Its for damn sure not a Capital One credit card and I can tell you that. Now I have nothing against Cap One but they may be cutting back on their crazy commercials pretty soon. The reason why is because I have been posting for awhile now that our economy is showing signs of the dreaded "R" word recession. Yup, I am proud of myself today as I used the "search" feature on the site to determine when was the first time I began identifying a spiraling trend of distress for the average American and found out that my postings almost bring us back to exactly a year ago!!! Check it out: http://urbanomics.blogspot.com/2007/10/welcome-to-good-life.html
Notice, a year ago I began mentioning the developments of financial institutions currently plummeting or no longer in existence as a public companies.
And for you lazy folks, here is a quick excerpt from OCTOBER 24, 2007:
Let's see, we have major financial companies, Bank of America, Merrill Lynch, Citigroup, and Wachovia Bank all getting hammered by the weakness in the credit markets and the mainly through the bad investments that were made. Add to that the mortgage crisis in the US which has led to homeowners everywhere defaulting on their homes. All the companies in these areas, which were once living the "Good Life" are singing the blues and laying people off. Then there is that pesky thing called energy...it currently sits at levels that are unthinkable. Oil is reaching levels of roughly 90 dollars a barrel and predicted to continue to rise. Now maybe I am too young to really know what I'm talking about but there has been the "R" word thrown out by some analysts and that would be RECESSION and from what I am seeing in the markets I don't think that some of the whispers are too far off.I am no mathematician but poor financial markets + bad consumer debt + rising foreclosures + declining property values + layoffs = something is wrong (possibly RECESSION). I am not comfortable with the volatility in the market because as companies are beating earnings or being upgraded they go up and then immediately the market brings them right back down due to all the negative news.
Now you see why I say if I am able to logically come to this conclusion over roughly a year ago where were the geniuses in the Federal Government who are supposed to put policies in place to navigate us through these difficult times! Good question, but we really want to know where do we go from here and the likely answer is probably down or sideways. I haven't put that much thought into it but logic now tells you that the perfect storm has been created. All forms of creating wealth have been completely taken to the woods and shot and now there is not much left to do but clean up the mess. This is what I mean, some may argue there are three main avenues for wealth creation in the United States: Real Estate, Investments, Entrepreneurship. These three avenues have been taken out in the following order:
Real Estate - The first area to get hit and many felt the pain from real estate brokers to new homeowners. The worst may not be behind us unless something to do something to stabilize foreclosures. This decline in real estate lead to the decline in Investments.
Investments - The crumbling real estate market blazed a path of destruction that has hit the stock market with breathtaking speed. Banks, investment banks, insurance companies and other institutions have been impaired. This is leading to the decline of the American economy and entrepreneurship.
Entrepreneurship - The impact of the real estate market and now the stock market is leading to layoffs and a slowing down of the economy. There are less investments to start businesses and every day workers like you and me are cutting back on our spending. This will now impact businesses and franchisees across the country. The next decline in my mind will be Retailers, Consumer Services, Restaurants, and Travel and Leisure sectors. I say this from experience as I am not eager to travel, cut back on my credit card spending, limited eating out, and even if my clothes don't fit they will have to be good enough for now.
This means that the pain in the stock market, your 401K portfolio is not over. We will now see companies start to feel the effects in these sectors:
Credit Cards - Capital One
Retailers - Saks, Nordstrom
Restaurants - Brinkers International
Travel and Leisure - Hotels, Airlines
Short these sectors as the recession will now enter a downturn.
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