | 64

Cloned Poster@60-
Nice piece of photojournalism. The boston globe has been a decent photo paper, good photographers and editors.
Thanks for sharing CP.

Posted by: d.13 | Mar 20 2009 2:29 utc | 65

Houses just don’t sell, so the For Sale signs are getting more and more common. That’s been going on for almost 2 years now.
City has a hiring freeze and the state is announcing massive tax hikes to cover budget shortfalls. But teh thing we all bitch about is that teh city sold off the parking meters to a private company, and they are just now finishing converting all the parking meters so that it costs 4 times as much. Could be good if it drives a few more people to public transit.

Posted by: citizen | Mar 20 2009 10:41 utc | 66

Massive layoffs, here in Taiwan. The government gave out ~US$120 in cash coupons to the entire country a couple of months ago. My brother-in-law works in a container shipping company, and much of their work has dried up; the ports are apparently hard-up, these days.
I rarely leave my neighborhood, though — an education and government area — so beyond that i haven’t noticed nor heard much.

Posted by: china_hand2 | Mar 20 2009 13:47 utc | 67

The number of natural gas drilling rigs have decreased in Colorado by almost 71%; according to the article this is partially due to the crash in the energy sector and partially to new regulation Colorado has forced the rigs to comply with.
There is a lot of bad blood between the gas and oil sector, and the ranchers who blame the rigs for a number of problems; noise, pollution and traffic. Most of the ranchers don’t own mineral rights on their thousands of acres of land, and they don’t like industry stepping-on their fiefdoms.
G/J Sentinel
Here is a link to the High Country News, which at one time was the environmental voice of the west but in recent years the staff seems more interested in writing grants to keep the thing publishing than they are in covering issues, but that’s just my bitter take on them. They have done some good reporting on the friction between ranchers and industry.
And further off thread, but an excellent read, is the Canyon Country Zepher, a kooky publication out of Moab Ut, that is full of environmental rants and good river stories. It used to be worth the drive to Moab just to pick-up a free copy, but now you city folks can read it online. But ya’ still can’t raft the internet 🙂 or bike slick-rock on the internet.

Posted by: d.13 | Mar 20 2009 14:26 utc | 68

Someone mentioned yesterday the closing of big box stores in Colorado. This is the first I’d heard of that except for Circuit City which isn’t really a big box.
I wonder because Walmart bought a small shopping center just up the street a year or so ago, with plans to raze it and build another big box, their third one in this locality, right smack on top of a small local commercial neighborhood. Destroying it in other words. They seem to have begun dragging their feet; I have some hope that the box will never get built.
A wealthy construction guy bought up a large prime tract of farm and woodland, one of the last inside the city, a couple of years ago, planning to convert the entire area to the biggest shopping mall in the area. Funny how some folks just gotta be the biggest. He died.
The project was never going to work anyway, given the impending-at-the-time crash, so now his heirs own a vast piece of property that nobody will buy.

Posted by: rapt | Mar 20 2009 14:43 utc | 69

Rapt-
I might have been the one who used the term “big box store” regarding circuit city, because to me it is 🙂 also closing were the office depot next door. These were both are in Grand Junction, and I added that I felt part of the problem for them was competition from their stores which recently opened closer to the ski areas (glenwood springs; closer to aspen; montrose, closer to teluride.
I’m just a small town mouse, anything with more than five isles is BIG! 🙂

Posted by: d.13 | Mar 20 2009 15:08 utc | 70

I forgot to say that in Australia government is giving money to the people.$950 for each child at school, $900 to one income families, and basically everyone will get something…They are begging us to spend this money but people are in debts and they keep telling us that worse is coming, so I suspect that people will pay their Visa cards and other debts…

Posted by: vbo | Mar 20 2009 15:27 utc | 71

I might have been the one who used the term “big box store” regarding circuit city, because to me it is 🙂 also closing were the office depot next door. These were both are in Grand Junction, and I added that I felt part of the problem for them was competition from their stores which recently opened closer to the ski areas (glenwood springs; closer to aspen; montrose, closer to teluride.
All Circuit City stores have closed. Office Depot has had some financial troubles and has closed something around 10% of its stores.

Posted by: Peter | Mar 20 2009 16:55 utc | 72

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