patrick.net

Even before we cover those topics... what kind of time frame are we talking about?

The frightening part is how fast things can unravel when people start freaking out.

Days.

There are already intermittent reports of credit card not being able to be used across borders, this is very very bad. If we go back to a cash society, and in crisis like this, cash or silver buying your food is a highly likely scenario, the worldwide supply chain will be completely disrupted.

I don't care about the toys or clothes or whatever, but the food industry has been set up in way, due to globalization, that they source their ingredients globally. There will be disruption of production even if they can find local suppliers.

I lived through hoarding once in Hong Kong, I don't even remember what the crisis was, not something important for sure because there was no riot nor violence.

Rice, staple food, everything was gone in a matter of hours (also due to the density of population), even toilet paper rolls were gone. Empty shelves, just like that, only in a matter of hours.

what kind of time frame are we talking about?

The speed of the unraveling scares even me.

Thankfully, most SV engineers will have sufficient rice stocks left over from the Great Costco Rice Run of 2008. Remember, if anyone asks what you are doing, mumble something about an earthquake preparedness kit.
I was getting a Nightfall-like vibe while watching the sunset this evening. :-O

I knew I should have looked away when the Google van drove by. Ya' got me.

Wow. Look at the asian markets. I think the bubble is just about gone. :) Gee whiz.

Whoa. Guys. Calm down.

We might have to think about diversification and protecting our hard earned money but I don't any need to panic.

sriram - diversify in January puts. They're as good as gold right now. I loaded up on C, GS and COF January puts and feel quite comfortable with my portfolio *for now*.

The only thing that worries me is the next bunny they'd pull out of the hat to prop up the markets.

coretexity, whatever the government will make the situation worse. But the control freaks in Washington will never learn.

Look at all they have done in the last year. And he results hey have produced.

The Original Bankster Says:
October 9th, 2008 at 6:22 pm
"are you guys serious? you think were in a state of emergency right now?"

Better safe than sorry man. This thing is unravelling pretty quickly now.

OO, you keep saying gold will rise but ignore how valuable cash is becoming again. I have never figured out your thinking. Now, don't get me wrong, if they start pumping money out like it is going out of style I might agree with you, but everything is deflating. Yes, it spiked over the last couple of days because people are 'scared' but fundamentally it is over priced. The first thing the media does is say, 'people are flocking to gold where they feel safe', sure, but your money is better in a bank or under a mattress.

"Great Costco Rice Run of 2008"

That's me - I got some, never bought rice bags that big before or from Costco before for that matter, but I just couldn't resist after reading about the "shortage" on the blog.

Now all I gotta do is work out what healthy food I should stock up on? Spam anyone?

OK, I just finished my rice run, now I am feeling infinitely better. More canned tuna, happy about that too.

Malcom,

here comes the help:

WASHINGTON -- The U.S. is weighing two dramatic steps to repair ailing financial markets: guaranteeing billions of dollars in bank debt and temporarily insuring all U.S. bank deposits.

If the two moves come to fruition they would mark the government's most extensive intervention yet in the financial system, as officials ponder increasingly far-reaching measures to stem the sprawling crisis.

http://online.wsj.com/article/SB122360336021121827.html

Between having heavily disrupted food distribution in the immediate future and rampant inflation down the road, I would avoid the former at all cost.

I've got 50 lbs. of red beans, 100 lbs. of dried long grain rice, and a big bottle each of olive oil and hot sauce. And speaking of long grains, my first full clip is loaded; everything is freshly checked and recently sighted. I've got a few more folds left, and then my tin foil hat will be ready.

btw, what total retard posted this thread?

I put the odds of a major terror attack within the next few weeks at about 50%.

I would put off panicking until then.

I have my emergency kit. It consists of a fine bottle of Whiskey and a harmonica!

All of this should have happened last year. At least the train wreck is at full speed now. It'll be nice to be able to mop up the wreckage and move on. I can only imagine how this will look in the history books. 7 December, 1941- The Amish bomb Pearl Harbor!!!!!

Cheese Puffs rock! Good idea.

I went to Costso for Armageddon shopping yesterday night. All other carts were at least twice as full as ours. Obviously we are not ready yet. More shopping today!

The DOW is so rigged today.

When it opened, it was literally free fall for 5 minutes straight down blowing through all resistance levels to -8%, I was watching it saying, hey PPT, get up, and voila, there it was, jumping right before I thought we would see -10% today, narrowing the loss to only 2.x% within 2 minutes.

That was one hell of a job by PPT, and of course all the stocks they bought are financials, because you can only see such an excitement on financial stocks, other stocks reumed their slide.

Now the second piece of work done by PPT is on gold. Gold was going up as DOW plunged, then after PPT, gold plunged from $91x to $891, but PPT's job was not so clean on this one. Why? They forgot to short CEF, and CEF is up 2%.

At some point, the paper gold market is going to end in shambles due to all these naked shorts.

At some point, the paper gold market is going to end in shambles due to all these naked shorts.

I heard that physical market is very tight right now and COMEX OI is dropping. GLD is actually seen as almost-physical because it owns physicals.

I do not mind someone hammering gold down so that I can buy more.

Disclosure: I own some GLD.

I wonder if the PPT is going to prop this up all day. There is a vacuum on the bottom of that graph...

Have you guys looked into gold stocks? They are way down. The severe disconnect between XAU and GLD occurred around July-August.

Opportunities there?

Gold/commodity stocks may involve less counterpart risks than futures.

Not investment advice

The market is going down so sharply because there are no short sellers in financials.

They WANTED this to happen.

I predict large donations of surplus canned food to the food banks come Christmas.

Bush is speaking. The words "working closely with" keep coming up. Nothing much concrete so far, mostly a recap of the world as he sees it.

I am not even watching, did he say, "work very hard"?

You meant mostly a recap of the world as his prompter sees it.

I can't believe that they haven't figured out that putting that clown in front of us just lessens our confidence.

OO, lots of platitudes about how good workers we all are. Thank you, Papa Bush. I'm beaming with pride now.

So there is no concrete plan at all about how to loosen up the credit market except for dicking around the stock indices that really do not help any shippers to get their job done or make it possible for smaller companies to secure payroll.

Just great. Then I expect my Thanksgiving and Xmas dinner will be canned tuna.

Buy that turkey now!

Not thanksgiving dinner advice.

OO has a point. A lot of food shipments depend upon credit facilities of one sort or another (letters of credit, for example) to bridge a transaction's cash flow demands. Don't know how prevalent credit disruption is at those companies, however. Currently it doesn't seem to be widespread, only between trading partners who haven't done a lot of business with each other already; my SO works in the retail side of the business, and they don't have supply chain problems at the moment with their suppliers. If the credit availability picture clouds too much for these companies however, then supply chains will definitely get stressed over the next few months (usually these companies can play games with receivables and payables for a cycle or two before they run into hard solvency problems).

I recall when we used to comment that this was the weirdest slow motion train wreck we have ever seen. With the financial contagion through international highly leveraged institutions we are showing we can do things more effeciently in 2008. Bank runs now take seconds. The speed at this point is shocking.

Patrick, please recall that many here asked that the correction be fast and thorough. Well, it is that.
What we will wake up to in a few weeks? I don't know.
I tend to think the US, as a nation rich in food and natural resources, will be okay.
But the bankruptcy of Pakistan. The problem now showing up in India. The stock market failure of Russia. The possible balkanization of Europe. The crushing cost of intervention by those countries mitigating failure. We are kind of looking at rewinding to the geopolitical situation of the 70s.

Patrick, did you pick up a stable gig? As companies downsize they will be keeping on the best talent and I think there will be few dollars for contractors.

A real problem with buying survival food is that food that is good for you is generally perishable, whereas junk food is so full of preservatives that it may last for an eon, e.g. ding-dongs and ho-hos. :(

I just have mostly corned beef, canned corns, and salmon.

I think a 15-day supply should be sufficient, right?

I would like to argue that storing food in premature. But, it always pays to be prudent. However, we are really no where near this.
At this point we need to only pay attention to emplyment numbers. If we start seeing massive job loss, then it is time to lay in supplies.
I am talking numbers like 10% (now at 6.1%).

Log time lurker... first post.

I just wanted to jump in on the food supply issue, since I work of a frozen veggie importer. 99% of our suppliers are outside of the US. I am fairly deep inside the food distribution industry.

At this moment I am seeing zero problems with transportation or distribution. The ports are all open. Trucks are still picking up and delivering open orders. Manufacturing sites are still manufacturing. The foods is still flowing (at least the frozen food is).

The trucks will only stop running when they can no longer put diesel in their tanks. That will happen if enough of the customers can no longer pay them and/or the fuel credit card becomes unusable. So far that has not happened yet.

Most payment terms between trucks and their customers are between 15-30 days, so it is probably a little early to tell if lack of cash/credit is going to cripple transportation. So far all is fine.