2009 Gloom & Doom Update: Protests in Germany and Bosnia

As the situation gets worse in Europe, with unemployment rates reaching new highs, the social unrest (see previous posts) is spreading. Germany is the latest in the string of countries that is seeing protests show up. This is important to note as Germany was one of the first countries that had been working on a stimulus plan and has tried hard to off-set the anticipated problems.

Problems in Bosnia are less surprising as this was not a strong economy to start off with. Given their political precariousness (two regional, uncoordinated governments), this is a country that is possibly in line for a change in administration in the style of Iceland or Latvia.

What to watch out for in the upcoming weeks: collapse of airlines. Several airlines are already facing problems as fewer people are flying (Singapore Air, Lufthansa, Swiss Airlines etc)- let us see when some of the weaker players are pushed out of the market or will need to be bailed out.

2009 Gloom & Doom Update: Suicide Rates on the Rise

One of the side effects of the worsening global economy and unemployment is the increase in suicides and suicide attempts. The numbers of cases (high profile and of “normal people“) being reported has increased significantly.

Asian economies like South Korea, Japan and Hong Kong have all reported increases and are planning for more. South Korea and Japan are installing blockades for railway tracks so people do not jump in front of trains. Hong Kong has increased the numbers of operators for its suicide hotlines.

The US is also experiencing an increase in calls to suicide hotlines in places like New YorkTampa, Dallas, Washington DC metro area and California. What is far more worrying is the increase in suicide attempts at universities like the University of California, Santa Barbara. Europe is not spared either with countries like Serbia reporting the highest suicide rates in Europe and 55% of the population shows signs of depression.

The global economy is going to get worse over the upcoming months. If anyone you know is showing signs of depression make sure they get help.

2009 Gloom & Doom Update: Economy Takes a Bite Out of Your Lunch!

2009 gloom and doom update

Like all other sectors of the economy, the food and beverage sector is also facing a crunch. The cost of food supplies has risen globally, as have costs associated with packaging and distribution. All large and small suppliers, manufacturers and vendors are facing the same issue.

At the end of the day, all costs will be transferred to the customer- the question is simply: how? The supply side faces two simple choices: increase the price or reduce the size?

In the case of restaurants and prepared food vendors, it is often easier to reduce portion size rather than increase prices. From Dubai eateries to Girl scout cookies in the US, all are becoming smaller.

In the case of basic food, global food prices have been SOARING and the news has been littered with stories of global food crisis for months. You name the country and there is a report about it. Here is a sample across the continents: South America, North America, Europe, Africa, Asia, Australia.

This has been an ongoing problem which attracted major attention last year- it’s just that we forgot about it amidst all the recent sobbing over economic woes. It is also a problem that is not going away and will be (along with the financial side) the reason for upcoming political instability in several emerging markets.

People are not interested in moral high ground and democracy mantras when they are starving and burying their children!

2009 Gloom & Doom Update: Overspending and the Global Financial Crisis

There have been lots of articles on what has caused the problem and how it can be solved. An article in the NY Times addresses one part of the cause: over-spending. This excerpt summarizes it brilliantly:

In other words, shopping was part of the problem and now it’s part of the cure. And once we’re cured, economists report, we really need to learn how to save, which suggests that we will need to quit shopping again.

My advice to individuals out there is simple: get rid of your debt before you start to spend on new things. You’re not helping the economy at all if you add to your debt, in fact, you’re making it worse.

The retail sector wants you to spend so that it helps them. That does not mean it helps you!

2009 Gloom & Doom update: a spot of advice for 2009

Disclaimer: This post in not meant to be a downer, just an assessment of the past few years based on indicators that I have been watching since 2003. It was obvious in 2003 that the global financial markets would collapse within 5-10 years. By 2006 it was clear that 2008 was going to be a major eye-opener for everyone (even those not watching indicators). The question now is how low will it go? Will *ALL* the systems come crashing down at once? Or will they follow each other? If all at once, the low will be VERY low. If they follow each other, then the low will not be as bad however the misery will last longer. 

To recap:

2007 was a year of disappointment for many. Financial expectations, business growth and life in general did not work out as planned. The global economy had started to slow but people were mostly not paying attention to the indicators. It was just a few that were starting to face resistance after years of ease. The savvy were pulling out to capitalize on their gains from the previous years. There were a few bankruptcies, several near bankruptcies and some merger attempts.

2008 was a year of transition for many. The market visibly tanked and the global markets were hurt. No one needed indicators any more as we all either faced hardship or knew someone starting to face hardship. Major international conglomerates laid off workers and instated hiring freezes. People who were unemployed were looking and not finding anything. Next years graduates saw a huge decline in interviews and offers. Suicides rates went up.

Moving forward:

2009 will be a year of despair for many.

The upcoming year is going to be hard on many people. The global financial situation is going to get worse before it gets better. SAVE! SAVE! SAVE! Everything you save will be needed later. If you have a miserable job, don’t quit yet. If you do not have a job, grab what you can. It will be worse than many of us remember. None of the indicators are pointing towards anything good.

Expect an escalation in crimes like theft. Expect an increase in riots and protests in various Asian hotspots. Expect growing unrest in Europe. North American social welfare systems will get taxed to their breaking point.

Cracks will emerge that will over the next 5 years result in the changing of some national boundaries.

And thus we continue our journey in life.