Right now it’s just a curiosity. A guy wearing a sandwich-board for a resumé, with the tagline “almost homeless”. Maybe it’s a gimmick. Maybe it’s a little cheesy. Yet maybe it’s a foretaste of things to come.
Yesterday the Dow Jones Industrial Average closed below 8,000. Everyone expected 8,000 to be a hard floor, but a floor nonetheless. You have to go back to October 2002 to find numbers that low. Now people are talking, quite reasonably, about 7,500 being the bottom (August 1988), but more realistic and honest people are talking 5,000 (November 1995) — maybe 4,000 (February 1995). The crazies, who predicted two years ago that we’d punch through 8000 on the way down, are now talking about 3,500 (April 1991) as the likely new floor. Or 2,000 (December 1988 or so). Go down to 1000, and you’re back to November 1972. Any lower than that, and you’re backing into the 1930s, to find a DJIA that low.
General Motors is currently trading at $2.79 a share — lower than it’s been ever, going back to 1968 and the company’s founding. It’s likely to go bankrupt by Christmas, even if they do get a $25 billion bailout from the government. Microsoft (MSFT) is trading at the levels it was in December 2001.
The Federal Reserve’s policy analysts believe that the current ‘shrinkage’ in the US economy will last until the middle of next year. So we’re talking about a million Americans out of work or without retirement funds between now and January, and further downsizing between now and June or July. And that’s based on a generally optimistic forecast.
Do you know where your oatmeal storage is? and your sandwich boards?