Bailing On Britain

The survey reported below indicates that many Britains are taking serious steps to leave their country because of the economic conditions and political considerations.

A bit overstated perhaps, and talking their book, but certainly a trend worth watching.

We cannot help but wonder if and when a similar emigration will take place in the US. Typically the movement has been within the United States, as in the great movement of people from the center of the country to the coasts in the 1930's.

Have you seriously considered leaving the US within the next four years, seriously enough to actually do some preliminary planning? If so, for what destination?

Online Surveys & Market Research

TheMoveChannel
Mass exodus from UK
Catherine Deshayes
Friday, May 15, 2009

New research has found that a whopping 11 million Brits are thinking of taking a job overseas within the next two years - a significant dent in the population - and a fifth of those would choose a new life down under...

Britain is experiencing the greatest exodus of its own nationals in recent history while immigration is at unprecedented levels, new figures show.

In 2007, 207,000 British citizens - one every three minutes - left the country and currency specialist Foreign Currency Direct has revealed that one in four working Brits are now looking to leave the country for sunnier climes and better job opportunities.

More British live abroad than any other nationality and the levels of emigration are now the same as those seen in the late-1950s when the £10 Poms left for Australia.

An increase in tax levelled at high wage earners coupled with rising UK unemployment is thought to be partly behind the mass exodus.

The research found that men are almost twice as likely as women to opt for a job overseas and moving abroad was most popular with Brits aged between 18 and 30 and also those in the 51 to 60 age bracket, perhaps seeking a better lifestyle for their retirement.

With the number of unemployed in Birmingham higher than in any other major UK city, people living in the Midlands are subsequently the most likely to look for a job overseas - 17 per cent of them compared to just 13 per cent in Wales and the South West.

The majority of people planned to head for a country with a warmer climate, more days of sunshine and those that were English speaking. A fifth of people named Australia as their top choice; one in six selected the USA and one in ten chose New Zealand. Canada was also a popular choice.

Peter S. Ellis, Chief Executive of Foreign Currency Direct, said, "As people struggle to find jobs, it is no wonder that Brits are considering bailing out the UK.

"In the last year, Foreign Currency Direct has seen an 37 per cent increase in the number of clients transferring funds to Australia and the USA as Britons look overseas for a better quality of life."

SP 500 Weekly Charts

Nasdaq 100 Futures at 2:45 PM

“The terrible, cold, cruel part is Wall Street. Rivers of gold flow there from all over the earth, and death comes with it. There, as nowhere else, you feel a total absence of the spirit: herds of men who cannot count past three, herds more who cannot get past six, scorn for pure science and demoniacal respect for the present. And the terrible thing is that the crowd that fills the street believes that the world will always be the same and that it is their duty to keep that huge machine running, day and night, forever." Federico Garcia Lorca

A short term counter trend rally today helped stocks to recover from the recent lows, and continue the intermediate term rally off the lows from earlier this year.

The London office of Goldman Sachs apparently triggered this rally with some upgrades in the banking sector, and a vicious bear raid in the precious metals. The bond also sold off as investors are enticed to buy US equities.

The earnings results of Lowe's were trumpeted heavily by the demimonde of Wall Street, but it is most likely the natural reaction of consumers to seek to improve their infrastructure as they hunker down and cut back on discretionary purchases. It by no means contradicts the overwhelming economic evidence.

Wall Street has a few IPOs it wishes to bring out this week to test the waters for a larger IPO from AIG of one of its units. And of course the banks continue to sell secondary offerings.

If something looks like bait, and smells like bait, it probably has a hook in it somewhere.

The notion of trading in markets against market makers and insiders trading for their own trading profits heavily equipped with zero cost government funds and advantageous information would be almost laughable if it was not such a tragic abuse of productive capitalism and free markets.

Keep that in mind when you trade the short term, or try to interpret the daily actions of the markets. Most short term movements have nothing to do with the fundamentals, and everything to do with the dealers and shills peeking into your hand and running bluffs against the small traders and the funds and institutions.

Most investors have no business trading options or forex or futures at any time.

Everyone's situation is different, but overal this looks like an especially treacherous bear market, made doubly difficult by the actions of the Treasury and the Fed in bankrolling malinvestment, imbalances and corrupted price discovery.

When in doubt, get out. Don't get hooked by greed. And don't step in front of a market operation to run prices up or down. Wait for the longer term trends to assert themselves, and avoid the trap of calling tops and bottoms and attempting to be 'the first' in ahead of a market move.

This rally 'could' have some legs if it becomes a determined effort to reflate the credit bubble supported by the power of the Treasury and the Fed, as we saw in 2003-6, which was a reckless and disgraceful abuse of the Fed's economic responsibilities.

We doubt they can do it again, but never underestimate the power of greed and fear over memory and prudence.

The Worst Is Yet to Come

One of the favorite retail analysts in the Cafe is Howard Davidowitz, and he is probably in the top ten overall. The accomplished shoppers in our crowd (predominantly the ladies for some reason, who have a canny sense of price and demand and store quality, whereas yours truly becomes overwhelmed by a numbing dread upon entering most retail establishments of the non-Home Depot or non-electronics persuasion) all tend to shake their heads in agreement when David speaks to the ups and downs of specific store chains and trends. I can think of no higher recommendation, for these are for the most part the front line consumers and they take their duties seriously.

Last night in speaking with a youngish acquaintance just completing law school (another one, alas) who was looking for advice on long term investments we observed that now is the time to remain liquid because 'the worst is yet to come.'

In 1999 I began an intense study of market bubbles and crashes as mentioned before. This included buying contemporary magazines and newspapers and reading them to see what was going through people's minds.

Today reminds me of the briefly sunny period in 1930-1 when most economists and public officials agreed that the Depression was already over and the economy was back on track. President Hoover dismissed a delegation of businessmen who came to Washington with ideas on stabilizing the economy with "Too late gentlemen, the slump is over."

There are few things from my childhood that I remember more vividly than grandmother's comments regarding this false recovery. "If we knew what was coming, we would have killed ourselves." This from as strong a person as I have ever encountered, with a faith that would break rocks. The Great Depression left an indelible mark, or more accurately scar, on her entire family, and my father's as well.

And I never heard the name "Franklin Roosevelt" from her lips without it being preceded by "God bless" followed by "he saved my family." Not all of her children unfortunately. She said she cried so much and so often that she was never able to cry again. And she did not, even at the end.

Of course it was the second half of the great stock decline after the 1929 Crash that did the most damage, because this is when the carnage moved from financial assets and the banks into the real economy, with unemployment rising to 25% into the trough of the Depression in 1930.

Roosevelt came into office and began spending and innovating with programs to attempt to mitigate the impact of the economic collapse on America's families. Other countries, such as Italy, German and Japan, made their own political choices. We need to bear in mind that America itself came perilously close to a genuine brand fascism, and not the cartoon caricature presidential overreach cited by the corporate elites of the day. Hitler and Mussolini were the solutions proposed by the industrialists, they were their men, and they bankrolled them heavily.

And so here we are. What comes next is anyone's guess. But by now you should be accepting and internalizing the general themes, including the devaluation of the dollar down to levels that are probably still not believable, an activist central government nationalizing key industries, civil unrest and agitation, and a confusing cacophony of hysterical mumbo jumbo coming from media whores and corrupt officials.

The crisis is not over. We have just finished the beginning, the easy part, the initial collapse of the bubble. The worst is yet to come.

Watch the video of this commentary from Howard Davidowitz linked below if you get an opportunity. His delivery is priceless New York style.


"The Worst Is Yet to Come": If You're Not Petrified, You're Not Paying Attention
Aaron Task
May 15, 2009 09:31am EDT

The green shoots story took a bit of hit this week between data on April retail sales, weekly jobless claims and foreclosures. But the whole concept of the economy finding its footing was "preposterous" to begin with, says Howard Davidowitz, chairman of Davidowitz & Associates.

"We're in a complete mess and the consumer is smart enough to know it," says Davidowitz, whose firm does consulting for the retail industry. "If the consumer isn't petrified, he or she is a damn fool."

Davidowitz, who is nothing if not opinionated (and colorful), paints a very grim picture: "The worst is yet to come with consumers and banks," he says. "This country is going into a 10-year decline. Living standards will never be the same."

This outlook is based on the following main points:

With the unemployment rate rising into double digits - and that's not counting the millions of "underemployed" Americans - consumers are hitting the breaks, which is having a huge impact, given consumer spending accounts for about 70% of economic activity.

Rising unemployment and the $8 trillion negative wealth effect of housing mean more Americans will default on not just mortgages but student loans and auto loans and credit card debt.

More consumer loan defaults will hit banks, which are also threatened by what Davidowitz calls a "depression" in commercial real estate, noting the recent bankruptcy of General Growth Properties and distressed sales by Developers Diversified and other REITs.

As for all the hullabaloo about the stress tests, he says they were a sham and part of a "con game to get private money to finance these institutions because [Treasury] can't get more money from Congress. It's the ‘greater fool' theory."

"We're now in Barack Obama's world where money goes into the most inefficient parts of the economy and we're bailing everyone out," says Daviowitz, who opposes bailouts for financials and automakers alike. "The bailout money is in the sewer and gone."

The Worst Is Yet To Come (Video) - Howard Davidowitz